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The Ghost Cities Finally Died: For China's Steel Industry "The Outlook Is The Worst Ever Amid Unprecedented Losses"
It's almost difficult to believe, but just 8 years ago, in 2007 and right before the world was swept in the worst financial crisis in history, China had only $7.4 trillion in debt, or 158% in consolidated debt/GDP. Since then this debt has risen to over $30 trillion (specifically $28.2 trillion as of Q2, 2014) representing a staggering 300% debt/GDP.
Here is the summary breakdown from McKinsey.
This means that China was responsible for more than a third of all the $57 trillion debt created since 2007, making a mockery of the QE unleashed by all the DM central banks - something we first noted about two years before the famous McKinsey report went to print.
However, it was precisely this credit expansion that not only allowed China to completely ignore the global depression of 2008/2009 but to build lots and lots of ghost cities such as these.
To be sure, many noticed but everyone kept quiet: after all, to build these cities China not only had to create trillions in debt, it had to import a hundreds of billions worth of commodities form places such as Brazil and Australia.
Then, in the late summer and fall of 2014 something happened: for whatever reason, as we noticed one year ago, the most unregulated aspect of China's financial system, its shadow banks, not only stopped lending money but actually went into reverse, thus putting a lid on China's Total Social Financing expansion, which had been the world's "under the radar" growth dynamo for so many years.
At that moment not only did China's ghost cities officially die, but it meant an imminent collapse for China's feeder commodity economies such as the abovementioned China and Brazil.
In the US this phenomenon was given a very simpler name by the brilliant economists: "snow."
And since China's domestic demand, not only from "ghost cities" but all other fixed investment was a function of pervasive credit, suddenly China's commodity industry in general, and steel industry in particular, entered a state of shocked stasis.
To get a sense of how bad it is, look no further than China's steel industry. It is here that, as Bloomberg reports, "demand is collapsing along with prices," and "banks are tightening lending and losses are stacking up, the deputy head of the China Iron & Steel Association said on Wednesday."
“Production cuts are slower than the contraction in demand, therefore oversupply is worsening,” said Zhu at a quarterly briefing in Beijing by the main producers’ group. “Although China has cut interest rates many times recently, steel mills said their funding costs have actually gone up.”
Meet the deflationary commodity cycle in all its glory:
China’s mills -- which produce about half of worldwide output -- are battling against oversupply and sinking prices as local consumption shrinks for the first time in a generation amid a property-led slowdown. The fallout from the steelmakers’ struggles is hurting iron ore prices and boosting trade tensions as mills seek to sell their surplus overseas. Shanghai Baosteel Group Corp. forecast last week that China’s steel production may eventually shrink 20 percent, matching the experience seen in the U.S. and elsewhere.
“China’s steel demand evaporated at unprecedented speed as the nation’s economic growth slowed,” Zhu said. “As demand quickly contracted, steel mills are lowering prices in competition to get contracts.”
Actually no, it has nothing to do with China's fabricated economic growth and it was everything to do with the unbridled credit expansion that amounted to over $3 trillion per year. That credit expansion, which has not yet been halted, is no longer making its way to the sectors in the economy, such as the abovementioned steel mills, that need it most.
As we reported a month ago, at current commodity prices, over half the debtors in China's commodity space are generating so little cash, they can't even cover their interest payment. They are, therefore, utterly insolvent, and the broader Chinese bond market is well aware of this - this is the reason why suddenly credit funding has collapsed.
But wait, it gets worse: because if the PBOC had made interest rates not artificially low (yesterday China's 10 Year bond was yielding just about 3%), eventually demand would appear, however nobody wants to lend these companies at rates approaching those suggested by the market.
"Financing remains an acute problem as banks strictly restricted lending to the steel sector,” Zhu Jimin said. “Many mills found their loans difficult to extend or were asked to pay higher interest."
And yet in an environment of plunging interest, nobody wants to be seen as paying a huge premium above market: such an admission of defeat would be quickly perceived as a signal of an imminent default.
And this is how China's steel (and commodity in general) sector has suddenly found itself paralyzed without access to funding, and with collapsing end demand. As a result its only option is to do more of what got it there in the first place: produce ever more in hopes of offsetting tumbling prices with surging volume, thus accelerating the deflationary spiral that much more until ultimatly steel may be literally handed away for free.
For now, however, China's steel mills are praying this inevitably outcome can be somehow avoided.
Medium- and large-sized mills incurred losses of 28.1 billion yuan ($4.4 billion) in the first nine months of this year, according to a statement from CISA. Steel demand in China shrank 8.7 percent in September on-year, it said.
Signs of corporate difficulties are mounting. Producer Angang Steel Co. warned this month it expects to swing to a loss in the third quarter on lower product prices and foreign-exchange losses. The company’s Hong Kong stock has lost more than half its value this year. Last week, Sinosteel Co., a state-owned steel trader, failed to pay interest due on bonds maturing in 2017.
Crude steel output in the country fell 2.1 percent to 608.9 million tons in the first nine months of this year, while exports jumped 27 percent to 83.1 million tons, official data show. Steel rebar futures in Shanghai sank to a record on Wednesday as local iron ore prices fell to a three-month low.
