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"Off The Charts" How China Fooled The World

Tyler Durden's picture




 

China is now the second largest economy in the world and for the last 30 years China's economy has been growing at an astonishing rate, wowing the world, as spending and investment has been undertaken on a scale never seen before in human history - 30 new airports, 26,000 miles of motorways and a new skyscraper every five days have been built in China in the last five years. But as we (and Michael Pettis, George Soros, and Jim Chanos - among many others) have warned, it is all eerily reminiscent of what happened in the West... the vast majority of it has been built on credit. This has now left the Chinese economy with huge debts and questions over whether much of the money can ever be paid back (spoiler alert: it can't and it won't).

The BBC's Robert Peston travels to China to investigate how this mighty economic giant could actually be in serious trouble.

As Michael Pettis, Jim Chanos, Zero Hedge (numerous times), and now George Soros have explained. Simply put -

"There is an unresolved self-contradiction in China’s current policies: restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years."

The "eerie resemblances" - as Soros previously noted - to the US in 2008 have profound consequences for China and the world - nowhere is that more dangerously exposed (just as in the US) than in the Chinese shadow banking sector as explained above.

 

Tired of reading about it? Then spend 2 minutes of your life with the following uncomfortable truth clips...

The past 5 years in China...

 

And here is Fitch's Charlene Chu (in a little over 60 seconds) laying out the ugly facts that are China's credit bubble...

 

Of course, the situation has become critical now as reform-imposed credit-crunch is rapidly spreading up the food chain proving that China has no painless way out and can only stoke the fire more in their already-burning house - as we noted here...

 

January's data was simply the final exclamation mark in a decade-long series in which China's prosperity has been simply the result of an exponentially increasing amount of loan and liquidity creation by the Chinese semi-national and government backstopped financial system.

...

Here's the problem: one can't put the January lending surge aside, as it came at a time when for the second time in six months the PBOC tried to taper, only to be forced to not only bail out its money markets, but is on the verge of a bankruptcy tsunami involving its shadow banking products, the first of which it also bailed out despite repeated warnings this time it means business and would let it die.

In this context, the January number is precisely what it appears: the bank's logical response to a liquidity crunch as the Chinese regime finds itself in the same spot that the Fed has been in for the past 5 years - it must keep the monetary spice flowing, or else the party is over. And just like the Fed, and now the BOJ, so too does China not want to deal with the fall out if all it takes to created yet another quarter of increasingly subpar economic growth is another record of funny money conceived out of thin air.

The only problem is that it is becoming increasingly difficult to hide all the pieces of funny money, most of which result in bad and otherwise impaired loans, under the rug. And just to show the problem in its context, here is how China's banks created some 50% more in bank loans in January than the QE credit money created by both the Fed and the BOJ combined.

 

And finally, here is China's nearly half a trillion in total liquidity added to the system in just one month (some deleveraging, right?) looks compared to the Fed and the BOJ's much maligned and unprecedented unconventional monetary policy.

 

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Sun, 02/16/2014 - 21:10 | 4443489 Payne
Payne's picture

You default on the debt and you defend your gold with all the local gangsters you can afford to payroll.  

Sun, 02/16/2014 - 21:22 | 4443513 mccvilb
mccvilb's picture

Except the Chinese actually have something tangible to show on the other side of the ledger to offset their debt.

Sun, 02/16/2014 - 22:38 | 4443799 new game
new game's picture

fucking stupidist comment yet-so the gov gives their gold to the shadow bankers to make them whole-fucken-eh...

Sun, 02/16/2014 - 21:19 | 4443516 LetThemEatRand
LetThemEatRand's picture

I see some merit to the theory that China is a big part of the PM slamdown, using printed money to short the shit out of paper gold/silver while they accumulate physical.

Sun, 02/16/2014 - 21:44 | 4443600 disabledvet
disabledvet's picture

verrrry cwevver.
"and has the added value of being true."
if Goldman Sachs plays both sides of trade...China would be a fool not to return the favor. Still...once the whole thing heads south they have the problem of "non cash flow accruing asset" with no more ability to get their "third lien, yuan denominated, securitized debt wipe out loan."

You can explode the monetary base...as I think many in China are expecting. We'll never know until it actually happens though.

http://www.youtube.com/watch?v=g42Xg-mAkGg

Sun, 02/16/2014 - 22:00 | 4443655 mccvilb
mccvilb's picture

Right. Urbanization is only viable as long as there are productive industries built in tandem supporting their cities' raison de etre. It's not too late to save this. Apparently in phase two they're planning to convert all of the citizenry into bankers, hedge fund traders and television game show hosts.

Sun, 02/16/2014 - 22:12 | 4443683 deflator
deflator's picture

 I saw the Talking Heads lead off for April Wine at a concert many years ago and everybody was booing and throwing beers at them. By the third song, the Talking Heads got pissed, destroyed all their instruments and walked off the stage.

Sun, 02/16/2014 - 21:23 | 4443526 Money Squid
Money Squid's picture

"How China Foored The World"

Sun, 02/16/2014 - 21:44 | 4443569 Johnny Cocknballs
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This has now left the Chinese economy with huge debts and questions over whether much of the money can ever be paid back

Right, and still a shit ton of treasuries which they can and will begin to dump.  But more to the point, the US' growth is all a combination of exporting inflation, the petrodollar, and massive debt - it isn't "real" or sustainable either.  And the rest of the world's growth is debt-based.

Quite naturally, that puts them in the position of either doing the same, or in essence financing the costs of everyone else's debt.

They would be foolish not to play the same game and build infrastructure etc. on loan while they can.  They have a ton of dollars, more and more gold - and the yuan is undervalued while the dollar is propped up by its RCS, which is being eroded every day.

China has lots of manufacturing, and, oh yeah trade surpluses - the US does not.  China faces serious problems, but they are not short term thinkers, and they are in much better shape than the US or the EU.

Sun, 02/16/2014 - 22:31 | 4443772 satoshi411
satoshi411's picture

One man speaks the truth and total silence.

*

This speaks much about the other article today, about the USA havin the worst PRESS.

ZH could easily fill us with "USA is shit" Articles but that wouldn't please the advertisters, who run the USA model of 'NEWS'.

Thus we get these BULLSHIT story's about CHINA,... dying...

But the truth is the USA is already dead, and nobody has even called th under-taker, now people just live amongst decaying flesh, watching the smart bail and/or run away from the coming HELL aka CIVIL-WAR.

 

Sun, 02/16/2014 - 23:26 | 4443973 FredFlintstone
FredFlintstone's picture

Why are rich Chinese buying property in California and Vancouver and why is there an increase in other types of industrial investment here by the Chinese?

Sun, 02/16/2014 - 23:34 | 4444008 satoshi411
satoshi411's picture

Every where RICH are fleeing, cuz RICH know about the coming RESET

*

Rich in USA have fled, and money go to Sinapore,.. Swiss.

Rich in CHINA since 1990's go to BC/USA and pay land with CASH, cuz they can.

*

Everywhere on earth Same-Same, rich MUST hide wealth from gubmint. In coming RESET gubmint have no choice but to rob rich, poor have nothing.

Sorry FRED, but the RICH in USA and CHINA, and INDIA, .. did this back in the 1980's, most real wealth in USA fled in 1980's, most real wealth in ASIA fled prior to HK takeover (2000).

It's just that when western money comes to ASIA, not easy to buy land,

In the USA its like the only place on earth that sells its first born son's crown jewels to foreigners, ... but then WHY would AIPAC care that it sold off america? Hairlip steal america from INJUN, AIPAC steal land from hairlip and sell to asian...

