The China thing is confounding. The last time China caught a cold (the 1997 “Asian Flu”) the world also got the sniffles, it’s hard to see how this wouldn’t be considerably worse this time.
Despite assurances to the contrary (“It’s minor”) it’s unclear how much direct U.S. / European banking /investment exposure there is to the impending China real estate collapse.
And, as noted above, the globalization of the world economy is such that even without direct exposure there’s clearly indirect consequences of a significant hiccup to the Chinese economy, both globally *and* within China.
With the individual Chinese so counting on real estate as a means of storing and creating wealth a collapse of that sector will have far-reaching consequences.
Graham, could China afford just to write the whole thing off? A trillion here, a trillion there, sooner or later you’re talking real money. Their National Debt currently stands at 45% of GDP, considerably lower than the U.S.
Thanks Graham as always top notch
I have been covering China's problems in my weekly links: https://emergingmarketskeptic.substack.com/p/emerging-markets-week-august-22-2022
NOTE: "Friendshoring" away from China and deglobalization is also inherently inflationary...
nice analysis
Concise & informative
The China thing is confounding. The last time China caught a cold (the 1997 “Asian Flu”) the world also got the sniffles, it’s hard to see how this wouldn’t be considerably worse this time.
Despite assurances to the contrary (“It’s minor”) it’s unclear how much direct U.S. / European banking /investment exposure there is to the impending China real estate collapse.
And, as noted above, the globalization of the world economy is such that even without direct exposure there’s clearly indirect consequences of a significant hiccup to the Chinese economy, both globally *and* within China.
With the individual Chinese so counting on real estate as a means of storing and creating wealth a collapse of that sector will have far-reaching consequences.
Graham, could China afford just to write the whole thing off? A trillion here, a trillion there, sooner or later you’re talking real money. Their National Debt currently stands at 45% of GDP, considerably lower than the U.S.