The conclusion, even though from Bloomberg, is quite terrifying: "China’s mills face some of their worst conditions ever and the vast majority are losing money, Citigroup Inc. said in September. The outlook is the worst ever amid unprecedented losses, Macquarie Group Ltd. said this month."
China’s steel production may contract by a fifth should the country’s path follow the Europe, the U.S. and Japan, Shanghai Baosteel Group Chairman Xu Lejiang told reporters in Shanghai last week. The company is China’s second-largest mill by output."
Considering China's version of Glencore "Sinosteel" effectively went insolvent one week ago (followed by what may or may not have been a government bailout), the fallout is just starting.
The cherry on top is that China itself is now trapped: it simply can't afford to let anyone default, as one bankruptcy would cascade across the entire bond market and wipe out countless corporations leaving millions of angry Chinese workers unemployed, and is therefore forced to keep bailing out insolvent companies over and over. By doing so, it is adding even more deflationary capacity and even more production into the market, which leads to even lower prices, and even greater bailouts!
In short: this is a deflationary toxic spiral, because while that $30 trillion in inflationary debt led to easy growth and much wealth and prosperity on the way up when prices were soaring and monetary transmission mechanisms were not clogged up, now that China has hit hit a 300% debt/GDP and the direction of the arrow is in reverse, all the growth and all the expansion of the past 7 years will be promptly unwound as mean reversion demands payment.
But perhaps most importantly, as we first reported last week citing BofA's David Cui, we now have an ETA when this whole Chinese debt house of cards, some $30 trillion of it, bursts with consequences that will be so devastating not only China but the entire world, as the one catalyst that pulled the Developed Markets out of depression will be, poetically enough, the same one that pushed it right back in.
On the current trajectory, we doubt the market can stay stable beyond a few quarters, especially if some SOE and/or LGFV bonds indeed default.
Finally for those who would rather frontrun this runaway train when it slides off the tracks, here - again - is a list of the Chinese bonds that will almost surely default first.
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But China is playing the loooooong game. Those cities were suppose to fill up and all those condo's were going to make the purchasers rich.
Funny how there most important asset now is the UST! and we all know that is worthless too...
There is alway a risk for central planning. Sometime centralized authority is get it right, but most time, is get wrong.
http://twitter.com/BorisAlatovkrap
And yet the US aspires to China's "miracle" of centralized control while simultaneously copying Europe's socialist welfare state. The best of both worlds.
Bernie enthusiasts want that. The "US" is hopefully going to laugh him off.
Bernie isn't going to win but the seeds of socialism have clearly taken root. It will only grow from here out.
I down voted you because I hope against hope you are wrong and I am willing to fight.
Let me get this straight. For all their debt, China got several thousand turn-key, state of the art, settlement ready cities all around their country, and indeed the world, and for all our debt we got Detroit.
And I'm supposed to believe that they're the idiots?
all made with chineese steel and dry wall. so yeah idiots. all to keep the slave hands moving.
Unprecedented seems like such a harsh word. Yet "fucking huge" seems even harsher. Unprecedented it is then.
The largest steel company in the world which was Arcelor Mittal has shut plants around the world and it's stock price has plunged from USD 100 to USD 5.00.
https://www.google.com/finance?q=NYSE%3AMT&ei=NfsyVuCnEojPUaDXtogE
In addition, other largest ones being Tata Steel, POSCO, Capara etc have been closing plants or shedding staff or restructuring debt which is runing into billions of dollars for the better of the last decade but nothing on ZH except China.....Don't largest plants matter?
China steel companies too are suffering amid a global steel glut but their bond sizes are USD 158m each which is peanuts compared to the largest steel giants on the planet.
US Steel share price has plunged frm USD 182 to USD 11.00, a drop of only 94%....https://www.google.com/finance?q=NYSE%3AX&ei=OfsyVoHHEtfCU-v3nvAC
To know how many Steel plants closed or job cuts in steel plants have happened OUTSIDE of China, do see this: list steel plants closed
Steel is a global problem due to massive demand destruction whose collapse is done because of this:
Job cuts in ALL sectors --> Demand destruction of basic goods and services --> Lack of demand of housing and malls and roads and bad debts for Govts --> Low demand for all commodities including steel.
#largest_plants_matter
https://www.youtube.com/watch?v=9rjsAiPPZfc
LAMCO MINING in Liberia 1969 - 1974
https://www.youtube.com/watch?v=9rjsAiPPZfc
DB is correct. It shows in retial also which is taking a bloodbath right now all over the world. As demand plunges the flood of inventories pile up in the aisles and in the back rooms. Stores have put out their holiday decorations long ago since they have no place to store them until Christmas plus each store wants to get the jump on those few consumer dollars out there.
~"In addition, other largest ones being Tata Steel, POSCO, Capara etc have been closing plants or shedding staff or restructuring debt which is runing into billions of dollars for the better of the last decade but nothing on ZH except China.....Don't largest plants matter?"~
Of course they matter. But they are not in countries with a $28.2 TRILLION dollar deficit. Personally I didn't realize that Chinese debt was that high. Screw, I thought we here in the USA were spendthifts at $18 TRILLION. We're pikers at this. Of course, we aren't cooking the books in the valuation of our currecy department like the Chinese. If the yuan were freely traded, just how bad would their debt really be?