USA man, mostly buys ITALIAN chateau and keeps money in Carribean banks... Switzerland has lots of rich USA folks who like city living, ...

I prefer living in jungle, ... to each his own,

*

The deal is if you have anything, you "keep it safe, Keep it secret".

 

Sun, 02/16/2014 - 23:33 | 4444004 fockewulf190
fockewulf190's picture

How come so many rich Chinese nationals are moving to the US?

Mon, 02/17/2014 - 00:41 | 4444166 Jam Akin
Jam Akin's picture

Answer:  Because the life expectancy of a Chinese billionaire is extremely short.   http://www.forbes.com/sites/raykwong/2011/07/25/friends-dont-let-friends...

One observation: in my world Chinese are going crazy buying imported goods at the moment.  I think they are expecting the RMB to "go all 1997 and shit" fairly soon on the basis of massive liquidity injections, perhaps due to a coming time of trouble.

Sun, 02/16/2014 - 21:37 | 4443570 fijisailor
fijisailor's picture

A new screen door made in China.  La puerta bagina

http://www.youtube.com/watch?v=g9RYtQ2XA9k&feature=youtu.be

Sun, 02/16/2014 - 21:41 | 4443588 optimator
optimator's picture

They've stopped building sky scrapers and are now building more aircraft carriers.

Sun, 02/16/2014 - 22:08 | 4443685 fijisailor
fijisailor's picture

One every five days?

Sun, 02/16/2014 - 21:57 | 4443650 alfred b.
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     "Pageing Yellen"....red phone ringing!

 

Sun, 02/16/2014 - 22:08 | 4443689 LongMarch
LongMarch's picture

This article is flawed. In China, the government controls the banks, not the other way round. This means they will reform and reset and nationalise the  vital organs of corrupt bankers;whereas, in the "advanced" and "enlightened" West they will...

Sun, 02/16/2014 - 22:35 | 4443794 satoshi411
satoshi411's picture

Yep,

Just spent the last 2 weeks in Guang-Zhou, where I live in south YUNAN, we don't talk about this shit, its fucking boring, up near HONG-KONG, everybody loves 'money'.

I had this conversation with ton's of Chinese Momma's,

"What you happen here if banks robbed you, ... like they do in USA?"

of course the answer is 100% "We kill them and them get OUR money back from their familys".

No government  involved, and yes this is WHY goldman-sachs got run out of CHINA, cuz their way of running biz, to rob customers would have gotten them killed, but in the west its ALL GOOD, to FUCK the little people.

In the west the GOVERNMENTS ONLY JOB is to protet the RICH.

In CHINA the governments JOB is to protect the WEAK from the STRONG.

*

Some here may HATE what I say, but I'm just calling them as I see them. Having lived in both worlds, I know what is real.

Mon, 02/17/2014 - 02:18 | 4444303 KickIce
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I don't think this ends well for anybody.  The US has the advanage in military and food production while China has the gold.  I do think it would be foolish to underestimate how far these sociopaths (both countries) will go in their unquenchable thirst for power.

Mon, 02/17/2014 - 04:00 | 4444405 satoshi411
satoshi411's picture

You don't get it, AIPAC fucked the USA to death, and then went to CHINA, where they said "WE DONT WANT ANY", now AIPAC returns to the USA to fuck the corpse.

CHINA is sitting fine,... if they're smart they'll align with RUSSIA, and just sit back and watch the USA/UK descend into uncivil-war, without firing a shot.

Asia will blossom for the next few generations and USA/UK descend into HELL, its called 'chickens coming home to roost'.

USA politicians sold their citizens out to AIPAC , now all USA citizens are palestinians, ... in time everybody will fuck each other to death.

All Asia has to do is stay out of the way and let shit happen.

Mon, 02/17/2014 - 09:19 | 4444644 KickIce
KickIce's picture

We're obviously going to differ on this issue so I'll just add this food for thought; there's no way in hell that the House of Rothschild gives up that much gold unless they have a plan to get it back.

Mon, 02/17/2014 - 10:46 | 4444760 RaceToTheBottom
RaceToTheBottom's picture

Why will China act any different that the West re Gold? 

  • Is their debt different debt?
  • Is their Financial sector different?
  • Is their need for debt servicing any different?

 

Sun, 02/16/2014 - 22:15 | 4443710 Elliptico
Elliptico's picture

So what if the debt is not repaid. The central bank swallows the losses and the economy grows. Fuck the bankers.

Sun, 02/16/2014 - 22:18 | 4443716 Leraconteur
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Chinese banks did this in 1999. The CCP forced them to offshore and SIV the bad loans into perpetual bad banks.

The reason it works for the Chinese is that the Chinese do what they are told and they are completely financially ignorant. They don't think something can ever drop in price, used autos routinely sell for 80% of new regardless of how old, and they have thousands of years of routine of dealing with .Gov that acts as a parent to protect them from reality.

These loans will be shoved into a bad bank and left to rot forever, and the Chinese will then dutifully go out and ramp up the debt again - just as they will be told to do.

If outside investors lost money, this would matter. If the interest rate was not top-down controlled by force, this would matter. If the Chinese did not think they were different than everyone else, this would matter.

Sun, 02/16/2014 - 22:47 | 4443776 LongMarch
LongMarch's picture

That is true, yet the time between resets is getting shorter. Not a good sign.

Mon, 02/17/2014 - 10:54 | 4444778 RaceToTheBottom
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Interesting, So you are saying that the down side of having the bad bank is minimized because of the fact that the owner of the debt is only China and they can leave it there and eventually it dies.  I believe that was Ben's goal as well with Freddy and Fanny.

Sun, 02/16/2014 - 22:23 | 4443744 elixer8
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From my understanding the West borrows its money at interest from private financiers while China creates its own national money supply at zero interest to itself and this is why it has been smart enough not to float its currency - it can’t be screwed by the traders. Surely then China can simply cancel the debt to itself with the stroke of a pen? The West then has big problems while China has empowered itself. Non?

 

Mon, 02/17/2014 - 07:19 | 4444514 hootowl
hootowl's picture

What is to stop the Western nations from simply repudiating the debts created by the criminal banksters?  Then executing all the banksters so they cannot poison the economic well again.

....Then start over again with the social/cultural/physical/manufacturing assets it possesses......with NO Debt, tariffs to unburden the population with income and myriad other taxes.

What could make more sense than for governments to print/coin their own money, WITHOUT the criminal fractional-reserve, debt-money bankster fraud.  Nations must outlaw such evil concepts in the future and punish any nascent practioners thereof severely.

Sun, 02/16/2014 - 22:23 | 4443746 new game
new game's picture

i ask why would gold be the underwritten asset for a failed currency/debt system? what faith would there be?

Is the world ready for that faith shift? And that pesky petro dollar backed by extreme power? above comment ignore how most people are programed and money is exchanged a trillion time a day.  just askin????

Calling hollywood; we have some scriptwriters on ZH ready willing and able..

Sun, 02/16/2014 - 22:38 | 4443797 deflator
deflator's picture

 A lot of the world has no ,"faith" in reference to "money" per se. You do remember what happened in 2008 when markets crashed and many "investors" lost most of rheir investments? When markets crash, they crash quickly. A 30% loss takes a 43% gain to break even. A 50% drop takes a 100% gain to break even. My point is that confidence is fickle and the masters of fiat(the fed) knows this that is why a rising stocks market is on their agenda since 2008.

