China’s $11 trillion government bond market has moved into uncharted territory.
As their government rolls out widespread stimulus, yields are hitting record lows.
The gap between yields in Japan and China are now at a record low of just ~70 basis points.
China is in trouble. pic.twitter.com/j1vrmW6Hxe
— The Kobeissi Letter (@KobeissiLetter) December 28, 2024
Multiple indicators show a general slowdown of China's economy contributing to these moves.
Increases in both industrial production and consumption have slowed significantly.
In fact, retail sales growth is now at ~2% and on track to hit the lowest since the pandemic. pic.twitter.com/QcmzqYUFJ2
— The Kobeissi Letter (@KobeissiLetter) December 28, 2024
Simultaneously, China's central bank is buying gold like never before.
China's gold holdings rose to 72.96 million fine troy ounces at the end of November.
They now hold $193 BILLION worth of gold in reserves and continue to buy even as gold prices hit record highs. pic.twitter.com/s5bnKTZaRg
— The Kobeissi Letter (@KobeissiLetter) December 28, 2024