Breaker, breaker, that's a big ten-YIKES!!!, good buddy.
not drywall, no. concrete and steel. but the concrete is generally rather shit quality and they cheat on the steel usage. it's built well enough for them to stand, but most of it has a life of 30 years tops.
A pretty building does not make a city.
Cities need the hidden infrastructure to work, or they are USELESS !
Water. Wastewater. Electricity generation. Schools. Roads and maintenance.
I don't see it. And.......it fails if it sits idle. Entropy. All systems, and a building or a city is a system, require input of energy and maintenance to survive.
These buildings, just because they are new and vacant, do not remain in a state of new, or preservation, awaiting occupants. They deteriorate. They rust. They mold and mildew, especially if not heated or cooled. Lube in motors drips away. Shafts get rusty and seize. Gaskets deteriorate. A/C and heating systems are not designed to be installed and sit idle for years.
Want an analogy?
Park a car in the garage, without prep for long term storage, and then pull it out in five or seven years and attempt to drive it. If it starts, ( it won't) it would be a death trap until the the tires, bearings, engine, etc., are serviced.
And my question has always been.... Did they even build the infrastructure ( water, wastewater, power generation) required for these cities? I doubt it. Those systems definitely are not made to sit idle or underutilized.
These are piles of potential recyclable materials. Pretty piles, but that's it.
Yep, the ghost cities illustrate a classic example of socialist thinking, one that just cannot see the costs because everything is an "investment".
Every investment in a new road, bridge, hospital, school, apartment block adds a burden of maintenance to the system, without any real use all these "investments" have a guaranteed negative return each and every year, and on top of that you can kiss your capital goodbye.
Our political systems are riven with this sort of thinking and our media are so packed full of wannabee politicians, eager to influence the electorate and desperate to push their political agenda they don't question it, perfect fodder for the sheeple who are apparently unable to think for themselves. In the UK it was Teflon Tony who first started mis-using the whole "investment" phrase, followed by crash Gordon that lead the world in QE madness to try and keep the farce going.
"Lube in motors drips away. Shafts get rusty and seize. Gaskets deteriorate."
That's what she said.
Those aren't seeds. Those are phage plaques.
"This Twinkie represents the normal amount of fuckedupness in an economy. From this morning's sample, the amount of fuckedupness in China's economy is a Twinkie approximately 35 feet long and weighing 600 lbs."
"That's a big Twinkie."
That Twinkie would be Unprecedented.
Honestly, if you think about it... a civil minded genious that was a savant at central planning would almost certainly be a boon to the USA... at least with the current legislative structure. The problem is those people don't run and no one likes them. Long term, they are bad, but freedom requires anarchy and we aren't ready for that either. so we get mediocre control freaks instead.
Now here's a situation where Donald Trump would simply negotiate a deal where Europe pays the Chinese to take the Syrian refugee nightmare off their hands and stuff them into their ghost cities until things settle down and ISIS clears out to Tajikistan (border of China... don't worry you'll be hearing about it soon).
Of course The Donald would also be wise enough to negotiate extremely favorable lease options on all of the empty buildings first...
This shit really is mind boggling. This giant condos and other buildings have to start to decay after a few years. Are they running any A/C to keep the moisture out o fthe interior?
Big condos like that require a lot of maint.
kept black haired sheeple busy with hope and change, whilst the masses got tidbits. but now the piper cometh, but not before the iron fist strikes(again)...
I was in China recently...this buildings do not appear to be powered up. In many cases there are no windows on these buildings either. My gf was amazed by the empty buildings everywhere. Gotta say though, they have bullet trains, and the US likely never will.
Chinese not Americans are buildng a bullet train from San Diego through the OC and LA to Las Vegas.
Was thinking the same as another poster above that the muslim rapists in Europe should be sent to these Chinese ghost towns.
I was on the same side of the fence as you on the bullet trains issue, but here's reality.
HSR made *some* sense in China. The rail is nationalized, passenger is subsidized by frieght and by getting passenger onto its own tracks they were able to increase frieght capacity. HSR development provided a lot of jobs when jobs were needed and it's a fixture of national pride.
You have high rail volume anyways, might as well speed it up and modernize it. The highway system is not mature enough, airports are overcrowded. Population densities ensure that trains won't be empty. They could definitely make it more efficient if they followed a EU model of competing companies and variable ticket prices, but whatever.
In the US... our highway system is rather good, we like to drive. You basically MUST have a car in the US or you are proper fucked anyways. The make HSR work it would either have to be very expensive or all rail would have to be nationalized... or it would be a giant money hole constantly attacked. The population densities don't support it either. By the time you create a network of points A and B, to get the land rights you'll have to make deals to detour to C, D, E, F, G, H, I, J, K, L, and M. None of those points will add value, but you'll be forced to build those stations for the 50 people a year who will take the train from there anyways.
And in the end, it costs an amount that makes flying cheaper. Flying in the US is indeed a fucking pain in the ass, but look at the figures.
Assume a 200mph average speed system. Anything over ~4 hours is better to fly from personal experience. So, we're talking a train range of ~800 miles.
The stations must be located in the heart of the city or have mass transit options to link them. It's a HUGE investment, one that probably wouldn't pay off, and in the end, americans have cars, like driving and we enjoy roadtrips.
