This could be a good thing overall for China as the “alternative sources,” trusts, what is often called the “shadow banking system,” might actually be a stabilizing and limiting force in the economy. The rates of interest on loans through the shadow banking system are much higher than what municipalities can obtain through traditional lenders, and probably more accurately reflect the real risk of loans. (Which are considerable it appears.)
To paraphrase the anchor, – If a nuclear reactor melts down in your neighborhood and the government says “don’t worry about it” get the heck out of there as fast as you can.
… With the US on the same path but a bit behind.
You’ll remember that he was going to make the Fed more “transparent.”
Well I can’t believe it. You mean the economic data from the world’s Ultimate Crony Capitalist State is intentionally incorrect? You mean China’s entire economy might be overstated by 10-12%? (Doesn’t that put Japan back into the number 2 slot?) You mean those ghost city stories are for real? That the red dragon, though not toothless is lacking much of the fire we thought it had? I am shocked.
Right now, secret negotiations which will profoundly affect what the 21st century global economy will look like are happening. You are not invited to weigh in. The power players of the world are busy negotiating the game for their benefit, and they are calling it “free trade.” It is not.
A very well done video on the Japanese debt crisis. Anyone who cares about the world economy should have some understanding of what is going on currently in the world’s 3rd largest economy.
Kyle Bass is a smart guy and he’s been watching Japan closely and for a long time. The Hail Mary pass the Bank of Japan just tossed up has bounced in the end zone. Bass says it’s close to game over.
Print for inflation Abe said. No problem Abe said.
There is a chill moving through markets right now. The great central bank experiment of the last 5 years (the acute version) is misfiring again. As they say—you can’t get something for nothing, and the experiment which has failed the lower and middle classes of the Western world is now failing the monied classes. At least at this moment and in Japan. The markets which were feeling pretty good about themselves (for the most part, though Japan has had significant volatility recently) aren’t feeling so good.
The world is coming to terms with the possible end of QE, and like a heroin addict whose methadone prescription may soon run out, markets are getting very nervous.