Is China on the verge of an Economic Collapse ?!

For long time investors have fretted that China appears on the verge of a "Lehman moment", where wholesale interbank liquidity and overnight funding markets suddenly lock up. The reason for this, is that China’s short-term lending market for banks and other financial institutions has for years operated under the assumption that Beijing wouldn’t allow big losses in the event of defaults or insolvencies. hence the reason why Baoshang's failure was a shock. That confidence has been shaken by regulators’ unusual public takeover of the troubled Chinese bank near Mongolia last month. and the even more stunning public admission by the central bank that "not all of Baoshang Bank’s liabilities would necessarily be guaranteed." Japan, UK, US, Euro-zone and now China. China was growing by adding more and more debt, but they can’t do that anymore , as they have seen their Minsky Moment coming. Everyone made the same mistake as they used the same economics. There were fatal flaws in the economics of globalization. The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realized the problems that were building up in the economy as they used an economics that doesn’t look at private debt, neoclassical economics. What’s wrong with neoclassical economics? The belief in the markets gets everyone thinking you are creating real wealth by inflating asset prices. Bank credit pours into inflating asset prices rather than creating real wealth (as measured by GDP) and no one is looking at the debt building up . 1929 and 2008 look so similar because they are; it’s the same economics and thinking. The debt fueled booms only last for so long and are always just borrowing money from the future to spend today. You spend the bank loan today and pay it back in the future. Jam today, penury tomorrow. Policymakers like Ben Bernanke thought banks were financial intermediaries, but they aren’t. It is like spending your own money from the future . China, for all it's supposed wealth, sits in fewer hands than the US. they don't have the robust middle class America does. and cannot sustain an internal loop of supply and demand. They have so many people, they have to allocate. via central planning, the masses, getting slave wages, social credits and a rice allotment. The Chinese adopted at the same time the two worst ideas the West had to offer . capitalism and communism. Can't get any stupider than that. next they'll discover that most of the collateral for business loans doesn't exist, at which point it'll crash faster than tower 7 . Today’s China built on a pile of snow balls.... it will fold over and melt just like a pile of snow balls too... China is a house of cards built on a fault line of lies and corruption. Chickens do come home to roost! In trying to beat us in everything, China has become as messed up in everything as the great USA.... Eventually every bubble will find it's pin . It doesn't really matter which domino falls first , It could be China, Deutsche Bank etc..... because everything is interlinked like a huge spiderweb , with 1.5 Quadrillion of derivatives hedging the bubble worldwide , and trillions of negative yielding debt. When LIBOR ends soon, all the world's derivatives have to be settled. Good Luck with that.... You better start watching Gold and Silver markets. And Accumulate as much physical silver as you can... while you can... the market is so small, 1 or 2 days of hoarding will wipe out large amounts. Thank You .....












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