China isn't a "roadtrip" nation. You dont have interesting shit along the way. It's just overcrowded farmland, corrupt cops, scammers and roads that should exist by don't. It's not quaint, it's not fun, it's rather hellish and generally your traveling will be when the rest of the nation is doing it as well. The road fees are also expensive, as is the gas.
Would HSR in the US be nice? Sure, but it'll never get done, not where it could be useful. At best you end up with an open square going chicago to new york to miami to houston. west coast is cut off entirely and your point AB distances are rather bad. To fill in the network and make it competitive you end up building lines where there is not enough demand.
Furthermore, the city-boom is going to go bust soon enough. Millennials are putting off having kids due to the economy, but that won't last forever. They are rushing to the cities now, but once they have kids, they realize it's not the place to raise them. Densities drop more, and it makes things like HSR less feasible.
HSR works in china because china is all about high density blobs of humanity living in high-rise prisons with poor planning. It works in the EU because of great services. It works in Japan because Japan is rather small and it allows for long distance commutes into city centers. For it to work in the US, there would have to be a massive infrastructure overhaul and regulations suspended to speed up completion times.
Genuine question Boris, Materially, what would happen if China declared all these debts, everywhere in the system, null, void, gone? All of them?
The Oligarch class in China would be shooting themselves in the head, financially speaking. Shortly thereafter it would happen literally. Don't hold your breath.
The Chinese Oligarch and leaders have over $4T stashed in the Caribbean at last count.
They are deeply invested in our financial system in more ways than one...
What happened the last time they did it?
They repudiated their debt once, why not again?
Why not fill up those ghost cities with mid-east refugees? A win win for all ....
Yes, put them all in a country where the main source of protein is pork.
China is playing a long game. But dethrowning the USD hegemon requires a yuuuuuuuuuuuuuuuge toxic crap paper debt supply to compete with the warchest/cesspool that Greenspan & Bernanke spent two decades building.
Therefore, the One Child Policy is no more.
The 'Ghost Cities' are for future use, the 'themes' that they are built around may give some clue regarding the expected occupants!
More here......
http://beforeitsnews.com/conspiracy-theories/2015/10/time-travel-is-no-l...
2 child policy might fill them up...
If nobody else will say it, allow me: Sum Ting Wong
Sum ting be li be li wong! Mei bi to tau li su ku lu da pu!
This isn't looking good for me fortescue metals shares mate
You can put the man in a mansion, but you cant put the mansion in the man.
This is one of the reasons I've said before that China is the greatest fraud of the 21st century.
That little Paris looks kinda cool. I wonder where they put the mosque?
+1
They doctor each number that comes out of their country. They have built all these ghost cities with cheap cement which useful life will be half of what it is suppose to be....the great urbanzation of there rural folk, is going to into reverse, when those people have no means to live even in the shanty cities beside the ghost ones. Also don't forget 28% of the people who will be 65 in 2040 in the entire world, will be residing in China.
Agreed, Sunday. Do you know what one of the fastest growing economies in the world was in the 1950s and 1960s? The Soviet Union.
Shhh.....Vlad's grandparents never did anything wrong....if it is Russian at ZH these days, they poop gold nuggets.
Jesus we would have 7% growth too if we were stupid enough to print THAT MUCH money but even the USA government and fed isn't that stupid despite what we say.
China's credit card is unreal. I want one!!!
This is one of the reasons I've said before that China is the greatest fraud of the 21st century.
makes a nice bookend to the USSA being the greatest fraud of the 20th century, ying and yang in a kinda fucked up kinda way
Great fraud, yes. But the Grammy has to go to Vladimir Putin for his pantomimed Chinese Love Song, which is all about helping bring down the great fraud. Our man in Moscow deserves a much bigger role in world affairs. Maybe Vlad has a good use for the refugees flooding into Europe. Siberian miners? I'm willing to bet these young men flooding into Europe could be decent hole diggers and sack luggers if they were regularly shown how a whip works.
Putin is a problem solver.
Can't Western Europe rent a Ghost City or two and then ship the refugees there?...
So - what's the bottom line here? If China collapses (which I've always believed would happen) - what will happen worldwide?
I've never, ever believed one number that has ever come out of China - they're a nation of liars, manipulators and copiers (they can't invent shit).
In time, China's un-lived in cities will start to crumble and look like a set from Planet of the Apes or Divergent. Add some pterodactyls and you have the makings of a great movie set.
China will not collapse. It will stall and erode slowly. That's what we want to happen. Time to bring other countries up the scale. China had their fun but went too over the top with their military build up.
China is a mushroom cloud in the making. Their economy is going to crash like John Harball's career did last night, and the natives are going to start placing party members heads on pikes. Mark my words, China will end up in an all out revolution within 5 years, with the USA not more than a few years behind them. Yes, shit is gonna get real.
Wait a darn minute. Iron ore exports to China are at record highs as well as world wide oil use.
It's the dollar value that is lower.
Fair enough a loss is a loss is a loss however to say we are using less oil or iron ore worldwide is bull.
And yeah it does make a difference when we are talking about what matters. If commodity prices were to recover the current output would be in terms of GDP nice and high.
