China's Banks Are Getting Ready For A Debt Implosion

a reply to: stormcell

Exactly. We inadvertently (advertently?) destroyed their economy and China is rowing in the same direction.

There just is not enough for them to do to spread out the artificially inflated economy let alone one that was more stable such as Japan's.

So if China's economy collapses, what would this do to wal-mart? they must be the number 1 buyer of Chinese plastic products.

Our Mfg base was sold out to China, if their economy collapses will it mean they have to close down the factories?

I am being a bit sarcastic but in a serious way. I don't know much about my own finances let alone global...

a reply to: tinner07

No, for a few months we in the West, Not just the US would be flooded with everything they have at rock bottom prices, although exciting at first it's not really a good thing for them or ourselves.

Once that's done then something like global stagflation. Stagnant economies and massive inflation.

a reply to: SLAYER69

rock bottom prices right in time for black friday and Christmas.

originally posted by: SLAYER69
a reply to: tinner07

No, for a few months we in the West, Not just the US would be flooded with everything they have at rock bottom prices, although exciting at first it's not really a good thing for them or ourselves.

Once that's done then something like global stagflation. Stagnant economies and massive inflation.

Not iPhones. Samsung would def go under though.

a reply to: nukedog

Samsung is Korean.

They would be hurt but I doubt them being destroyed.

originally posted by: Timely
a reply to: nukedog

Samsung is Korean.

They would be hurt but I doubt them being destroyed.

Well they are already on the rocks trying to compete with cheaper cell phones so... Idk. Just thinking out loud. I wonder how it would impact apple though. I think they value the phone based on fiat lol

China and Germany demanded their gold back and U.S.A said that they don't have it anymore. I wonder how this will end. I guess they will have to take out the golden pen and write it all off to ZERO DEBT. So now what? We don't have it. Good luck with that one.

originally posted by: SLAYER69
a reply to: ThichHeaded

Even if China were able to triple it's known Gold reserve that would put them in third place, ahead of the IMF but behind Germany. If they were able to somehow quadruple their reserve that would put them just a hair ahead of Germany and be in second which would still be at about half of the US.

You're assuming then the U.S physically has all that gold........Sorry other peoples gold.....

originally posted by: AugustusMasonicus
a reply to: stormcell

Exactly. We inadvertently (advertently?) destroyed their economy and China is rowing in the same direction.

There just is not enough for them to do to spread out the artificially inflated economy let alone one that was more stable such as Japan's.

We didn't do anything - the Japanese shareholders wanted their corporations to make as much money as possible. Corporations did what they were told to do - they looked for areas to make money, had huge research departments to help do this (eg. blue LED's). One breakthrough could make a corporation hundreds of millions in patent and license fees.
And the whole country just rolled onwards as one giant money making machine.

Same in China. Every Chinese person wants to get an education and set up their own company and make money in whatever way possible. Even if you have 300 million Chinese just bringing in $1000 each through exports, that's trillions.

In both cases, they just don't know where to invest all that money. The Chinese ending up building ghost cities, buying foreign property, helping develop Africa.

a reply to: stormcell

The point I wad trying to convey is that the Japanese, like the Chinese now, are unable to effectively invest their proceeds. Unlike the Japanese the Chinese have been artificially inflating their revenue numbers and have been forced to build the ghost cities you mentioned among other fruitless endeavors. They will be unable to sustain this charade and their economy necessarily will have to contract.

originally posted by: AugustusMasonicus

This is all very similar to what Japan did 25 years ago with trying to spread its debt risk into real estate and other investments.

They still have not recovered.

It was a bubble, they tried to hedge against it popping, but it was pointless anyway.

To say it never "recovered" is only to say the Japanese economic bubble has never reached that level of overvaluation since. That's actually a good thing. Some people come to expect these fantastical high's like they are the result of hard work and good decisions, no, they are just unrealistic highs created by irresponsible speculation, and an elite few benefit from these crashes.