 

Sun, 02/16/2014 - 22:47 | 4443827 new game
new game's picture

yea I remember; i was glued to my screen and watched citi go to .99/share.  the banks froze(lack of trust thingy) but i still went and bought gas and food with dollar bills. What will happen in China? That is the question? Gold to the rescue?  People will go about their shit and live their lives.  Some bankers will jump.  They will orchestrate a ring fenced failure and control the lose so as to NOT loose the faith.  Just like what should have been done here.  Main difference is banks run amerika, but not in china.  Ask Hank if you don't believe me...

Sun, 02/16/2014 - 23:17 | 4443939 deflator
deflator's picture

 Interconnectedness of markets is the probrem. I think the real problem is that China has come on the global scene in a big way in the past 15 years. Chinese and emerging markets demand has outstripped the past 150 years of anomolous lower left to upper right on the charts growth in things. Many people in developed countries where the majority of paper wealth confidence resides are not aware that the past 150 years of anomolous in contrast to the rest of human histories lower left to upper right on the chart growth is over. It will be a surprise to learn that wealh cannot be created out of thin air and that investors will not always lord over laborers.

 Extrapolating the past 150 years lower left to upper right on the chart growth in real things is no longer possible due to the fact that we are at an inflection point in exponential growth. The numbers are too large to extrapolate further an ascending line on the chart.  Debt based economic models work very well on the upslope of continuously creating more things to monetize with paper. Once there is an inevitable peak in the largest number of things that can be distributed on a daily basis then that is the beginning of the end for debt based economic models.

The only thing supporting our current debt based economic model is the confidence gained from past 150 years of persistent economic growth and confidence that that growth will continue to be extrapolated into the future.

Sun, 02/16/2014 - 23:23 | 4443964 new game
new game's picture

some worker bee somewhere has to buy all this shit. demand...

deflation is only outcome eventually...

Sun, 02/16/2014 - 23:42 | 4444032 deflator
deflator's picture

 There is a lot of little demand spread out over a lot of worker bees in China.

Sun, 02/16/2014 - 23:52 | 4444060 new game
new game's picture

true, but i'm thinking global marginal demand and they are ramped for growth that is wanning.

like my builder said "i gotta keep barrowing moar to stay in the game". he sold for 30 million in 05, stayed on for five moar years at 500,000/ year and collected 250,000/ month from cash flow for 60 months.

fucking smartest move i've ever seen in my life...

went on to invest in apartment buildings with a group of wealthy fucks and made bucko moar, selling then off eventually.

real estate has made moar millionaires than anything else in the world...

Sun, 02/16/2014 - 22:24 | 4443750 deflator
deflator's picture

 U.S. debt expenses on healthcare alone would dwarf those misleading graphs in this article. Soros, Chanos, et al are barking up the wrong tree here. What is there to gain by shorting China? The paper gains at payoff time will be just that, so much paper.

Sun, 02/16/2014 - 22:40 | 4443796 ShoeShineBoy
ShoeShineBoy's picture

c'mon ZH, make your mind. On one hand, you keep saying all the Western world is doomed with un-payable sums of debt (which I totally agree) and on the other hand you try to pick brownie points by highlighting the Chinese credit boom. I totally disagree. What makes you think that Chinese or any other EM is sheer stupid, in that sense? They are not fools, they see the current monetarysystem (reserve currency, anyone?) is destined towards the toilet hole and they simply take advantage of it by leaning onto credit, meanwhile building some bridge-to-no-where infrastructure. I take it anytime over shitty Western cities, NYC anyone? London? all my arse, piece of crap infrastructures, all in need of trillions of $$$ infrastructure with their old and fast aging, rat laden what have you... And dont forget, it is that very same China who has been providing the floor to that very much loved, time tested, real unit of account, medium of exchange and store of value all along. 

 

If I am to wager on who should go under first, well, you guessed it right.. not China, for sure.

Sun, 02/16/2014 - 22:44 | 4443821 deflator
deflator's picture

 The biggest bull run in stocks occurred when President Bill Clinton lifted sanctions and allowed trade status to China and set the stage for that giant sucking sound Ross Perot warned about just prior to President Clintons election. The second and maybe last bull run in stocks for awhile has occurred under the Presidency of Barack Hussein Obama.

Sun, 02/16/2014 - 22:49 | 4443845 AdvancingTime
AdvancingTime's picture

Fast growth tends to mask flaws and weakness within a system, and China has been growing like a weed for years. To make things worse many of the investment decisions were driven by politics. This has created massive overcapacity. Money has been poorly allocated and often shoveled into deep holes like ghost cities and bridges to nowhere.

The 6.6 trillion dollar spending spree used as stimulus to combat global economic slowdown after 2008 is coming back to haunt China. This has greatly expanded credit and created huge overcapacity during the past five years. A massive debt crisis now looms in the offing as companies struggle to repay loans taken to build factories that sit idle due to weak demand. More in the post below,

http://brucewilds.blogspot.com/2013/11/china-land-of-overcapacity-and-de...

Sun, 02/16/2014 - 23:36 | 4444014 algorerhythm
algorerhythm's picture

Ghost cities are actually overstated. It's part of Western propaganda.

Sun, 02/16/2014 - 23:36 | 4444015 algorerhythm
algorerhythm's picture

Ghost cities are actually overstated. It's part of Western propaganda.

Sun, 02/16/2014 - 22:52 | 4443853 new game
new game's picture

that sucking sound will become the great whooosh as in defaltion. remeber what happened to oil peak to bottom-147 to 43 in fast order. deflation is what they fight and when they loose control deflation wins...

Sun, 02/16/2014 - 22:53 | 4443854 new game
new game's picture

that sucking sound will become the great whooosh as in defaltion. remember what happened to oil peak to bottom-147 to 43 in fast order. deflation is what they fight and when they loose control deflation wins...(ask abe if you don't believe me)

Sun, 02/16/2014 - 23:11 | 4443923 americhinaman
americhinaman's picture

roughly speaking what happens when a trust product is issued is that a rich person funds a risky business venture.  that means there is a temporary transfer of wealth from a few rich people to a group of entrepreneurs plus an army of middle-class employees.  what happens if the trust defaults?  the entrepreneurs and employees keep what they got, and the rich people don't get an investment return.  there becomes a permanent transfer of wealth from rich to poor... not exactly the worst thing that could happen (as opposed to say US/Europe/Japan policies which induce wealth to flow in the the opposite direction).  when there is a trust default, the wealth doesn't disappear... it has already been disbursed to others.

recent trust product defaults have highlighted roughly what would happen when borrowers in china default... a handful of rich chinese won't get paid 20%/yr interest on their trust deposits, and instead either get 3%/yr or (gasp) lose their principle.  there will be some media hoopla about the companies defaulting, some rich people lobbying the govt to bail them out... but at the end of the day we're talking about a very small portion of wealth of some very rich people that is at risk.

poor and middle-class chinese don't invest in trusts; they earn salaries that are funded by trusts, and they use that to buy real assets (primarily gold and real estate).  chinese banks have very limited exposure to trust investments (trust companies bear all liability/exposure).  so what will happen if chinese debtors start defaulting?  some rich people will lose a few % of their net wealth.  who cares?

Sun, 02/16/2014 - 23:20 | 4443954 new game
new game's picture

i think the underlying business employing millions and millions built on the this ponzi scheme of debt is the real issue. the demand wanes and the whole mess starts to come unglued. then as i mention above the gov steps in and controls the damage.

is gm the template? time will tell how this great misallocation of capitol is delt with. carmel coated popcorn please...

Sun, 02/16/2014 - 23:34 | 4444009 Handful of Dust
Handful of Dust's picture

Burrish!

Sun, 02/16/2014 - 23:42 | 4444035 mjk0259
mjk0259's picture

Chinese buy more cars then americans and for cash usually.