So where is the actual production slump?
Paul Eberhart has seen some pretty creepy ghost towns in new mexico, like area 51 ghost stuff. Who is paul eberhart? www.pauleberhart.com
Don:
What kind of shit are you trying to pimp here ? This is from Paul's link you posted ... My book can make you rich beyond your wildest dreams, and I will share it with you just as soon as it is funded".
What the fuck kind of SCAM is this? Paul's financial secrets are so great and his "system" so SuperFuckingFantastic that he has to use a "Go Fund Me account to get funds for his book? Give me a fucking break. Go SPAM this shit somewhere else or pay for a fucking ad like an honest man.
Fucking Con Artists, always looking for an easy mark....
Those who can, do. Those who can't, teach & consult, it would seem.
Those cities could solve the refugee crisis.
Has anybody here ever been to the upper floors of those buildings? Does the water work? is it hot? can you flush a crap?
I did once. But like all things made in China I thought it was about to fall apart so had to get out quickly.
I think their one aircraft carrier is made of Lego too.
Aircraft carrier theme park.
http://www.tripadvisor.com/Attraction_Review-g311293-d1865169-Reviews-Ti...
The one aircraft carrier is a Russian castoff... world power, lol.
China has 28 trillion in debt...but a bunch of ghost cities to show for some of the spending...but for the USA:
According to the OECD, general governmentgross debt (federal, state, and local) in the United States in the third quarter of 2012 was $16.3 trillion, 108% of GDP. The ratio is higher if the total national debt is used, by adding the "intragovernmental debt" to the "debt held by the public."
And we have very little to show for all our spending.... Sum ting wong?
I do not understand why the Chinese did not buy gold instead of property. I guess they forgot their heritage (Mao disrupted that) followed the advice of 'Western' experts. Too bad for the many middle class Chinese who thought they were going to retire in cozy comfort.
Simple. Gold doesn't give you returns like investments do - it's a haven not an interest bearing return historically.
The real estate was giving returns until it busted, and now the Chinese turned to stocks - which busted and so now will turn to something else like foreign property which is about to bust.
At the end of the day there is no return possible to pay off the debt China has considering the interest rates and borrowing costs.
Without an investment giving 8% or more PA return the China model collapses. The Chinese are find this out the hard way.
One way to look at it is, how much did Chinese credit pull consumption and GDP forward in time? If the presumptive middle class consumers actually show up, in principle this could all be mopped up if it didn't get too far ahead of itself. That was always the plan.
If, however, any of several things go wrong (Sum Ting Wong), then all bets are off:
1. The credit bubble feeds on itself, gets too frothy, doesn't deliver tangible assets
2. The 'big turn' from an export-oriented mercantilist model to a domestic-oriented, consumer model craps out
3. Corruption, either domestic or foreign in origin, intervenes and gums up the works
4. There is just a systemic 'mistake' or tragedy, everyone tries in good faith but the numbers just fail for some reason (not enough or too many households, incomes can't support enough consumption, savings patterns don't provide enough investment, etc.)
Personally I don't see the current situation as determining the entire game's outcome...yet. Much more tea to flow through unfingered dike first.
I just read on Yoohoo, that the consumer in China is getting strong now, lol.
Yeah retail sales are booming - strange commercial property vacancies at all time high. Gotta trust those Chinese figures!!! Guess they have a flawed abacus lying around with a few too many beads glued to one end.
China just rid of their one-kid-per-family rule, those ghost cities will be full of chinese spawn before WW4
Those ghost cities are owned by Chinese - not the government and those farmers nor anyone is buying.
Unless of course the government takes the housing which is entirely possible. Or ensures a crash in real estate and then buys it up cheap - wiping out the wealth of most Chinese and returning it to the government...sounds like what a communist government can be entrusted to do.
You are deluded.
In China you only have and are allowed the illusion of owning anything. As long as the Govt allows it, then it belongs to where it always really belonged ALL ALONG
That's my point you idiot.
Are you really as stupid as you look in the avatar?
itsq the timing.
you are out by a hundred thousand years you fucking cro mangnon
By the way dumb gook, Cro magnon was a superior form of human being that thrived in Europe while you stupid mongloid neanderthals existed.
http://www.bibliotecapleyades.net/ciencia/esp_ciencia_life32.htm
People get overexcited about ghost cities in China.
They needn't do. If i was the US it would be a cataclysm, but its not, its China.
I have two businesses in China and know smart people there in govt and out.
I also went in 2003 to one of the first ghost city's, XinXiang near Zhenzhou, ans was awesome, seeing a deserted city like that.
in 2010 I went back again and it was throbbing. Unimaginable change.
A billion Chinese are still rural subsistence farming.
In the years to come the chines will move them to the cities as the farming gets reformed.
They too will boom and people will go and do as they are told.
China does not think like the smug oily fatuous fuck wits in the US.
They didn't borrow trillions to waste on wars and fucking buying votes from immigrants and fucking fat wasted shit for brains socialistic couch squatters.
They built cities, ad they used the west to pump prime that financing and the idiotic US and EU will end up paying for it, by the deflation that's coming and is now unstoppable.
The UK is fucked as far as steel goes. Its infrastructure for steel-making is 50 years old and its practices are laughable
China has built and is still building state of the art efficient plants even it is massive overcapacity.
