Segment 1: Life Insurance, Wills, and Trusts SEGMENT BEGINS AT 00:38 Are you prepared for life’s major uncertainties? Nobody plans to fail. They just fail to plan. In this segment, Jerry Robinson wraps up our ongoing discussion of Level Two of our Five Levels of...
CHINA’S $24 TRILLION DEBT BUBBLE
Leading Chinese Securities Firm Warns of Growing Default Risk as China’s Debt Soars
- China’s Second Largest Securities Firm Issues Latest Warning. Haitong Securities, China’s second largest brokerage, is warning investors that China’s soaring debt levels threaten to trigger a new financial crisis. According to the latest estimates, liabilities held by China’s non-financial firms may exceed 150% of GDP in 2014. “We are concerned that the debt snowball may get bigger and bigger and turn into a crisis,” said Li Ning, a bond analyst at Haitong Securities. “Default probabilities from next year may rise because more and more Chinese companies depend on new borrowings to repay old debt.”
- China’s $24 Trillion Debt Bubble. By now, many investors know that since 2008, credit in China has exploded by $15.4 trillion, from $9 trillion to an astounding figure of $24 trillion — as much as the U.S. and Japanese banking systems combined. (In comparison, total U.S. bank assets grew by just $2.2 trillion during this same time period!) China’s monetary authorities are now attempting to rein in the world’s biggest credit bubble, which remains extremely vulnerable to higher borrowing costs. The astounding growth in Chinese credit in recent years is unprecedented, and easily qualifies as the largest bubble in world history. Over the past five years, credit growth in China has grown by nearly 30% annually, far outpacing China’s 8% +/- annual GDP figures. To put this in perspective, China’s rate of credit growth is far greater than that which preceded the bursting of Japan’s property bubble in 1990, South Korea’s 1998 crisis, and even the more recent explosion of subprime credit in the U.S. In classic style, China has attempted to manage perceptions by banning journalists from reporting on this $24 trillion debt bubble, which has become a ticking time bomb as local interest rates begin to skyrocket. Meanwhile, hot money continues to flow out of China. Record amounts of wealthy Chinese investors are moving money out of the country into foreign asset classes (U.S. and European real estate, precious metals, etc.) What’s next? Perhaps a meaningful increase in oversight, or even a TARP-style bailout. But it is virtually impossible that China, and the world economy, will escape this monetary madness unscathed. It’s time to prepare.
Inside this Issue
“Profiting From the Coming Paper Money Collapse”
As “official” U.S. unemployment rate drops to 6.7%, the labor force participation rate dips to 62.8% — it’s lowest level since 1978.
Mortgage bankers forecast that loan originations, hurt by higher rates, will fall to a 14-year low in 2014.
Shipments of desktop and laptop computers have never fallen so dramatically as more consumers, even in emerging nations, prefer tablets and smartphones.
China’s annual trade in goods passed the $4trn (£2.4trn) mark for the first time in 2013, official data has revealed, confirming its position as the world’s biggest trading nation.
U.S. Financial Markets
Real-time Gold and Silver Prices
Precious Metals Market Update with Tom Cloud
“World News Headlines That We Are Tracking”
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First Syria, now North Korea…
Amazing images of America’s recent Arctic blast.
The Defense Ministry wants to conceal the full list to avoid a public debate over the morality of selling arms to dictatorial regimes.
On May 15th, 1948, the modern nation of Israel officially became a sovereign territory belonging to the Jewish people.
The research comes just after it was revealed that people who have a spiritual side have a ‘thicker’ section of brain tissue than those who do not, possibly helping them stave off depression.
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