In 2000, China had $1 trillion of credit market debt outstanding – a figure which has now soared to $25 trillion. No economic system can remain stable and sustainable after undergoing a 25X debt expansion in only 14 years.
China’s moves “discourage” Japanese corporations from doing business there, said the Japanese government on Monday. That’s exactly what has been happening for months. In a most dramatic way, and where it hurts China the most.
The word dollar didn’t even come up when the Bundesbank signed the agreement with the People’s Bank of China. President Xi Jinping and Chancellor Angela Merkel looked on. It was serious business. Everyone knew what this was about. No one had to say it.
China’s enormous, strenuously obfuscated credit bubble has led to flagrant misallocation of capital and spectacular malinvestments eternalized in vast ghost cities. That this will end is clear. How it will, is not. But here is a hold-your-breath version (1-min video).
The air in China can get so bad that the whole world talks about it. Though the government is taking the issue seriously and is doing a million things to get the fiasco under control, it remains unclear what exactly people will breathe ten years from now.
Central banks rule! We’ve seen it in 2013. They’ve accomplished the impossible: separating stock markets from the economies they’re based on. But in 2014, the US and China are trying to unwind these crazy policies – without taking down the entire global economy.
In the US and Europe, 95% of the buyers are male. Average age is 55. What’s different in China?
By Joao Peixe of Oilprice.com: The deal between Rosneft and China National Petroleum Corp to jointly develop a giant oilfield in Siberia may be tainted. I’m not talking about corruption or illegal activities, but rather the potential that the oil and gas in the field may be contaminated with radioactive materials from nuclear explosions.
BYD, the name of a Chinese electric vehicle and solar panel maker, stands for “Build Your Dream.” Maybe that’s what they’re trying to do in China. But here, they’re building a nightmare: broken promises, falsehoods, design flaws… all lushly funded by American taxpayers. And they paid Chinese workers in California $1.50 per hour to do it.
By Dave Forest, OilPrice.com: One of the most critical changes in global energy flows we’ve seen for years happened this week.