Thy can keep them open as long s they decide, no matter the price of steel and can keep on forcing ore down as long as they are the only buyer in town. and still undercut anyone else on the planet as far as selling steel goes
Fuck off and goodbye Australia.
Fuck off and goodbye UK and soon its fuck off and goodbye USA.
They will still own the manufacturing base for the world.
I cant see the UK or US investing in state of the art steel plants any soon, can you, or any other manufacturing capacity.
Fucktards on Wall street have solved that with zero capex to fund their dividends and buybacks and stock manipulation.
Think China is not aware, Sure they know there are going to be problems when the implosion comes, but they calculate when the bust is over they will be the strongest standing but my bet is 100 % on China now.
Any country that can put a fucking stinking perverted bath house trolling promiscuous faggot born of the Kenyan jungle monkeys, not once, but twice, and then even contemplate such a ducking rank corrupt evil bitch as that hitlery clitcunt is doomed.
The US is now nothing but a joke, a laughing stock for the world to with in amazement for its entertainment.
Its utter fuck up and incompetence in the Middle East, the way Putin effortlessly demolishes the fucking immature cunts risible plans in the State Dept, is absolute testament to that and the fact that every fucking thing they touch now turns to a heap of stinking rotting shit.
China Russia and Iran are stitching up a new order at record pace, a pace I would have never believed just 3 years ago, and the smarmy cunts in Brussels have proven beyond a shadow of a doubt their utter banality incompetence and corruption.
How the fuck such monumentally incompetent fuckers ever got this far is matter for historians to marvel and wonder over for a thousand years. As id how a that fucking rabid arse bandit monkey ever made it to where he can indelibly soil and filth the whitehouse.
Fuck you, I don't do what you tell me.
Sounds good, but your logic is flawed.
The NWO you are talking about isn't wanted, most of all by the populations of the very countries you speak of - which is why immigration from your countries are massive to ours - don't see long lines at those countries for immigration do you?
In order to justify a war there has to be two sides clearly opposed and that's becoming evident now. The USA will win the NWO order and not China nor Russia.
We've been planning this maneuver for decades while you think those countries came up with it.
The USA is in the number one spot and will remain there.
The money is on us - not China Russia Brazil etc or the other host of communist/ dictator countries your in love with.
If you are sick and tired of USA policy, wait for the world to be split in two and see what Russia and China unloads as "fair treatment" on the satellite nations.
You don't know what dictatorship really is - but you'll find out if your on that side. Millionaires and their funds are coming here , not there for good reason, perhaps you best follow the smart money.
Suck my fat american white dick damicol, you yellow slant eyed dog killing gook piece of shit. Fuck China and fuck you.
Rough, but communicates my thoughts 100%. Two thumbs up.
You dumb fat fuck, I am neither a fucking Chinese or even necessarily agree wih them.
But to compare the fucking faggot monkey with the Chinese in terms of ability or foresight or with either Putin or any Chinese leader in the last ten years is like comparing a fuckwitted brain damaged nonagenarian with syphilis to a chess grand-master.
Unless you are one of the dumb fucks that think voting for fucking faggot Kenyan monkeys make America great
Presidents are presidents. They don't run the country you idiot. Haven't you noticed?
What's the avatar of then? Your hot Asian lover boy? Or your pathetic Facebook "hope I can get laid" pic?
No matter how you look at it, damicol is right. When the SHTF what has the US and the other western Countries left? Not much of an Industry, except lots of financial fat Bankers that produce nothing but worthless fiat Money when China will still have all those Factories and dont forget their Gold Holdings. In the end they will come out smelling the cleanest and lots of big Words from the fucked up US will not make any differends.
GOOK
And by the way damicol it wasn't your Jesus like leaders that made China what it is today it was America . Outpr ideas our products and our money.
The agreement was we were going to get you out of the rice fields and you weren't going to go off on some crazy notion to rule the world or Asia.
But you broke the agreement.
And now your going down. You broke the agreement and if you think your economy, assets and military is up to ours then stop using scuffles in the Middle East as examples - no one since World War Two has seen what this military and industry is capable of.
Keep talking and you'll find out soon enough. Just one battle carrier group can wreak havoc and unlike a scuffle a war is a war and rules of engagement change and you'll see how fucking powerful this military monster is.
You have no idea. None.
These us navy boys with their huge arsenals and the us Air Force have been awaiting a chance to hear "fire at will and destroy" for decades.
You have absolutely no idea the power of this machine you're talking about.
I guess you voted for the fucking faggot monkey.
Twice ?
Horses for courses damicol. Each serves their purpose and I can tell you it is my absolute hope Hillary wins. Whatever you may think of her, she'll eat you alive and make George bush, Reagan and her husband bill look like pussies.
While you were whining about how much to pay for that cheap whore down the road, Hillary was out as Secretary of State lining up alliances around the world to put you and Putin back in their place.
She's a mean bitch. Make no mistake. She's got favors coming internationally, from inside her own party and across the isle.
And it's all for you, you little monkey.
Oh and Obama you refer to, say whatever you want but the relationship we have with you and Russia right now his doing, we were never friends and I guess he decided in his second term to let you know that.
