{"id":36156,"date":"2018-07-22T07:03:15","date_gmt":"2018-07-22T12:03:15","guid":{"rendered":"http:\/\/olduvai.ca\/?p=36156"},"modified":"2018-07-22T07:03:15","modified_gmt":"2018-07-22T12:03:15","slug":"surge-in-global-credit-driven-by-china-deflationary-bust-coming","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=36156","title":{"rendered":"Surge in Global Credit Driven by China: Deflationary Bust Coming"},"content":{"rendered":"<header>\n<div class=\"story-header-area\">\n<div class=\"clearfix\">\n<div class=\"story-header\">\n<h3><a href=\"https:\/\/www.themaven.net\/mishtalk\/economics\/surge-in-global-credit-driven-by-china-deflationary-bust-coming-Gf5zvrzR0ES3wot8gS5FyA\/\">Surge in Global Credit Driven by China: Deflationary Bust Coming<\/a><\/h3>\n<\/div>\n<div class=\"photo\">\n<div class=\"renderable jss600 Center Large show\">\n<figure class=\"image\">\n<div class=\"jss238 picture loaded\"><img decoding=\"async\" class=\"\" title=\"\" src=\"https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FoYIe8r8VIkOfKdeaJyOWZA\" srcset=\"https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FoYIe8r8VIkOfKdeaJyOWZA?w=684&amp;q=75&amp;h=379.2278664731495&amp;auto=format&amp;fit=crop 1x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FoYIe8r8VIkOfKdeaJyOWZA?w=1026&amp;q=75&amp;h=569&amp;auto=format&amp;fit=crop 1.5x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FoYIe8r8VIkOfKdeaJyOWZA?w=1368&amp;q=75&amp;h=758&amp;auto=format&amp;fit=crop 2x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FoYIe8r8VIkOfKdeaJyOWZA?w=2052&amp;q=75&amp;h=1138&amp;auto=format&amp;fit=crop 3x\" alt=\"\" width=\"684\" height=\"379.2278664731495\" \/><\/div><figcaption><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"post-summary\">\n<div class=\"publish-info\">\n<div class=\"authorCard jss611\"><\/div>\n<\/div>\n<\/div>\n<section class=\"deck\">Since 2008 the growth in global credit has been on the back of China. Real estate led the way. Now what?<\/p>\n<\/section>\n<\/div>\n<\/header>\n<article class=\"story-body clearfix\">\n<div class=\"body\">\n<div class=\"markdown\">\n<div>\n<div>\n<p>Inquiring minds should take a look at FT Alphaville article <a href=\"https:\/\/www.themaven.net\/Chinese%20real%20estate,%20charted\" target=\"_blank\" rel=\"noopener\">Chinese Real Estate, Charted<\/a>. Here is the key chart.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"renderable jss600 Center Large show\">\n<figure class=\"image\">\n<div class=\"jss238 picture loaded\"><img decoding=\"async\" class=\"\" title=\"\" src=\"https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FPjrMwfKv30ix5KskjRCBcg\" srcset=\"https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FPjrMwfKv30ix5KskjRCBcg?w=684&amp;q=75&amp;h=831.6981132075473&amp;auto=format&amp;fit=crop 1x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FPjrMwfKv30ix5KskjRCBcg?w=1026&amp;q=75&amp;h=1248&amp;auto=format&amp;fit=crop 1.5x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FPjrMwfKv30ix5KskjRCBcg?w=1368&amp;q=75&amp;h=1663&amp;auto=format&amp;fit=crop 2x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2FPjrMwfKv30ix5KskjRCBcg?w=2052&amp;q=75&amp;h=2495&amp;auto=format&amp;fit=crop 3x\" alt=\"\" width=\"684\" height=\"831.6981132075473\" \/><\/div><figcaption><\/figcaption><\/figure>\n<\/div>\n<div class=\"observable\">\n<div id=\"ast-tag-in-message-2\" class=\"jss404 CONTENT_BREAK_DT ad-unit\">In March, Jim Chanos stated &#8220;China has gotten worse&#8221;.<\/div>\n<\/div>\n<div class=\"renderable jss600 Center Large show\"><span class=\"\"><iframe loading=\"lazy\" id=\"embeddedUI2MrEVW3Ua6qqbdFP_8jA-4\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/Iwj2a5odeIE?autoplay=0&amp;enablejsapi=1&amp;origin=https%3A%2F%2Fwww.themaven.net&amp;widgetid=1\" width=\"100%\" height=\"360\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/span><\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>According to Chanos, global credit expanded by $1.5 trillion in the first quarter of 2018, and China provided $1 trillion of it.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p><strong>Chinese Real Estate Single Most Important Asset Class<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>In February, Jim Chanos told <a href=\"https:\/\/nordic.businessinsider.com\/jim-chanos-explains-significance-china-real-estate-market-2018-2\/\" target=\"_blank\" rel=\"noopener\">Business Insider<\/a> that Chinese real estate to be the most important single asset class in the world.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>There&#8217;s an excellent video interview in the BI article where Chanos discusses the surge in credit fueled by unwarranted residential real estate speculation.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p><strong>Inflation Deflation<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>Note the decline in US credit expansion in 2010. Mark-to-market, the recovery began in 2009 when Bernanke suspended mark-to-market recording of business loans.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>My definition says inflation is an increase in money supply and credit, marked-to-market. With rules suspended in the midst of stress test lies, what&#8217;s going on can only be estimated.<\/p>\n<div class=\"markdown\">\n<div>\n<div>\n<p>It&#8217;s clear, for now, that we are in a period of global inflation. The markets act as if this credit can be paid back. It won&#8217;t, and that is the fallacy of expecting an inflation boom in the future. The boom has been underway for a long time, fueled by FED, ECB, and BoJ QE accompanied by a surge in Chinese credit.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>A bust will come, and it will not be inflationary.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n","protected":false},"excerpt":{"rendered":"<p>Surge in Global Credit Driven by China: Deflationary Bust Coming Since 2008 the growth in global credit has been on the back of China. Real estate led the way. Now what? Inquiring minds should take a look at FT Alphaville article Chinese Real Estate, Charted. Here is the key chart. In March, Jim Chanos stated [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[130,175,202,19237,14648,13390],"class_list":["post-36156","post","type-post","status-publish","format-standard","hentry","category-economics","tag-china","tag-credit","tag-deflation","tag-jim-chanos","tag-michael-shedlock","tag-mishtalk"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36156"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36156\/revisions"}],"predecessor-version":[{"id":36157,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/36156\/revisions\/36157"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}