Topic: Biggest Story in the World?...China Faces Hard Landing

[jpatrickham]

Friday, 16 September 2011 04:59 The Daily Bell

 
"China risks hard landing as global woes spread ... China's carefully-managed soft landing is turning harder by the day, threatening to deflate the torrid credit bubble of the past three years. Beijing is alarmed by inflation above 6pc and price-to-income ratios for property in the rich coastal cities ... "There is a large potential risk," said Zhu Min, the deputy managing director of the International Monetary Fund and a former Chinese official. Mr Zhu said China had doubled the loan ratio from below 100pc of GDP before the Lehman crisis to roughly 200pc today. The danger is that this excess could start to unwind just as the West goes into a sharp downturn, and possibly a double-dip recession. China and emerging Asia are fundamentally in weaker shape this time, having used up their "fiscal cushions", leaving them with little leeway to cope with a fresh global shock."

– UK Telegraph

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"Dominant Social Theme: Europe has a lot of troubles. But, hey, China's always delivered before. Perhaps it can still fix the world once it fixes itself."

"Free-Market Analysis: Good on you, Ambrose Evans-Pritchard. There is really no other story that matters, is there? If China goes down, the economic system of the past 60 years may be finished. Collapsed. Kaput. That's because every other major economy in the world is troubled to a degree. China has been pulling the whole boatload. But what if China's magnificent industrial engine begins to sputter and lose traction?

If America is in a recovery, as the Obama administration claims, it's a funny one. We tend to think the American economy more or less resembles a depression. Europe's, too. In fact, Italian political and financial leaders just asked China to buy the country's bonds (fund its deficit). Chinese leaders already own trillions in American securities (that they are about to sell) because China has been acting as the buyer of last resort for the entire world.

This is a really big story. Everybody should be reporting on it! It is more important than the concerted surge of central banking liquidity now announced for Europe, the loss of US$2 billion by a "rogue" UBS trader, or even the determination of the Obama administration to reduce or eliminate french fries on fast-food menus.

Evans-Pritchard is reporting not that China is "risking" a hard landing (as the title of the article suggests) but that China is IN the MIDST of a hard-landing. Here is the "money quote" from Diania Choyleva of Lombard Street Research:"

http://www.rightsidenews.com/2011091614513/us/politics-and-economics/biggest-story-in-the-world-china-faces-hard-landing.html?

[Libertas]

This is when the IOU's get called in...

[jpatrickham]

This is when the IOU's get called in...

I just pray, that is all that is called in! Japan in the 30's?

[Libertas]

This is when the IOU's get called in...

I just pray, that is all that is called in! Japan in the 30's?

  War in the 10's!   

[Sectionhand]

This is when the IOU's get called in...

I was thinking the very same thing , Libertas . What happens when Big Wang calls in his markers and gets a bundle of rubber checks for his trouble ?

[Sectionhand]

This is when the IOU's get called in...

I was thinking the very same thing , Libertas . What happens when Big Wang calls in his markers and gets a bundle of rubber checks for his trouble ?

When this happens the Japanese Stock Market will close for the observance of  " Rape of Nanking Day " .

[warpmine]

So what? The currencies of the world are base loosly on what, dogsh*t? It's not as though the Chicoms have actually given real currency, gold, silver or some other asset that has tangible value, it's just a promise on paper that means literally nothing. It's going to be a serious problem when they have to sort it all out. Fiat currency is worth what others contemplate it's worth but only based on faith. The Chinese are going to find out the hard way, it's worth squat as is theirs.

[Libertas]

This is when the IOU's get called in...

I was thinking the very same thing , Libertas . What happens when Big Wang calls in his markers and gets a bundle of rubber checks for his trouble ?

When this happens the Japanese Stock Market will close for the observance of  " Rape of Nanking Day " .

 

Hey Wang, here's some worthless chits for ya!  Now bend over and say thank you!

 

If they get pissy...