Recovery would be hitting a reasonable median again, which Japan had achieved by the early 2000's and has been pretty strong since, aside from the issues Fukushima created.

so... who DOES have the gold?

India?
Middle East perhaps?

originally posted by: tinner07
So if China's economy collapses, what would this do to wal-mart? they must be the number 1 buyer of Chinese plastic products.

Our Mfg base was sold out to China, if their economy collapses will it mean they have to close down the factories?

I am being a bit sarcastic but in a serious way. I don't know much about my own finances let alone global...

They would liquidate stock and sell to whoever would buy (likely the US) at low prices as they seek to cover debts. After that the manufacturing would move elsewhere. Multinationals are in China because the labor is cheap but they can just as easily go elsewhere, many have already gone to India actually. This loss of manufacturing is something the Chinese have been facing for a couple of years now. India has even lower standards and lower wages so the corporations have been going there.

In short, not much would change.

originally posted by: qmantoo
so... who DOES have the gold?

India?
Middle East perhaps?

I would put good money on that gold still being in the country. I just don't believe it's under US control anymore. Here's a theory for you: In order to fuel the economy after removing ourselves from the gold standard we sold that gold to the banks. The government would get money in exchange for the gold while the banks would have a solid asset to leverage against in order to sell more loans. This asset backing allowed them through the 70's, 80's, 90's, and 00's to leverage greater and greater amounts of money because they were still backed by something that wasn't fiat. When the banks collapsed in 2008, in order to keep their possession of the gold secret we bailed them out and kept them in business.

So the short answer to your question: Goldman Sachs.

originally posted by: ThichHeaded
Ya I dont see a country thats been around for thousands of yrs and would trade in gold only have very little of it..

They aren't stupid.. They own most of the US and we willingly give them money freely.. Just saying..

What 51% of the US do they own? Just curious.

originally posted by: 8675309jenny
It was a bubble, they tried to hedge against it popping, but it was pointless anyway.
To say it never "recovered" is only to say the Japanese economic bubble has never reached that level of overvaluation since. That's actually a good thing. Some people come to expect these fantastical high's like they are the result of hard work and good decisions, no, they are just unrealistic highs created by irresponsible speculation, and an elite few benefit from these crashes.
Recovery would be hitting a reasonable median again, which Japan had achieved by the early 2000's and has been pretty strong since, aside from the issues Fukushima created.

The Japanese debt to GDP ratio has been obscenely high for decades. They also saw the Nikkei and Tokyo Exchanges both dip below their post bubble lows in 2003 as investments were directed out of the country. This also acted to lower corporate competitive advantages as many companies lost their technological edge due to the out flux of capital. Corporations had large debt to asset ratios which still continue to this day.

If the Japanese had fully recovered from the Lost Decade they would not have been instituting fiscal polices two years ago that would remedy the lingering effects:

More than 25 years after the initial market crash, Japan is still feeling the effects of Lost Decade. However, several Japanese policymaker have attempted reforms to address the malaise in the Japanese economy. Recently, after Shinzo Abe was elected as Japanese prime minister in December 2012, Abe introduced a reform program known as Abenomics which addresses many of the issues raised by Japan's Lost Decade. His "three arrows" of reform intend to address Japan's chronically low inflation, decreasing worker productivity relative to other developed nations, and demographic issues raised by an aging population.[29] Investor response to the announced reform has been strong, and the Nikkei 225 has rallied to 16,000 from a low of around 9,000 in 2008. Abenomics seems to be taking its effect as initial economic indicators return to healthy levels — inflation is expected to meet the 2% target rate as set by the Bank of Japan. Source

originally posted by: ThichHeaded
They aren't stupid.. They own most of the US and we willingly give them money freely.. Just saying..

United States citizens own the vast amount of our own debt which is far, far worse then having someone else own it. You cannot default on yourself. China owns very little of our debt in relation.