Just how bad is the Chinese economy?
China’s most powerful military leader, in an unusual public statement, last week ordered military forces to prepare for combat, as Chinese warships deployed to waters near disputed islands and anti-Japan protests throughout the country turned violent.
Protests against the Japanese government’s purchase of three privately held islands in the Senkakus chain led to mass street protests, the burning of Japanese flags, and attacks on Japanese businesses and cars in several cities. Some carried signs that read ‘Kill all Japanese,’ and ‘Fight to the Death’ over disputed islands. One sign urged China to threaten a nuclear strike against Japan.
Where is this going? Who is paying attention? I know it’s a hopeless idea that the American government would get involved and try to sort things out, but is anyone?
If you want to really scare yourself: Antipodean in the comments has kindly put up this article ending with the following conclusion which is genuinely the culmination of what has come before:
We now know that this has been happening in China with the most critical component of its economic growth miracle: steel. We will soon discover that all other assets: stocks, bonds, commodities (including gold and silver) and finally cash (think deposits) have been comparably rehypothecated and criminally commingled. The end result will be the most epic bank run in world history, which incidentally is precisely what the central banks are attempting desperately to delay as much as possible by generating excess inflation to ‘inflate’ away the debt, leading to rematching of finite assets and virtually infinite liabilities. Alas, in a world in which credit-money liabilities are in the quadrillions, and in which the real assets are in the tens of trillions, only hyperinflation can seal the deal.
Imagine how the Capitalo-Commies are going to behave if they have a real domestic unemployment disaster.
This looks like merely a trial run exercise to iron out the bugs.
Taiwan or Japan?
Alfonso
19 Sep 12 at 8:32 am
There is an ancient and dishonourable tradition of stirring up paranoia about enemies abroad when there are troubles at home.
Poor Old Rafe
19 Sep 12 at 9:04 am
How bad is the Chineese economy, pretty bad
Antipodean
19 Sep 12 at 9:07 am
Nothing to see here people. Ripping the guts from the defence budget proves there’s nothing to worry about in this region.
Oblique
19 Sep 12 at 10:00 am
During Bill Clinton’s time the Chinese became equally obnoxious about Taiwan with all manner of threats and military noises. Clinton sent an aircraft carrier between China and Taiwan, which promptly shut them up.
For all his incompetence, I expect Obama will do something similar. He can’t afford to be a total soft cock.
DavidLeyonhjelm
19 Sep 12 at 10:59 am
LOL Rafe, sounds like you’re criticising Steve for being paranoid.
m0nty
19 Sep 12 at 11:33 am
Oh goody, that aircraft carrier should last just a little longer than the flight time of an anti ship cruise missile.
Eyrie
19 Sep 12 at 11:42 am
That second link is a killer… Sub prime steel anyone?
Break it down and its not much more sophisticated than a car dealers scam.
Bloke here in town had cars on a “floor plan”, where you pay an increasing % of the value of the car unless you sell it sooner.
Ran into a bit of financial trouble and didnt report a car sold so he pocketed the money, a short term fix.
Then did it a few more times and went tits up, car franchise came in and took all his reamining stock away.
thefrollickingmole
19 Sep 12 at 12:39 pm
Cruise missiles not a huge problem Eyrie, they are subsonic and nice inbound targets for the gattling Phallanx and its radar targeting improvements….. yer big prob is the Chinese developed ICBM fleet attack weapon, not a nuc, but very quick and not thrusted by a motor in the late stages of reentry to target, so harder to kill.
Alfonso
19 Sep 12 at 1:43 pm
gatling
Alfonso
19 Sep 12 at 1:44 pm
The chinese can’t attat the Japs without the US having to respond, so they won’t.
It’s more likely for domestic political purposes.
Pedro
19 Sep 12 at 2:52 pm
An interesting comment in the “sub-prime” steel article.
Antipodean
19 Sep 12 at 3:40 pm
Posted elsewhere…but imagine collateralising with this:
http://www.zerohedge.com/news/tungsten-filled-10-oz-gold-bar-found-middle-manhattans-jewelry-district
.
19 Sep 12 at 3:51 pm
Yeah, caught that article this AM Antipodean, and noted it to some of the usual suspects.
If it is true (and I have 1 confirming piece already), then get a hedge of some sort. I doubt the global economy can weather yet another major meltdown.
Mk50 of Brisbane
19 Sep 12 at 4:14 pm
As in gold/silver, Mk50?
Bob Sewell
19 Sep 12 at 9:30 pm
The idea of the Chinese attacking the Japanese and being even able to sustain such an attack is almost as laughable as Canada attempting an invasian of the US.
It ain’t going to happen.
James P
19 Sep 12 at 9:44 pm