A default cycle has started, but market doesn’t see it yet. https://t.co/fI4VTaArqo
— Samantha LaDuc (@SamanthaLaDuc) August 28, 2023
The last pump before the coordinated rug pull. https://t.co/WQKCi7fW3U
— Financelot (@FinanceLancelot) August 28, 2023
China’s Debt Problm Could Trigger a Financial Crisis, Analyst Says
China’s Worsening Economic Slowdown Is Rippling Across the Globe
Policymakers are bracing for a hit to their economies as China’s imports of everything from construction materials to electronics slide. Caterpillar Inc. says Chinese demand for machines used on building sites is worse than previously thought. U.S. President Joe Biden called the economic problems a “ticking time bomb.”
Global investors have already pulled more than $10 billion from China’s stock markets, with most of the selling in blue chips. Goldman Sachs Group Inc. and Morgan Stanley have cut their targets for Chinese equities, with the former also warning of spillover risks to the rest of the region.
Asian economies are taking the biggest hit to their trade so far, along with countries in Africa. Japan reported its first drop in exports in more than two years in July after China cut back on purchases of cars and chips. Central bankers from South Korea and Thailand last week cited China’s weak recovery for downgrades to their growth forecasts.
This is why #Chinese #Liquidity is so important… comovement between #PBoC injections and World #GDP Nowcast (+3 months) pic.twitter.com/N7wbPicmBR
— CrossBorder Capital/ GLIndexes (@crossbordercap) August 28, 2023
The change in global capital flows is seismic. For the past decade, China (red) attracted the bulk of capital flows to EM, often at the expense of other BRICS. But China has now seen consistent and large outflows for the past 18 months, as investors grow wary of autocracies… pic.twitter.com/tAgfRnZTfZ
— Robin Brooks (@robin_j_brooks) August 27, 2023
Warning: This is the tightest monetary policy seen in the US since the 1980s pic.twitter.com/xSAB1mOs5V
— Bravos Research (@bravosresearch) August 27, 2023
Cost of Living Crisis Crushes Post-Covid Rebound – A Global Recession Looms
The global economy is teetering on the brink. The eurozone’s PMI is contracting for the third consecutive month, signalling deeper troubles ahead. Citi economists are raising alarms, stating the US may need to confront a severe recession to combat spiraling inflation. TS Lombard anticipates an imminent worldwide recession, with particular concerns about China and Europe, while the US seems on a collision course with an economic downturn due to escalating interest rates. Investment giants like Nomura forecast dire economic outcomes not just for the US and Japan, but also for major players like the UK and the eurozone. The sudden spike in interest rates worldwide threatens to destabilize an economy that has grown reliant on lower rates.
It is the least affordable to buy car, house, food ever