Chinese govt owns all the land and resources under it.

China has more stem grads then US.

Whatever others invent, they have a million hackers stealing it.

 

Sun, 02/16/2014 - 23:52 | 4444064 BidnessMan
BidnessMan's picture

But when the bubble pops, China will still have brand new roads, dams, power stations, high speed train lines, airports, apartment buildings, single family houses, reservoirs, and factories.  Maybe these assets will change owners, but they will not disappear. The business owners get wiped out, but the political class will be ready, willing and able to redistribute ownership of the assets.  

The biggest threat to Communist Party control will get wiped out in the big reset.

Mon, 02/17/2014 - 04:40 | 4444441 satoshi411
satoshi411's picture

I still say the CHINESE paradigm is fail-safe,

Come RESET what does USA have?

Have we seen a nickel spent on infrastructure in USA post 1980's? NADA

Over 60% of USA citizens are on DOLE ( cops, judges, welfare ho's )

In China its single digits on gubmint DOLE,

 

No fucking comparison on which PONZI will implode first.

Mon, 02/17/2014 - 00:04 | 4444084 laomei
laomei's picture

Pettis - pathetic hack incapable of realizing that China is not the US

Chanos - another useless hack

Soros - better than average, but in the end just another neoliberal hack who loves to laud india as if corpse and shit filled rivers and epic corruption in no way exist.  His ideas only work in the set box of constraints that he is familiar with.  Anything outside of that, he just does not understand.

I really don't know why anyone still pays them any attention at all, as they are wrong over and over and over again.  If I was as bad at my job as they are, I would be begging for a burger flipping job.

 

As far as the BBC goes, they have a long established track record of lying their asses off and making shit up about China.  Mainly has to do with the way China is taking over Africa without murdering everyone... which the UK for whatever retarded reason doesn't appreciate.

Mon, 02/17/2014 - 00:27 | 4444137 robertocarlos
robertocarlos's picture

The USA has a counter move to China pegging the Yaun to gold. The USD will be pegged to something wonderful.

Mon, 02/17/2014 - 00:50 | 4444188 Chuck Knoblauch
Chuck Knoblauch's picture

Peg it to the Kabbalah you Satanic bastard.

Mon, 02/17/2014 - 02:00 | 4444282 robertocarlos
robertocarlos's picture

LMAO.

Mon, 02/17/2014 - 00:40 | 4444170 steveo77
steveo77's picture

It is obvious that the nuke cartel has decided that it is necessary to "take it to the wall" to pretend that nuke reactors, esp MOX cannot blow up in a nuclear reaction.  

This is a full court press from nuke and media.   GE owns 600 media outlets.  

Just watch the video....massive concrete structures launched 1000 feet in the air in seconds.     Obviously, Fuku 3 and maybe 4 were nuclear explosions.    They covered up the video on 4.

http://nukeprofessional.blogspot.com/2013/12/fukushima-was-nuclear-explosion-here-is.html

Mon, 02/17/2014 - 01:07 | 4444218 andrewp111
andrewp111's picture

The power of the PBOC to print Yuan is unlimited. China's bubble will only pop when they start running short of something they can't print - like imported oil. Another 2008-like super spike in the oil price will pop lots of bubbles. When oil gets to $300 a barrel or so, it is all over.

Mon, 02/17/2014 - 01:50 | 4444270 Late onset ADHD
Late onset ADHD's picture

somebody help me out here...

A generation ago Japan is kicking it big time, and Japan Inc. (the book) is published. Japan starts to "believe their own hype". Their economy goes over-extended, and to save face they cook their books for a decade and a half. We see how that ended.

So answer me this: Did I miss the literary equivalent of "China Inc."?... as well as China's reaction?

A little help please.

Mon, 02/17/2014 - 01:52 | 4444273 Colonel Jessup
Colonel Jessup's picture

This is a very interesting article, and something that most folks who are involved in doing business in China know very well. The economy is a complete mirage, the construction and industrial capacity expansion were not based on actual demand. Take their steel industry for example - they have such a glut of capacity that the only logical move would be to idle the mills and wait for demand to catch up, but they cannot do so because it would wipe out several state-run banks. So, the mills stay open and dump steel below cost just to keep the debt service going.

The Chinese banks will go bust, just a matter of when, which to the point made by several others on here, is why they are stockpiling gold IMHO.

Mon, 02/17/2014 - 02:10 | 4444289 collon88
collon88's picture

This article, and all those that complain about the debt boogyman that is going to destroy the world, makes me sick.  ZH posters should know better too.  The debt problems are creations of the privately owned central bank ciminals.  They are the Mafia on steroids. 

The solution, in the US at least, is for the US Treasury to issue debt free money and simply pay off all the T-bills, notes and bonds.  Then, it should finance government expenditures with debt free money and cancel the income tax.  Currency does not need to be backed by gold.  It needs to be backed by integrity.

What are the chances of this happening?  All together now...no fucking way.  

Still, if everyone would just educate 2 people by giving them a copy of Ellen Brown's book Web of Debt for their birthday or Xmas and ask them to "pay it forward" to 2 more people...   

 

 

Mon, 02/17/2014 - 03:27 | 4444363 Global Observer
Global Observer's picture

In theory what you say is right. However, in practice it is impossible to convince a government to restrain its expenditure, if everyone acknowledges that money can be created freely by the government. If the government starts printing money with abandon, which every democratic government will, it results in hyperinflation. Zimbabwe of 2009 will be the norm and not an exception.

The current problems are not because of lack of money, there are because of insufficient resources to continue to support global growth. If the constraints on new money creation are removed, it will not reult in economic growth, only inflation and possibly hyperinflation.

Mon, 02/17/2014 - 04:27 | 4444430 satoshi411
satoshi411's picture

I agree apples and oranges bull shit comparison.

In the USA all debt is held by pensions so little people get fucked when big projects fail.

In CHINA all big land development is done by GUBMINT nobody gets hurt and gubmint can wait forever for DEMAND to return.

*

No fucking way to compare USA to CHINA,completely different system.

CHINESE the GUBMINT takes  all RISK.

IN USA all risk is socialized on the backs of 'savers'.

Mon, 02/17/2014 - 07:38 | 4444516 TheGoldMyth
TheGoldMyth's picture

collon88: Thanks ! I have my copy of Ellen Browns book and regularly check to see what she is up to.

Most of the ZH's are gold bugs who fear removal of their favourite debt system as this would collapse the price of gold. They fear and instinctively sense that if central banks stop buying gold, that is, they stop/are prevented from creating an artificial scarcity, it would destroy the value of their own gold. They are right about this much.

When i say "most", this is only a quantitative assesment and not a qualitative assesment. I don't get time to trawl through all the posts to find all the quality information like your own, but this is natural and to be expected.

Quality is not like that.

Even rarer is one who is astute enough to ask why the banks are not expected to pay interest on loans they have aquired when they are bailed out by the public. Or why they do not pay taxes and so on.

Mon, 02/17/2014 - 02:14 | 4444293 Element
Element's picture

Fred Sheehan pointed out a few years back that New York was so over-built on credit, prior to 1932, that it took until 1962 until any new large hotels were built within the city.

30 years of heavy urban construction collapse.

Such was the gross over-supply of hotel floorspace, created very rapidly, just prior to the US banking system meltdown.

 

Mon, 02/17/2014 - 02:47 | 4444325 Global Observer
Global Observer's picture

China can bankrupt the holders of bad assets. Unlike in the US, the bad assets have not been packaged into MBSs and CDOs and resold to public and pension funds. If the banks become insolvent, People's Bank of China can buy stock in the banks and increase their assets and make them solvent. Western commemntators may not like that approach, but there is nothing they can do about it. China is not dependent on Western investments, ratings or approvals.

