Exposure To China Is Risky As Fuck

[Anonymous No.13740353]

Here’s why (and no, it’s not Trump’s trade war, though such is a related component)....

China claims to have an economy that represents 15% of global GDP despite not even making up 1% of cross-border currency settlement: we take them at their word for domestic RNB based economy converted at a rate they stipulate is the rate.

Yes, China runs the Printing Press, the police, the narrative and the price of goods (aside from real estate). They control their own economy domestically, but what they can’t control is their dollar reserves.

That’s right, China is desperately short US dollars, dollars they require in order to interface with the global economy.

This is why Chinese companies primarily list in Hong Kong; in order to raise money (mostly dollars) in Hong Kong, Europe & the US through equity and bond offerings: when American pensions and endowments invest in China, they send the money to Hong Kong because HK has a free trade agreement with the US per the US Hong Kong Policy Act of 1992 requiring HK to maintain an autonomy in their economy, judicial system and government...though such is increasingly not the case.

Now here’s the problem: Hong Kong’s banks are 900% of it’s GDP and their household leverage is 300% of GDP. They’re the most levered developed country in the world and they’re running out of their reserves, spending 86% of it defending the 36 year old currency peg thats likely to drop in value because their economy is more integrated with China’s than it is with the US economy.

Bottom Line: This antiquated HK Dollar pegging has created a pressure cooker poised to go off, the ultimate outcome being a revaluation of all SE Asian currencies to the down side, including the RNB and HKD.

[Anonymous No.13740367]

>CTRL-F "Matic"
Hmm

[Anonymous No.13740370]

>>13740353
Correction: All the above factors including the antiquated currency peg are what makes exposure to Asia so risky

[Anonymous No.13740377]

don't you mean RMB you fag

[Anonymous No.13740412]

>>13740377
Yes and checked.

>damn it....
>OP = pic related

[Anonymous No.13741508]

>>13740353
bump for interest

[Anonymous No.13741572]

>>13741508
few anons appreciate whats happening with the Chinese economy.

Its a bubble that will impact the rest of Asia because of what going on with Hong Kong.

[Anonymous No.13741631]

>>13741572
Any info on how the ripple will effect other global markets?
Will this cause a dollar surge, or will stocks plummet due to so much being connected to Chinese companies?

[Anonymous No.13741662]

>>13740353
One of the few non-shit thread on /biz/ and barely any replies, fucking kek

so how long do you think they have until the bubble pops?

[Anonymous No.13741683]

>>13741662
we need to split off biz into just /biz and /crypto
i miss comfy frugal threads, interview tips, resume help, kneepads, etc

[Anonymous No.13741686]

Thanks OP.
China is going back to their classic warlord/cannibalism mode.

[Anonymous No.13741717]

>>13740353
I've also heard China has horded lots of gold. Are they trying to shift the petrodollar as the reserve currency to the RMB (which would then be gold backed)

[Anonymous No.13741762]

>>13740353
Very interesting, id like to hear more about the problems of the chinese economy? also id like some souces on the hong kong figures if you dont mind

[Anonymous No.13741818]

>>13740353
Do you think Hong Kong's economy could implode because of the China extradition law being passed and the disqualification of pro Democracy lawmakers that is probably going to continue indefinately? Do you think the US looks poised to revoke the Hong Kong Policy Act of 1992? What did you mean by they spend 82 percent of their reserves to maintain the peg to USD and why is it bad that bank and household wealth is so high?

[Anonymous No.13741850]

Also too: is this why so many chinks are grossly overpaying for property in other country's cities- as stores of values for when their RMB goes to shit?

[Anonymous No.13741935]

>>13741850
A lot of this is they are filthy rich from corruption and willing to pay extortion prices for a store of value/somewhere to flee too if Xi ever moves on them for not being loyal enough to the party

[Anonymous No.13741965]

>>13741631

China is so big that it will likely be felt around the world. I don't see the dollar surging but losing less in the correction

[Anonymous No.13742022]

>>13741850
I would also assume it's due to the fact that it's fairly difficult to get a decent rate of return on any domestic assets actually in China. China's banking sector is a horrible mess that the government is constantly fucking around with. Combine that with the high amount of fiscal stimulus (which lowers interest rates) as well as the already-high savings rate of most chinese citizen means that if you want to make real money you've got to look outside of the country.

So, the easiest thing to do for any moderately-wealthy chinaman is to buy up property in foreign countries. Another side benefit is that those foreign properties are a great place to jump ship to if the country ever goes to shit.

[Anonymous No.13742052]

>>13740353
>>13740353
How much of the current hot real estate markets are fueled by cali/NE locusts fleeing their overpriced libiral shitholes?

Who's buying? Its chinese trying to hide their money in safe assets.

What happens when they can no longer do that? Will all these markets crash? Will the rest of us be able to afford a home? Will greedy boomers be driven to beg on the streets?

[Anonymous No.13742053]

>>13740353
Not enough dollars out there, dollar is going massivly higher

retarded chink currency is worthless because their economy is, and always has been, a fucking scam

[Anonymous No.13742054]

>>13741965
Would this lead to more "jobs back home" or a growth in a stronger manufacturing base in america afterwards?
Or is this purely economical and things will just continue on as before

[Anonymous No.13742133]

Bullish for japan

[Anonymous No.13742186]

Don't forget that the chinks are making vast investments in Africa. That's going to be their escape hatch. And in 40 years, nobody will remember that niggers used to come from there.

[Anonymous No.13742228]

>>13742052
we can only pray

[Anonymous No.13742255]

>>13742054

It's very complicated dynamic so it's hard to tell. I would think that most jobs would remain overseas as China is not the only country with cheap labor

[Anonymous No.13742300]

>>13742052
Link will hit 1000 when normie markets crash on booms day

[Anonymous No.13742315]

>not reading all that shit
Just tell me what to buy and when to sell

[Anonymous No.13742318]

>>13742255
True.
Will this lead to Africa eating some of China's pie?

[Anonymous No.13742334]

>>13742300
Call it the rapture - 2nd coming of the spam god - screencap this stc

[Anonymous No.13742474]

>>13740353
any ETA for when this pops?

[Anonymous No.13742513]

>>13742318
On booms day the third world, darker races, and neets (crypto accumulators) will get the last laugh

[Anonymous No.13743089]

bump for more info

[Anonymous No.13743130]

>>13742255
Depends on whether economic instability will beget political instability. Jobs will come flooding back to the States if some kind of shooting war occurs in East Asia. Depending on how developed US shale becomes, jobs might just go flooding back to the States on sheer input cost reductions.

[Anonymous No.13743145]

>>13740353
Everything in China is fake. A Chinaman will tell you as much.

[Anonymous No.13743386]

back to crypto: will this cause a mass coin rally as people try and cash out their fiat?

[Anonymous No.13743814]

>>13743130
>. Jobs will come flooding back to the States if some kind of shooting war occurs in East Asia

How do we meme a war between poos and chinks? Maybe something about how one poos in the loo like whites?

[Anonymous No.13743945]

>>13743814
Certain India would win.

[Anonymous No.13744066]

>>13743945
Why can't we win?

All we need to do is have one minor nuclear exchange between the two, its not like they aren't already polluted shitholes