/biz/ - Business & Finance

>>15230519
I suppose we will see.
But my bet is that it's China that won't do shit.

US really doesn't need to do much to strangle China.
China has ~320% of GDP debt in their economy and need around 9% GDP growth just to keep up with interest.

Private debt shouldn't be a problem. bit a giant chunk of that is in SOEs, make-work jobs and the mother of all housing bubbles.
Which means that once banks start going bust China has to bail them out.
They will print more yuan and the wealth of the average chinaman will evaporate.

While the devaluation may help with exports, imports will be a problem.
The things china imports, it can't make.
Food, Energy, Raw materials.

This combination means that the life of an average chinaman is going to drop like a rock..

It might even get so bad that they start thinking that the emperor needs to go..

>>15138418
Nah brah.. Wrong country..
That will be China..

Their economy has 300% GDP as debt.
Assuming an interest of 3% then they HAVE TO have GDP growth of 9% just to keep up with the debt..

The 6.5% growth the currently have is already making their banks go bust and the CCP will keep bailing out banks just like they did Bank of Jinzhou and Baoshang.

The yuan will get devalued in the process and will drop like a rock in the coming years.

US government on the other hand can't devalue the dollar even if it fucking wants to. There is like 10 trillion in dollar-denominated debt outside the US that will eat up any devaluation they manage to get out of the federal reserve...

Guys..
Help me figure this out..

According to Bloomberg, China's overall economy is ~300% of GDP in debt.
If we assume average interest of 3% on that debt, we get 9% of GDP in interest payments.
If GDP growth is 6.5% doesn't that mean that China's economy HAS to take 2.5% of GDP in more debt to cover the interest?

So is China completely fucked unless it maintains a growth above 9%?