Mon, 02/17/2014 - 03:06 | 4444346 northwind
northwind's picture

there's an old counrty song for that. " she got the mine, I got the shaft" or from the '60s Mr Natural says "gold will get you thru times of no money better than money will get you thru times of no gold".

Mon, 02/17/2014 - 03:15 | 4444351 fijisailor
fijisailor's picture

The Chinese are simply using capitalism to their advantage.  Up until 2009 they followed the earlier Japanese model to successl.  Since then they just kept the whole thing going using the printed money US model.  This gave them a huge infrastructure and command of the worlds' resources for nothing (money printed from thin air).  Since they are centrally planned they will now collapse the paper bubble and march on with most of the gold and continued control of the worlds' resources.  It's a brilliant plan really.

Mon, 02/17/2014 - 03:48 | 4444395 Global Observer
Global Observer's picture

China until recently imported everything using US$. They acquired US$ using exports. So whatever they got from the rest of the world was not for nothing. In fact, they have US$ 3.5 trillion in forex reserves. That is the amount they exported to the rest of the world, without importing anything in return. So, far from getting the infrastructure for nothing they got it by adding value to the rest of the world.

The US on the otherhand has been getting a lot for nothing. Every US$ held outside is value imported by the US from the rest of the world without any export in return. There are about US$ 12 trillion held by foreigners. That is the value of goods and services Americans received from the rest of the world for nothing.

Mon, 02/17/2014 - 07:21 | 4444520 fijisailor
fijisailor's picture

I guess you don't recognize the $25 trillion in debt they are now sitting on which dwarfs the $3.5 trillion in FX reserves.  What do you think they used that debt for?  As far as value of goods and services Americans have received, it is probably already in a landfill.

Mon, 02/17/2014 - 09:05 | 4444624 Global Observer
Global Observer's picture

Internal debt is completely different from external savings/debt. Chinese have internal debt owed to each other and the banks, denominated in Yuan, while China has external savings denominated in US$. Internal debt is used to stimulate the economy. Debt is the only significant way new money comes into existence in the modern banking and new money is needed for economic expansion. The US$ 25 trillion equivalent in debt the Chinese people are to each other and banks reprsents the assets created. Those owning these assets will be required to forego part of their future earnings to wipe the debt slowly.

Their FX reserves on the otherhand are claims on the rest of the world that they can use to import in excess of their exports in future, if the value of their savings holds.

Whether the goods and services Americans received from China are still in use has no bearing on whether they received them for free or not.

Mon, 02/17/2014 - 09:38 | 4444668 fijisailor
fijisailor's picture

Clearly that $25 trillion in domestic debt was used to finance their incredible internal growth and infrastructure buildout.  Sure they have $3.5 T in USD reserves but I do not see very much value added to the US and the rest of the world by their production of Walmart style trash.  That is one of their fundamental problems going forward.  The world is waking up to the fact that what they manufacture is more often than not wasted.

In the end these huge debts will be destroyed one way or another and the Chinese will come out looking pretty good with so much infrastructure and control of resources but on the other hand they will have an uphill battle selling crap to the rest of the world.

Mon, 02/17/2014 - 04:09 | 4444410 Debugas
Debugas's picture

China could lend out much more than US or Japan simply because chinese people still were not in debt a decade ago so they could and wanted to borrow

People in US are either already in huge debt or no longer willing to get loaded with more debt

Mon, 02/17/2014 - 04:24 | 4444419 satoshi411
satoshi411's picture

compare the CHINA today with 1950's USA, ....

the problem with post 2008 ameriKKKa is that there are no jobs and everybody has 'stuff'

[ Most of ASIA is like 1920's USA in terms of technology and access to transportation, so for makers of consumer products CHINA gives world an ERECTION ]

In china, everybody has jobs, and everybody wants stuff, and has cash, ... so given 'consumerism' is GOD, the GOD's have LEFT the USA for the future markets

The USA will descend into a post civil-war, feudalism, and CHINA will continue to have a growing middle class.

[ The USA hair-lip has too much stuff, and he is in DEBT to his eyeballs, nobody on earth wants anything to do with USA manufacturing ]

Given that CHINA is managed by SMART-MEN and USA is managed and controlled by assholes (AIPAC), there is no hope for any outcome in the USA other than death.

Mon, 02/17/2014 - 08:25 | 4444584 headhunt
headhunt's picture

Please move to China and enjoy your workers paradise.

Mon, 02/17/2014 - 09:45 | 4444682 satoshi411
satoshi411's picture

Thank you for the advice, I moved to China over 30 years ago, and I happier than a pig in shit.

Mon, 02/17/2014 - 04:20 | 4444417 Amagnonx
Amagnonx's picture

The huge difference between China and the western world is what the credit has been spent on.  In the west it has been spent on social programs, wars, houses, speculation and so on - none of these things can create any wealth.

 

Even if China does crash and cannot pay back its loans - all that infrastructure and capital still remains - it got something for its money, and that will have value in the future, and it is not erased by default.

 

The west has been on an alcoholic binge, all it is going to have left over is a massive headache.

Mon, 02/17/2014 - 04:36 | 4444438 satoshi411
satoshi411's picture

Exactly the CHINESE gubmint 'invested' in solid CAPITAL projects that can be sold down the line, and note to date the GUBMINT doesn't offer fire-sales, they sit on shit 5,10,20 years they can wait, concrete building's can wait.

The USA model is to steal from poor pensioners and give them paper and then rob them blind.

*

In CHINA big-project debt is on the back of gubmint which can carry costs to infinite.

In USA all costs have been socialized so RISK is on pensioner, yet profit goes to AIPAC.

Now that everything in USA implodes it means PENSIONER loses all.

In CHINA children take care of parents, what  novel idea?

The USA was always a PONZI and will go down and hard, the Chinese system is fail safe.

Mon, 02/17/2014 - 06:52 | 4444501 hootowl
hootowl's picture

I have been in major building construction for over 45 years.

I tell you the truth.  If those ghost cities sit substantially unoccupied for 15 to 20 years, they will be in an advanced state of disintegration.....maybe sooner, if the Chinese building codes are as deplorable as most of their other quality and safety measures.

If they are sold or leased to people who do not know how, or cannot afford, to maintain them, both the buildings and the infrastructure will probably degrade and disintegrate even sooner.

You are looking at a huge debacle unfolding before your eyes.

Mon, 02/17/2014 - 09:39 | 4444670 satoshi411
satoshi411's picture

Get off your lazy ass, and go to said 'ghost city's' look with your own eyes, until then shut the fuck up.

Mon, 02/17/2014 - 09:52 | 4444689 smacker
smacker's picture

go long on Chinese hardcore ;-)

Mon, 02/17/2014 - 04:43 | 4444446 satoshi411
satoshi411's picture

Everything goes UP&DOWN.

The UK is 15 years ahead of USA on decline,

The USA is 40-60 years ahead of CHINA on decline.

*

The USA blew its treasure long ago, on paper tigers and a house of sand.

The CHINESE have always thought about tomorrow.

The USA was taken over in the 1930's by a FORIEGN POWER, e.g. AIPAC.

The CHINESE that rule their nation, have a self interest in their people.

The USA is just a nation of serf's a very large penal-colony, where the convicts 'think' they're free, in CHINA everybody knows they're free, but they are free. In the USA they think they're free but they're not.