Go back to your field, or send money to your aunt who is working in one. I need some cheap crap built and you're my man I can tell.
When you learn English? In a chat room?
Hillies a joke, no one treats her seriously, she's corrupt and incompetent and wwould make the US look like an even bigger laughing stock . Who was it that took that ridiculous reset button to Moscow ???
Youve been sucking obummers cock too much whilst snorting on coke you fuckwit.
I am not Chinese you fucking moron.
And the only thing your fucking hero clitcunt has coming is a good fucking kicking. Even fucking dogs move away from that bitch
>>She's a mean bitch
No she is a corrupt NeoCON bitch
$2B carrier vs. $200K ballistic shipkiller missile fired from anywhere in the Pacific. Care to make a wager?
Overusing curse words is almost as bad as overusing caps lock - while your points are interesting it's annoying to read and it sounds like a rant
Awesome rant @damicol...
We are screwed up badly, committing suicide by throwing the doors open to some pretty ugly cultures just to try and keep the ponzi going a little longer.
But what is the return you are expecting on all that investment made in ghost cities and the megaprojects that support them? That money was not imagined up, because to get the materials you had to get them from foreigners, they wanted real money. So it was borrowed, now the people you borrowed from want their money back, and some interest, but all you have to show for it is an extra requirement to maintain some unused buildings and infrastructure. That's a 100% loss on the investment, a 100% loss on interest, and the cherry on top is a ~1-2% additional cost each and every year to pay for the white elephants upkeep.
Add in the sand castles in the ocean and the other bold projects your leaders are engaged in and things are not healthy indeed, we will catch up with you no doubt in the race to the worst living conditions and the least liberty, although if you need some tips on how to commit cultural suicide you will have to call us, on that we are the masters.
This isn't rocket science. To repeat ad nauseum... the average "luxury" cement pad in China runs about $300K USD atm, average median wages are about $8K... that's annual. Say we're talking the "middle class" of the 100 million+, their median wages are around $12k. Do the math. Either wages go up tenfold... or those cement pads get a handsome haircut of around 90%. Which is more likely?
Londons not mucch different - average home price £400K, average non-family first timer starter home £200K, average annual salary £21K gross before tax - Cameron's worst nightmare. All the debate about tax credits here masks the real underlying problem - rents and mortgages are too high to live, and economically housing costs are soaking up money that should be invested in economic production
Looks like it will be a Yellow Swan and not a black one that will bring the financial world crashing.
One massive control fraud. China is fucked along with America.
Economists all over the world are empirical pond scum.
I guess all of the staggering growth in China over a mere generation gets a ho-hum, and somehow China is done for?
They own their own money via their state banks. China is rope-a-doping the west. I'm sure they are happy for people to think their debt position is danger-mouse.
Where are the debts lodged? Who do they pay? Does China have the ability to cancel said debts?
The biggest problem with China so far is that they are not taxing land rent. There are some cities now experimenting with taxation to keep property from bubbling.
Also, this idea of growth is a "debt money system" mindset, where usury demands growth via inexorable mathematics. China doesn't necessarily have to follow that model:
http://sputniknews.com/environment/20151027/1029169116/china-enter-era-e...
balanced than the almost blind focus on high growth industrial development of the past decade,
China is already looking down the road and planning their future. Notice how 'markets" and money are not doing the planning as in the West, but instead it is civilian political structures?
With regards to ghost cities, those were built with State Bank Money as seed capital. Money needs to be in supply to meet goods. Goods are lagging relative to money, and hence ghost cities were pump priming, without private debt. This concept is a little difficult: Goods cannot appear without money first, so spending in this way helps create demand ahead of goods production. In the U.S. the money model is different, so any cities built would leave behind a debt bomb. Continuing the bomb metaphor, the way China built her ghost cities is more akin to a war economy, where new money just appears as a line item budget without debt. China's state banks have that power, to create new credit and to partner with private banks if they so choose'; and if they do create credit with a debt counter, they can cancel said debts.
Private debts (private debts are worse than public) are occuring through another channel, and that is borrowing from private banks against land speculation, and to gamble in stock market. Public debts, if they are owed to yourself, and are housed on your own state bank, mean very little - they can be ignored. Owing debts to yourself is like your left pocket owing your right pocket. So, the tax roles pay the public debt, and the usury spins back out to reduce taxes. Public debts to a different economy is a different animal of a bad stripe. Don't ever let your debts be denominated in a foreign currency.
China will turn on internal consumption and development next, rather than rely on her export model. Already they are losing FX to keep Yuan pegged low to dollar.
The Chinese housing industry is different than America's. New homes in China are sold as an unfinished shell. It takes another 20% to finish. They have rough electric and plumbing and are plastered, but that is it. They are made of concrete and will not degrade even with years of sitting. It is tradition for the parents of the groom to give the newly-wed couple a home. These are often purchased years in advance. Many Chinese purchase homes as investments as an alternative to today’s 1% interest rates. These are all purchased with cash. When an outsider sees a new district with all those empty units, they automatically assume that real estate works the same as it does in their home country. They assume that the project is a failure because units are not selling, when sometimes they have all been sold for cash. The builder has paid back his loan and the entire project is solvent. According to research by Standard Chartered, typical occupancy rates for a new district in China during the initial phase (first five years of a development) are under 20 percent. They then increase to around 50 percent in the rapid growth phase (six to 10 years) and then to between 70 and 80 percent in the mature phase (11 to15 years). A large development like Ordos New City, built to house 500,000 at capacity, can be at 20% and have 100,000 people living there. That’s a lot of people, but to an outside reporter trying to write an article critical of China, they remain invisible. Also, the first article about “Ordos, the Ghost City” was written in 2010. Now, almost 6 years later, when the district is getting busier, people still refer to it as fact.
