Systemic Fragility In The Global Economy

Author : Axel Rey
Publisher :
ISBN 13 : 9781692683238
Total Pages : 88 pages
Book Rating : 4.6/5 (832 download)

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Download or read book The China Sinkhole written by Axel Rey and published by . This book was released on 2019-09-12 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: How will China's economic fallout impact on your Money? For the consecutive two years of 2017-18, total interest costs in servicing China's gargantuan debt loads had much more than wiped out the entire gains from GDP growth. 1 in every 6 bucks created as the nation's output now needs to be expensed as the interest cost, to carry the nation's debt load. Worse yet, China's debts are now growing at a pace that's twice to the average rate of increase in debt worldwide. Interest expenses required to service all the piles of debts in 2018 amount to 16% of China's GDP. Is your financial future undermined by misleading information from Wall Street and some mainstream media? Quite likely, a substantial portion of your stocks, mutual funds or 401-K are with investments linked to China's economy one way or the other. With the on-going US-China trade war, we now live in a recalibrated global economy. Will the China debt sinkhole transduces into your money's sinkhole? This book helps to answer the above question by illustrating how China's ever-intensifying debt-driven growth model for the last decade has the entire world fooled. It makes available to the English-speaking world unreported prognosis from China's top-echelon high-finance sphere insiders, much of these were made available to the English-speaking world for the first time.. For instance, with the China model, the creation of one trillion GDP requires the incurring of 6 trillion debt. If we apply the accrual principle in management accounting to China's GDP measurement, then China's GDP growth rates for both of the two years of 2017 and 2018 need to be construed as negative. This gauge, is what Wall Street money managers and mainstream media will not want to tell you about, for reasons relating to their own vested interests. Rating agency S&P assessed in September 2019 that, should the US-China trade war go on escalating, China's GDP growth rate could in a worst scenario decrease to 3.7% (from the 6.1% of 2018) in the next 10 years. This book substantiates a view among some economists that China's economy is "not too big to fail, but too big to save". It features numerous crucial facts previously unreported in the English-speaking world, among others: China now carries a foreign debt of about US$ 2 Trillion. The no-frill value is only a fraction of the apparent book value of US$ 3 trillion that Beijing wants to show you. Levin Y. Zhu, a former CEO to China International Capital Corporation had in 2018 estimated that the accrual total debt currently in China is, in reality, much larger than the official figure of 300% of GDP, as colossal amounts of debts, carried in the shadow banking industry is not being included in the pile. "No one knows who owes what to whom or how much, only when it starts to go bankrupt will things start falling apart." Peter Pauly, an economics professor at the University of Toronto's Rotman School of Management, commenting in an April 2018 CNBC report, regarding China's shadow banking industry.