Sure in the USA if your rich your free, but MOST 99% are NOT rich.

Mon, 02/17/2014 - 06:44 | 4444495 hootowl
hootowl's picture

 

satoshi411

 China has also fallen prey to the fractional-reserve, debt-money, fraud.

 

It has cycled through the calculable calamitous fraud faster than any other government in history.

40 to 60 years to complete the faux-Hebrew/Babylonian/Khazarian engineered catastrophe.....Ha, ha. ha. ha.  You are looking the beginning of the end right straight in the eye as you type.

You better get out of your mother's basement now and then.  Your propaganda is obsolete.

Mon, 02/17/2014 - 08:19 | 4444575 headhunt
headhunt's picture

Trust me, China is not a free country and as hard as the left is trying to make the USA into a quasi-commie country it will not work. When the real crap hits the fan the USA will still be the best place in the world to be.

 

Mon, 02/17/2014 - 06:08 | 4444479 falak pema
falak pema's picture

Bottom line : THe world is caught between two giant squid systems of debt. Damn'd if we look to the West, damn'd if we look to the East.

Charybdis and Scylla conundrum looming right in front of us; while the Sirens of MSM sing their sweet songs of American Idol and George Clooney is in the Coffee shop! 

I need a bit of Sochi fog to forget the floods of London Town.

Wow, baby Cameron...run, run, run, and sing : "You'll never WALK ALONE in the paddy fields of Somerset!" ... Like the Liverpool gang of Anfield Road. Somerset now feels like "no Summerset, its all wet!". 

Mon, 02/17/2014 - 07:35 | 4444529 fijisailor
fijisailor's picture

The Chinese are clever.  They are using and have used USD (created with debt} reserves to buy commodities since the USD is the reserve currency/  They used Yuan debt to build out their infrastructure.  They have lots of experience with paper money and know it will collapse and when it does they will be left holding the most physical everything (including money, aka gold).  Meanwhile they will sacrifice their serfs extracting wealth from Africa.

Mon, 02/17/2014 - 07:54 | 4444545 Evil Franklin
Evil Franklin's picture

There is a way out.  WAR!

Mon, 02/17/2014 - 07:55 | 4444546 kurt
kurt's picture

Easy come, easy go. Its only a problem if they are going to "pay off" that debt. This "thousand flower" revolution of capitalism, or capumism, or commitalism, is all very new.

Please stop with the "Soros" it makes me want to puke. Its like seeing the Walburgs getting ANOTHER tv show or an overpaid athelete getting a huge endorsement deal.

So anyway, the chinese do the Roman battle formation "The Tortoise" for a few years after they suddenly default, the banker squeal, wardrums get beat... and the Chinese get to keep all their factories and borrowed technology. 

 

 

 

 

Mon, 02/17/2014 - 08:38 | 4444597 Kavklov
Kavklov's picture

Chinas and Russia has all the gold...

 

USA and ENgaland are FUCKED!!!!  GAME OVER  BITCHIES!!!

Mon, 02/17/2014 - 08:51 | 4444612 waldo simon
waldo simon's picture

Anything by Robert Peston should be treated with a big dose of suspicion.

During the Blair/Brown period 1997-2010 in the UK,he was the establishment mouthpiece.

Often front running the other MSM sources with pieces probably penned by the traitorous Gordon Brown himself.

The same G. Brown who telegraphed the sale to the market of 400 tonnes of BOE gold.

BBC/Robert Peston/Bankster/Globalist/anti-humanity scum

Mon, 02/17/2014 - 09:48 | 4444684 smacker
smacker's picture

Agreed.

And last time I looked, Robert Peston was a BBC member of "Common Purpose". That's the Marxist so-called charity peddling communitarianism, aka collectivism.

Mon, 02/17/2014 - 09:08 | 4444630 slowsmile
slowsmile's picture

Well here's all the crap on the table as I see it...

I would rather have China's problems -- her assets, gold, US Treasuries, gold and more gold -- than either of the US or European trash currencies or Treasuries.

I have also taken special note that China, in just one year -- 2013 -- bought over 11,000 tons of gold. Wow!! A tangible asset. Does the US govt even know what a tangible asset is ?

Other logical facts to consider...

China is now the largest gold producer and purchaser by govt and by her people in the world...Real bummer for the dollar, eh ? That means that there's no way the illustrious Fed can trash the rice of gold -- China will just buy up all the hard gold when this causes a spot dip. Am I wrong ? Anyone notice?

China will be dispensing her own Treasuries to the world soon when she opens up her own currency(more than partially backed by gold remember) and then her Treasuries -- wow!! not backed by hot air like US Treasuries but with gold !! -- will hit the streets. So, as her own Treasuries become far more attractive than the US's debt/Treasury cycle scam, everybody starts purchasing the much more stable yuan Treasuries instead of dollar Treasuries so America goes down the plughole and China becomes King Consumer and Exporter to the world. China's debt problems are all solved thanks to the shift to her own credit forever Debt/Yuan Treasuries cycle... Yawn.

I guess Jim Rogers has this already worked out...That's why he's been living it up in Singapore for 5 the last years with a daughter who now speaks fluent Chinese. 

Sorry, but the US has nothing but a currency based entirely on corruption, paper and ink with no gold or any tnagible assets in her govt vaults. So stop this bullshit about the big bad corrupt China badboy and her bad, bad Shadow Banking system. After all whose shadow banking system and dark pools caused the last financial collapse? And the US govt is the good guy?

Grow some legs for Chrissake....It's about global politics and power and America is trashing in this arena bigtime -- much more so than China. Christ -- just look at the Trans Pacific Partership deal that Obama wanted to be rushed through and kept secret. I mean how low and how desperate and despicable can you get both politically and economically as a givernment and as an economy? 

 

 

 

Mon, 02/17/2014 - 09:42 | 4444677 satoshi411
satoshi411's picture

Why do ZH assholes Fear China ???

...

Living in the United States, one often sees media reports about the issue of the “China threat,” in regard to China’s textile exports and oil imports. Seeing these reports so often makes me wonder: What is it about China that scares American politicians so much?

I recently went back to China; after seeing and hearing the things going on there, I am beginning to understand why. In Guangzhou, I made my way to an electronics store because I needed a small DVD player. There was one that particularly attracted my attention; you could watch TV on it, use it to go on a computer, download MP3s and even connect to a GPS system for your car. With this many functions, it only sold for 2000 yuan. Because of standards and warranty issues, I decided to wait and buy one in the United States since I figured that the United States would have the same player for about the same price.

Thinking over recent years, the proportion of U.S. imports of electrical appliances — especially refrigerators, air conditioners, televisions, digital cameras, computers, etc. — that are a product of mainland China is increasingly high. Not only that, the quality is just getting better and better, and the price is getting lower and lower. But thinking about the discussion of imports of goods due to mainland restrictions in the politics of the United States, I suddenly understand that the United States is in fact not afraid of Chinese products, but afraid of the ferocious momentum of development in this continent.

On our recent trip to Beijing, I stayed in an aunt’s home. Because she was too busy with work, she basically had no time to go to the grocery store and instead would just call a local market, telling them things like, “I need eight eggs” or “We don’t have any more filtered water at home, I want a jug of water,” and would get them delivered to her home. There was no need to tip and there was no extra charge. It was the same in Guangzhou. When there wasn’t any time to go out to eat, making a phone call to a restaurant for an order was the same price as eating in at the same restaurant.

These kinds of services in China are very common but in the United States, it is considered a luxury; there is not only a delivery fee, but also an additional tip, adding up to a total that may be half the price of the goods bought. Even worse, many shops and supermarkets in the United States do not even provide home delivery because the fee is so high and many people cannot afford it.