Thanks Roody - just for ducks I googled Ordos - first I read a recent articvle from Time magazine, mostly pictures of a 'deserted' city. Right.
Then, well, I thought - it's Time Magazine, MSM at its finest.
So I You Tubed Ordos.
Different story:
https://www.youtube.com/watch?v=tCUSTowpS_c
And this leads to other You Tube videos on Ordos.
Conclusion - it is slowly beginning to fill up.
Maybe those dumb fuck Chinese know something we don't..,
Like the old TV show - "The truth is out there".
I live in Thailand and travel Asia. Huge property bubble dude!
I live and own a home in China. We have 8 real estate offices within a block of us. I read Qfang.com and other websites to c heck prices. There is no "property bust" in China. It is being built and sold and occupied at a fast rate. All these people who write these articles probably have never been to China.
Steel industry huh?
You know how you reboot a steel industry?
It's quite simple ..
You suddenly have cause to manufacture 50,000+ MILES of rail. If that is not a shot in the arm to an ailing economy, I do not known what else is. That in conjunction with eliminating the national debt and trade deficits in 3 BANKING DAYS. Not to mention the dissolving of the Federal Reserve System and IRS in the same year ..
http://www.veteranstoday.com/2014/01/05/the-wanta-reconstructing-america... [1]
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)
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[1] Since the parent article is concerning China, notice all the references to China. Think that a coincidence?
Again I will leave this here.....
http://goo.gl/Zm9wVj
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When ancillary industries are taken into account, real estate construction makes up about a quarter of China’s $10tn economy, a higher proportion than the US, Ireland or Spain at the height of their property bubbles last decade. Nearly a decade of frantic building has created massive overcapacity and left vast belts of empty apartment blocks ringing most Chinese cities.
Last year, the gravity-defying rises of the previous decade, which have seen prices quadruple in major cities, finally came to a halt. Average nationwide housing prices were down 4.3 per cent in December from 12 months earlier.
But total investment in the sector still increased 10.5 per cent for the year and unsold floor space was up by more than 26 per cent by the end of December, according to official figures.
The data suggests the correction in China’s real estate sector has not even really begun.
I don't understand why you say more than half of companies are pretty much insolvent but the list you provide of companies that will surely default is so small.
.
So, hugely mis-allocated capital. Got it. But at least the Chinks have SOMETHING to show for it - apartments, infrastructure, malls, that SOMEDAY could be put to use by the masses. What've we got? Nothing, nada, diddly squat, except some yachts, airplanes and fattened personal accounts skimmed from the muppet masses to the benefit of the .01%. Think Robespierre.........
I beg to differ over wether they have anything to show for such spending.
Most the apts and other units are unfinished on the inside and as the weather and time takes its toll they are quickly slipping into ruin.
It's hard to sell a $100,000 condo to someone who makes $.17 a day. China's answer? Build sand castles in the ocean. Good one guys.
Ever see a Chinese restaurant go out of business? 'Nuff said.... America is a wastrel and the laughingstock of the educated and civilized world...Further proof - NeoClown dumbfucks like Cheney and Wolfowitz high-jacked our military and spent trillions of dollars with nothing to show except monumental death and destruction. Who are the dumbfucks? Riddle me that...
"As we reported a month ago, at current commodity prices, over half the debtors in China's commodity space are generating so little cash, they can't even cover their interest payment."
HOLY SHIT!!!!
Now I can feel the tsunami of debt, here, on the other side of the world.
Can't pay interest? Just take out another loan! Works for long enough for the execs to pile up a couple of billion in stolen money and run away, to Australia, US, Canada, England, France...
It is becoming clear China is in a situation similar to what America faced in 1929 following a period of rapid growth and credit expansion. To say the economy of China is shaky understates the situation. The kind of growth we have witnessed in China during the last several decades has been extraordinary and was driven by several "one time factors" that have be played out.
To those who doubt just how massive the problems are they only need look to the newly constructed city of Ordos in Inner Mongolia. Most of the new town buildings are empty or unfinished. This was noted a few years ago, but the situation has grown more dire. Below is the latest in a series of articles concerning China's deteriorating economic situation.
http://brucewilds.blogspot.com/2015/09/china-economic-update.html
This is going exactly as planned per the Book of Revelation. Something has to get everyone to a one world governmental system and it's not going to be a kumbyah world peace movement. It's going to be the crashing of economies across the globe from the current debt fueled expansion in which the only way to achieve peace and safety is to combine things under a single entity to rule. There will also be a one world religion but this is not going to be everyone turn Muslim it'll be an acceptance of all faiths since each one is just a perspective of the same Creator.
Say what you will about a book written almost 2000 years ago but its prescience is frigtheningly accurate.