{"id":59587,"date":"2021-09-29T12:08:35","date_gmt":"2021-09-29T17:08:35","guid":{"rendered":"https:\/\/olduvai.ca\/?p=59587"},"modified":"2021-09-29T12:08:35","modified_gmt":"2021-09-29T17:08:35","slug":"evergrande-contagion-threatens-to-collapse-the-everything-bubble","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=59587","title":{"rendered":"Evergrande Contagion Threatens to Collapse the Everything Bubble"},"content":{"rendered":"
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Evergrande Contagion Threatens to Collapse the Everything Bubble<\/a><\/h3>\n<\/div>\n
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\"Evergrande<\/p>\n
Photo by\u00a0Hyunwon Jang<\/a><\/span><\/div>\n<\/div>\n

\u201cEvergrande, a real-estate colossus in China, is collapsing. Don\u2019t expect the collapse to be contained to China. The global macro implications are huge.\u201d<\/em>\u00a0\u2013\u00a0Mike Shedlock<\/a><\/strong><\/p>\n

The U.S. economy is staring down the barrel of a financial shotgun thanks to the Chinese real estate bubble that just popped.<\/p>\n

The trouble started at a\u00a0developer called\u00a0Evergrande<\/strong><\/a>, which is suffering a major crisis. One Wall Street Journal\u00a0article<\/a>\u00a0sharply summarized the company\u2019s problems:<\/p>\n

The party has ended. Years of aggressive borrowing have collided with Beijing\u2019s crackdown on debt, leaving the giant developer on the brink of collapse. Construction of Evergrande\u2019s projects in many cities has stopped.<\/p><\/blockquote>\n

The Guardian<\/a>\u00a0referred to it as \u201cChina\u2019s Lehman Brothers moment.\u201d Of course, Lehman Brothers collapsed during the U.S.\u2019s own 2008 financial crisis.<\/p>\n

\u201cThe mess in China does not stop with Evergrande,\u201d\u00a0according to Mike Shedlock<\/a>.<\/p>\n

How huge? Well, we\u2019ve seen this before in the U.S. (the Great Recession) and in Japan, where the real estate bubble of the late 1980s\u00a0led to a \u201clost decade.\u201d<\/a>\u00a0These economic events don\u2019t respect national borders. They go global.<\/p>\n

With that in mind, here\u2019s how bad it might get\u2026<\/p>\n

China officials asked to get \u201cready for the possible storm\u201d<\/strong><\/p>\n

Get ready for the possible storm ahead\u2026<\/p>\n

That\u2019s exactly what the Chinese leadership warned local authorities after the Evergrande collapse became apparent. According to a\u00a0Kitco report<\/a>:<\/p>\n

[Chinese] officials noted they are being asked to get \u201cready for the possible storm,\u201d including all the potential economic and social consequences that could come along if Evergrande fails to meet its financial obligations.<\/p><\/blockquote>\n

And fail the company did, as reported by Market Rebellion in a\u00a0tweet<\/a>\u00a0on September 23: \u201cEvergrande reportedly missed its $83.53 million March 2022 bond payment that was due today.\u201d<\/p>\n

Here\u2019s why this isn\u2019t a\u00a0\u201crun of the mill\u201d economic crisis<\/a> for China:<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Evergrande Contagion Threatens to Collapse the Everything Bubble Photo by\u00a0Hyunwon Jang \u201cEvergrande, a real-estate colossus in China, is collapsing. Don\u2019t expect the collapse to be contained to China. The global macro implications are huge.\u201d\u00a0\u2013\u00a0Mike Shedlock The U.S. economy is staring down the barrel of a financial shotgun thanks to the Chinese real estate bubble that […]<\/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":[18769,17407,17853],"class_list":["post-59587","post","type-post","status-publish","format-standard","hentry","category-economics","tag-birch-gold-group","tag-evergrande","tag-everything-bubble"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59587","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=59587"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59587\/revisions"}],"predecessor-version":[{"id":59589,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59587\/revisions\/59589"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=59587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=59587"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=59587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}