I’d like to think that the United States is not the only such country in the DVD player example. In the China that has become famous for being the “world’s factory,” not only is quality improving by leaps and bounds in the production process, the grade of products is also improving. When I first came to the United States 10 years ago, eating utensils made in China could, at best, only be sold as goods of average quality. Now, there are many name brand utensils sold in stores; the price is even lower than they were back then.

Who knew that returning to the United States, after circling the major electronic stores and looking through all the different types of machines, including American brands manufactured in China, there would not be a single DVD player that was multifunctional like the one I saw in China. This made me wonder: If one of those products was sold in the United States at a price slightly lower than other similar ones here, wouldn’t these mainland Chinese imports completely dominate the market here?

When I went back to China this time, I definitely saw a great improvement in terms of the service I received. The waiter service in restaurants was basically on par with that of other countries; the salespeople in large department stores were very knowledgeable in their service and goods. In Beijing and Guangzhou, one can book and make travel plans online, have someone deliver the tickets to your door and even buy these tickets at a local store near one’s home. It’s very convenient and prior to going to major tourist attractions, it is extremely easy to find tour guides. Looking for a place to eat? There are hotels everywhere. Sit down with a waiter and in a short while hot food will be on the table.

In the United States, besides joining a tour group, if you want to go out and travel, everything can be done online, from booking travel tickets to car rentals to looking up maps for travel routes. Although it’s very convenient, it’s a luxury to be able to indulge in the same kind of intimacy and company found in China and finding a tour guide at points of interests is incredibly difficult; one can only look at maps in order to find attractions and understand the history behind them. It is basically impossible to find attractions that are personally interesting unless one does extensive research beforehand.

As for eating, restaurants in major tourist areas are not only expensive, but almost always overcrowded; at dinnertime, it can be difficult to even find a seat in the restaurant to sit down and eat. Unless one wants to eat cheap junk food, one better expect to patiently wait in line for a table. If this seems unbelievable, one only has to look to the restaurant inside Disneyland in Los Angeles during peak dinnertime. Half an hour to wait for a table is considered lucky but at times, it would not be surprising to have to wait an hour to eat something.

In all fairness, the personnel service in the United States is not of low quality but because wages are high, many large companies cannot hire more people to provide the same kinds of exemplary service. Many services have been handed over to machines or the Internet to complete, but there are things that sometimes a machine cannot even do, like greet customers.

The sad thing is, according to statistics, 70 percent of Americans still travel only within the United States and 80 percent of the newspapers are about U.S. news, perpetuating this notion in the United States that although its system is not perfect, it is the best in the world. It is not indifferent or ignorant to changes in the world, but just lacking in understanding. However, one cannot help but wonder what a clearer American understanding of the Chinese mainland would do to change the hearts of Americans. I think that at least a few of them will feel scared.

Mon, 02/17/2014 - 11:16 | 4444786 Element
Element's picture

stateist honorable dickwad    attempt deploy reason    fail    bad    really bad    make dreary troll bait now  

worker paradise    where foxcon suicide not typical    no representative   no deep economic disparity    no crippling social malaise   is all roundeye lie   air fresh   air clear   see right across street today    water smell of bacon    is make hungry    road side full of wild flower    if have enough money    get anything    anything anytime    people do me    and convivial too   alas   china   you no need money pay    people are slave    do as tell   anyway   most people no near rich privilege as me    no even close    is ok    no see much    no even look    honesty not strong suit    no matter    they work harder   you see   if no like paradise    will help   sure will help   help commit suicide    ror haw haw    silly round eye    you just scareycat    china beat you    beat you ping pong long time    now beat you police state    you no even good    is clear   if go usa no even cat   what sort of restaurant have no cat    is true barbarian place    you scareycat but no kitty cat

china  china  china  rah  rah  rah

Mon, 02/17/2014 - 11:24 | 4444827 headhunt
headhunt's picture

you funny guy

Mon, 02/17/2014 - 11:22 | 4444825 headhunt
headhunt's picture

The personal services you write about are not readily available in the US because there are too many lazy people who the government will pay to sit at home a play video games. Why would these lazy people take a job delivering product or serving customers when they will be paid nearly as much to sit at home. Also, many believe these type jobs are below them and would never consider such a job even when they have no job at all. It is sad really.

Mon, 02/17/2014 - 11:49 | 4444857 Chuck Knoblauch
Chuck Knoblauch's picture

That damn U.S. Constitution gives every American the idea that they are too exceptional to service others. We have to do something about that document. It gives too many people ideas of exceptionalism and entitlement to things like rights and freedom. That's not a problem in China. Americans need to learn their proper place in this world. The sooner the better.

Personally, I hate being serviced by other people. I find it demeaning for both parties, even when consideration is exchanged for the services. I'm still capable of serving myself, thank God. I guess when I get older I'll appreciate some help.

Mon, 02/17/2014 - 12:17 | 4444919 Chuck Knoblauch
Chuck Knoblauch's picture

I bet you don't leave much of a tip for the good services you do receive. You probaly don't even look the server in the eye and thank them for the good services you enjoyed. Shame on you.

Mon, 02/17/2014 - 11:33 | 4444844 Chuck Knoblauch
Chuck Knoblauch's picture

You're the Mr. Rogers of China. You should podcast your observations.

Mon, 02/17/2014 - 10:15 | 4444712 Motorhead
Motorhead's picture

But China is buying all this gold....King World News and Jim Sinclair say so.

Mon, 02/17/2014 - 10:21 | 4444730 steveo77
steveo77's picture

WE scraped by a potential large CME that could have created a Carrington type event, and got by with a few blown transformers in Australia.   

From the Article linked below.   WHAT A JOKE.    We just had the most Earth direct CME in years, hit yesterday, with Tesla readings quite high.    Fortunately, somehow the CME fizzled when it came to creating electric currents on earth based equipment.    Believe me!    That is good thing.    Only a few dozen pole transformers burst into flames in Australia.  

And the bonehead scientists, feeding bullshit to the no gum shoe reporters, blame the fires on "light rain".    And the reporters don't question them on this?

We got a "by" on this one.   Carrington fizzles

http://nukeprofessional.blogspot.com/2014/02/the-2014-mini-carrington-event-hits.html

Mon, 02/17/2014 - 11:58 | 4444733 RaceToTheBottom
RaceToTheBottom's picture

So China is the US on debt steroids.

This has pretty big implications on my overhanging question:

Why will China treat Gold any differently than the US has treated gold?

Once China has enough Gold to reach "world currency" status, why would it not be in their interests to act like the US (and the west) and have an all out war with gold?

Since their debt is so much higher wouldn't it be actually in their interests to do so more than the US?  Correctly priced gold will restrict their ability to bailout their financial sector exactly the way it would in the US...

Tue, 02/18/2014 - 16:05 | 4449358 Amagnonx
Amagnonx's picture

Not at all - they will devalue their currency - inflating away the debts, they get to keep all the infrastructure they built off the debt - keep the gold, and get rid of the problem.

Mon, 02/17/2014 - 10:29 | 4444739 steveo77
steveo77's picture

I made a partial list of "lies of nuke" and got this comment on my blog, HILARIOUS!

AnonymousFebruary 16, 2014 at 2:09 PM
You are demented and delusional. The list is a sign of someone with little training in nuclear engineering and science.

