Panic? China Is Hoarding Cash At The Fastest Pace Since Lehman

Tyler Durden's picture

The last few months have seen trillions of dollars of fresh credit puked into existence in China to enable goal-seeked growth numbers to creep lower (as opposed to utterly collapse). The problem is... the Chinese are hoarding that cash at the fastest pace since Lehman as liquidity concerns flood through the nation.

China’s M2, a broad gauge of money supply including savings deposits, rose at the slowest pace in 15 months and trailed the government’s full-year target of +11% in July. But, as Bloomberg details, by contrast, M1, the total of cash, checks and demand deposits, rose at the quickest pace in six years...

That shows companies "are holding all this cash, but investment returns are low and there are few options for projects," said Liu Dongliang, a senior analyst at China Merchants Bank Co. in Shenzhen.

In fact, no matter what has been done since the Chinese stock market crashed, the Chinese have been hoarding cash...


In fact, the hoarding of cash in China corresponded with the top in 1999/2000, and the top in 2007...


"probably nothing"

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HedgeAccordingly's picture

Leveraged fund managers increased their long EM exposure to 4.75billion or 900m over July.

roddy6667's picture

That's not a lot of people. In China, only 18% of homes have mortgages. This article is about people who are buying a second home with borrowed money needing 50% down. Most people pay cash.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Aug 14, 2016 8:39 PM

They need to save their USDs to buy up all the US Real Estate

sun tzu's picture

I don't blame them. Trade in the toilet paper for hard assets while it's still worth more than toilet paper. 

LetThemEatRand's picture

Hoarding cash is usually a precurser to hoarding PM's.  At least since Lehman.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) LetThemEatRand Aug 14, 2016 9:08 PM

Hoarding PMs is usually a precurser to being dragged through the streets by CIA/Soros funded mobs.  At least since Lehman...

RagnarDanneskjold's picture

The banks only want to lend to government projects amid business collapse

I recently had a chat with the president of a grassroots bank, they saw the collapse of a large number of small and medium enterprises, manufacturing enterprises reluctant to borrow, demand is very weak, very worried about the outbreak of bad loans, now the only source of relief is government projects, the platform loans, he said that because in his 30 years of lending experience, the government loans never go bad, at worst they are extended, so we are all seeking to lend to government projects, and this is the reason the lending platforms have too much money, also a reason for the jump in M1.  

As such bank lending actually contracted once mortgges are backed out.

jamesmmu's picture

When will investors start pricing in reality? They only price in QE and more QE. In some point they should worry about QE not boosting the economy. WTF

Kido's picture

Look at the markets going up yet again, just keep buying and ignore all these 

Ajax_USB_Port_Repair_Service_'s picture

They've stopped hoarding bitcoin? They're learning.

roddy6667's picture

An acquaintance of mine just lost 36% in that exchange that got hacked. They did a bail-in to cover the losses. Bitcoin doesn't seem to be the answer it claims to be.

. . . _ _ _ . . .'s picture

Doesn't cash hoarding artificially and temporarily increase it's value?

"Leave the South China Sea or we sell... cheap."

jamesmmu's picture

this is another bullish news + japan gdp miss = more QE and more QE, longer low rates = bull market 

trollster's picture
trollster (not verified) Aug 14, 2016 9:22 PM

24357653rd false alarm since Lehman

Mustafa Kemal's picture

But that 2733333rd one is  a doozy.

Omega_Man's picture

fuck cash hoard gold