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China could be an economic time bomb sitting on Thailand’s doorstep as Evergrande collapse nears


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1 minute ago, nobodysfriend said:

Well , anyway , the good news is that one can have a drink again ...

Yes, people can get a glass of wine with their meal in Thailand now..... pass the party pipes round.

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1 hour ago, HappyExpat57 said:

This warning has been repeated for years, documentaries supporting it have been filmed as their "ghost cities" have been growing like a cancer. It really is just a matter of when the bomb will go off.

To add to your post:

A tidbit of information for a better comparison 

 

https://fortune.com/2021/12/02/chinese-real-estate-investing-home-ownership-evergrande/

China stores 70% of its wealth in real estate. Now, the property crisis is forcing investors to reconsider their favorite means of savings

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They will have to sell the Spratlys and ask for there monies back for the belt and rail/road investments, only last week i read China will soon start seeking payback from many countries, Xi, what goes round comes round.

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3 minutes ago, Walker88 said:

If the Chinese property bubble bursts, the implications rival that of Covid.

 

The CCP, a self-appointed government answerable to no one, has tried to build legitimacy via economic growth. A billion three hundred million folks were dangled the carrot of wealth, and that made them favorably disposed (somewhat) toward the corrupt, self-appointed, self-serving leadership.

 

EVERYTHING is tied to property, and that includes the bank deposits of the 1.3 billion. A wave of property bankruptcies will lead to the evaporation of all of those bank deposits, given the way banking works with money creation that dwarfs even spendthrift governments like the US. When reserve requirements are what they are, a single yuan of bank deposit can become seven yuan with many different people claiming ownership of the same yuan.

 

Dash the expectations of a billion plus folks, and it is conceivable the Cultural Revolution will look like a frat party in comparison.

 

The world would not escape unscathed. First Chinese investment (such as in Thai property or the Road and Belt Initiative) would dry up. Next, a good deal of the world's manufacturing relies on a supply chain that often begins in China (e.g., Apple). Third, China still owns a few trillion dollars of US debt. Dump that and either US rates rise considerably, or else the US decides to default by CUSIP, choosing to not honor bonds held by China. Neither is pretty.

 

Overall world rates could go either way. I can make an argument there would be a 'flight to safety', driving rates down. Just as easily one could make an argument rates will soar, and NO COUNTRY can survive if rates merely return to the historical norm. Since 2008 rates have been close to zero, which has given govts the ability to fund themselves. Consider the US, now with $27 trillion in debt. If the Yield Curve shifted to its historical norm, which is about 500-600 basis points higher, the yearly deficit would add an additional  few $trillion as existing debt matures and was rolled over. (+270 billion for each 1% jump in the Yield Curve).

 

The entire financial system of the world is based on suspended disbelief....and that includes cybercurrency. We all know inherently that what we consider money is just a confidence game where at least one party to a transaction has to believe in fiat or cyber or whatever folks decide is a means of exchange, though all has in inherent value of zero.

 

China gave the world the all purpose curse: "May you live in interesting times". They may show us what that means (which they have already done by giving the world Covid-19). Things could get interesting-er.

Good post thankyou

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