Striking to the heart of the nukers, here is the list, add to it!!!

http://nukeprofessional.blogspot.com/2014/02/classic-one-liner-lies-of-nuke.html?showComment=1392600980458#c3060083523224222291

Mon, 02/17/2014 - 10:34 | 4444745 TuPhat
TuPhat's picture

One liners out of context have almost no meaning to them.  Some on your list aren't even one liners, the're one word.  Total garbage.  You should call it the Non-Pro nuke crap.

Mon, 02/17/2014 - 10:30 | 4444741 TuPhat
TuPhat's picture

To me it looks like China got something for their stimulus.  The US spent at least twice as much.  What did we get?  It looks like we got nothing.

Mon, 02/17/2014 - 10:36 | 4444749 RazvanM
RazvanM's picture

The game of chairs is in full swing. Until now, the stupid competitors were fucked by the 1st world countries - these senior countries have their chairs reserved. They destroyed whole industries in target countries (with help from IMF and other such leaches) and bought them at fire sale prices with freshly printed fiat. When there are no more targets available, they are created through Arabian Springs. But these easy victims are harder and harder to find.

The next step is to stir some Asian crises, entagling China and Japan in a pointless war with the sole winners being US and UK. Japan is curently led by a government that is an US puppet. The US occupation in Japan tries very hard to start a war in Asia. But even some trade wars between the countries in the region will do - US just needs time to take out competitors one after another (see Europe, where the US banks first devised financial instruments of mass destruction in Greece, Spain, Portugal, Italy, Ireland etc., then the information was leaked to the media at the proper moment for US -> end of EURO as a competitor for the USD).

The only threat to US is a coagulation of forces to counter the US/UK aggression. I just hope that US/UK aggression will be counterred sooner rather than later. This crazy game already does a lot of damage in weaker countries and the Somalia/Mexico/Afganistan scenarios are multiplying.

Mon, 02/17/2014 - 10:44 | 4444751 implacable
implacable's picture

I don't doubt the overall thesis of massive Chinese credit expansion but it seems like the first chart - the one with 218 B vs. 149 B is comparing apples and oranges. The QE-related increases (in the US at least) expand the direct liabilities of the Fed, i.e., base money, what we might think of as M0 (M-zero). But it seems to me that bank lending, as is displayed on the Chinese side, might better be compared with M1. Looking only at the US (since I'm too lazy to locate the comparable monthly numbers for Japan) per https://research.stlouisfed.org/fred2/series/M1, that aggregate increased from 2639B on 1/6/14 to 2795 B on 2/3/14, an increase of 156 B.

Am I misconstruing something?

Mon, 02/17/2014 - 11:15 | 4444813 dizzyfingers
dizzyfingers's picture

"Here we go... Navy Chief: US Would 'Help' Philippines In South China Sea"

More cia bullshit in Asia... Spending down in USA, have to spend billions to keep the 1% happy.

Amazing how one military man can speak for USA, no equivocations like "I hope....believe...think...USA should....".

Mon, 02/17/2014 - 11:56 | 4444873 Element
Element's picture

Thing is, if he's saying it, it is in fact US policy, he's just putting up the posters on the street poles, for the rock concert that's to follow. The debate is over, but of course the real world is never so neat.

But if China does anything militarily aggressive from here this will boil up so fast it will make everyone's head spin.

The US population may have had enough of deployment and war but in reality the wars so far have been light skirmishes in tiny insurgencies that were barely intense enough to maintain basic proficiency. Plus it did little to wear down the navy and air force(s) of the US. The US Navy and air forces are going to put a gun to China's head and stare it down. Afghanistan is done, Africa is poor so small-potatoes. The money, power and weapon sales are in Asia, and the strength of the US is all around it now.  The US politico-military establishment senses it can regain its mojo, and the MIC is just dying to sell the munitions and platforms.

This is going to go on for a very long time because the USN is not going to let the Chinese gain and hold even one inch beyond its current territorial limit. So Beijing is now doing all it can to make nice to Taiwan and try to take it out of the equation, thus the PLA gets major strategic gain, minus conflict.

That would put the Jap's southern island chain under pressure, greatly undermining Japanese strategic position, which splits up east Asia into north east Asia and south east Asia, and the main-axis of approach into mainland Chinese territorial airspace is thus massively reinforced. So Beijing are going to do everything they can to serenade or subdue Taiwan first.

Hence the new US base on Okinawa. This is the beginning of the overture to the Philippines for a rapid return of the US to the Philippines, for exactly the same reasons. To prevent a split in east Asia, or cover it, if one opens.

Mon, 02/17/2014 - 10:57 | 4444782 rsnoble
rsnoble's picture

You  likey fryed wice!

Mon, 02/17/2014 - 11:28 | 4444832 muleskinner
muleskinner's picture

China built a wall that has lasted for 20 centuries or somewhere in that time frame, beginning ca 220 BCE.

One of those projects that was 'off the charts'.

The Chinese are patient and tenacious, if you ask me.  

I won't lie, Great Wall Beef is a great take-out order and dine-in too.

Mon, 02/17/2014 - 11:42 | 4444865 chinaboy
chinaboy's picture

Bank loans are legitimate economic activities. The Fed and central banks are not banks.

Mon, 02/17/2014 - 16:05 | 4445468 Chuck Knoblauch
Chuck Knoblauch's picture

The FED and central banks are not legitimate economic institutions. With NOTHING on deposit, they loan money that never existed. Well, if none of this money is real, then why are we so worried? The contract with the government for debts is void because counterfeiting is illegal.

Mon, 02/17/2014 - 11:57 | 4444885 Chuck Knoblauch
Chuck Knoblauch's picture

This is why China will kick America's ass -

http://www.youtube.com/watch?v=5lUPDM6ljsE

Mon, 02/17/2014 - 14:47 | 4444899 Chuck Knoblauch
Chuck Knoblauch's picture

In the U.S. these problem children would become drug addicts and/or criminals serving time in prison. In China, they are given a second chance. I'm impressed with China's desire to empower their young people to succeed. Only $3,000 per year per child doesn't seem like a bad investment for a stronger society.

300 million Chinese kids in school?? OH SHIT!

The infiltrators don't want a strong America.

 

Mon, 02/17/2014 - 12:12 | 4444912 SystemOfaDrown
SystemOfaDrown's picture

If the wealth of this economic boom creates a very large middle-class in China, then tax revenue can pay off their debt in the long run. If wealth is concentrated to a few hands, then look-out-below.

Mon, 02/17/2014 - 12:29 | 4444956 Chuck Knoblauch
Chuck Knoblauch's picture

China needs to replace the American middle class consumer who is going extinct in a new third world reality. I wonder where the U.S. government is going to get the tax revenues it needs to service its debt? No middle class jobs, means no middle class consumer, means less tax revenue, but we have the FED pumping QE, right? That's sustainable long-term, yes? Give me some HOPE, Obozo!!!

Mon, 02/17/2014 - 12:21 | 4444924 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

.

Mon, 02/17/2014 - 12:23 | 4444927 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

.

Mon, 02/17/2014 - 12:20 | 4444933 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

They got lots of apartments in empty urban centers as collateral to settle up internal debt without having to break into the reserves.

 

Mon, 02/17/2014 - 12:29 | 4444960 rosiescenario
rosiescenario's picture

If China does implode, what will that mean for PM's? I am not so sure it is bullish as it would remove a large number of buyers from the market.With a withering economy producing little income it might also force those Chinese already owning gold to sell it.

 

 

Tue, 02/18/2014 - 20:15 | 4450434 Herdee
Herdee's picture

One clue to watch for is the shear tonnage of gold buying in China.A new record in January but if she keeps climbing rapidly,something's got to give and it'll be gold going through the roof.We'll have to watch the numbers to see if the heavy buying continues and gains momentum. 

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