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Topic: [ANN][NOTE]DNotes - Celebrating DNotes 3rd Birthday - Forum Now Open - page 82. (Read 814547 times)

legendary
Activity: 1638
Merit: 1005


I must have been sleeping through the timeframes of some of these stories as I don't recall them at all. Thank you Nick for enlightening me!

As far as the 15 year old Bitcoin Kid who is a CTO - wow that's young. Good luck to him! His life at 15 is as polar opposite to mine at 15 as you can get, but then according to my kids I was around before the wheel. Wink
RJF
hero member
Activity: 616
Merit: 500
Online since '89...
New Exchange:

https://1ex.trade/index.php

They are looking for stable coins to add, any interest in adding DNotes?

"We are pleased to announce that 1EX.TRADE is open for trading. Today on the 8th of January 2016 is a new mile stone been set for 1EX.TRADE. After months of development and testing we have completed all and are now fully operational. Over the next few days / weeks more and more coins will follow. Only verified or old stable coins will be listed. Multi currency functionality where the trader can set his own market. Direct bank link for withdraw and deposit fiat currencies. We hope you all like the new exchange and start trading with 1EX.TRADE

Regards
The 1EX.TRADE Team"



Thanks RJF. They are of course more than welcome to add DNotes. At a quick look, I couldn't find out much about the company though, who owns and operates it, where they are located, and so on. We have to understandably be cautious.

Without doubt. Be nice to get in on the "ground floor" if they check out. CryptoCapital appears to be the parent:

https://cryptocapital.co/  &   https://cryptocapital.co/exchanges.html


legendary
Activity: 1932
Merit: 1111
DNotes
New Exchange:

https://1ex.trade/index.php

They are looking for stable coins to add, any interest in adding DNotes?

"We are pleased to announce that 1EX.TRADE is open for trading. Today on the 8th of January 2016 is a new mile stone been set for 1EX.TRADE. After months of development and testing we have completed all and are now fully operational. Over the next few days / weeks more and more coins will follow. Only verified or old stable coins will be listed. Multi currency functionality where the trader can set his own market. Direct bank link for withdraw and deposit fiat currencies. We hope you all like the new exchange and start trading with 1EX.TRADE

Regards
The 1EX.TRADE Team"




Thanks RJF. They are of course more than welcome to add DNotes. At a quick look, I couldn't find out much about the company though, who owns and operates it, where they are located, and so on. We have to understandably be cautious.
RJF
hero member
Activity: 616
Merit: 500
Online since '89...
New Exchange:

https://1ex.trade/index.php

They are looking for stable coins to add, any interest in adding DNotes?

"We are pleased to announce that 1EX.TRADE is open for trading. Today on the 8th of January 2016 is a new mile stone been set for 1EX.TRADE. After months of development and testing we have completed all and are now fully operational. Over the next few days / weeks more and more coins will follow. Only verified or old stable coins will be listed. Multi currency functionality where the trader can set his own market. Direct bank link for withdraw and deposit fiat currencies. We hope you all like the new exchange and start trading with 1EX.TRADE

Regards
The 1EX.TRADE Team"


legendary
Activity: 1932
Merit: 1111
DNotes
EmerCoin (EMC) just selected for Microsoft's Azure Platform.

http://cointelegraph.com/news/116020/price-of-emercoin-doubles-following-its-partnership-with-microsoft

Would love to hear Microsoft's reasoning although they do have a rather diverse offering...

Does anyone know much about "Livecoin". That is where majority of Emercoin is traded.

Everything is still at a very early stage. I have been following the situation very closely. Investors may be getting ahead of themselves.


That article sounds more like a very pitchy press release than unbiased news. Everything is changing so fast, today's technology is old news next month.

I believe Microsoft is trying to reach out to the cryptocurrency community to get the industry involved in their cloud computing platform.
legendary
Activity: 1638
Merit: 1005
EmerCoin (EMC) just selected for Microsoft's Azure Platform.

http://cointelegraph.com/news/116020/price-of-emercoin-doubles-following-its-partnership-with-microsoft

Would love to hear Microsoft's reasoning although they do have a rather diverse offering...

Does anyone know much about "Livecoin". That is where majority of Emercoin is traded.

Everything is still at a very early stage. I have been following the situation very closely. Investors may be getting ahead of themselves.


That article sounds more like a very pitchy press release than unbiased news. Everything is changing so fast, today's technology is old news next month.
full member
Activity: 157
Merit: 100
Netflix has been in the news a lot lately. With very aggressive expansion plan in place, Netflix could be Bitcoin’s best friend.

But don’t forget that Netflix struggled for years during its formative stage. It is now one of the biggest success stories. Innovators see things differently with long term horizon of years not months. “We’ll see where we go from here in the next 10, 15 years from a payments perspective..” certainly caught my attention.”  We know that DNotes will be a viable payment option by then, for sure.


Netflix Exec Suggests Streaming Video Giant Open to Bitcoin

Netflix CFO David Wells touched on the subject of bitcoin during a question-and-answer session at an investor event earlier this month.


“We'll see where we go from here in the next 10, 15 years from a payments perspective, because countries still want to hold on to their monetary policy. But [it] sure would be nice to have bitcoin, in terms of a global currency, that you could use globally.”

Read More:

http://www.coindesk.com/netflix-cfo-bitcoin-payments/



     I think that is one of the traits of a true visionary. They look at and imagine the world years, maybe decades in the future. Most ordinary folks think tomorrow is the most important day in the future. Visionarys think the day five or ten years from now is more important than tomorrow. I tend to agree.

     Smokey
legendary
Activity: 1610
Merit: 1060
Netflix has been in the news a lot lately. With very aggressive expansion plan in place, Netflix could be Bitcoin’s best friend.

But don’t forget that Netflix struggled for years during its formative stage. It is now one of the biggest success stories. Innovators see things differently with long term horizon of years not months. “We’ll see where we go from here in the next 10, 15 years from a payments perspective..” certainly caught my attention.”  We know that DNotes will be a viable payment option by then, for sure.


Netflix Exec Suggests Streaming Video Giant Open to Bitcoin

Netflix CFO David Wells touched on the subject of bitcoin during a question-and-answer session at an investor event earlier this month.


“We'll see where we go from here in the next 10, 15 years from a payments perspective, because countries still want to hold on to their monetary policy. But [it] sure would be nice to have bitcoin, in terms of a global currency, that you could use globally.”

Read More:

http://www.coindesk.com/netflix-cfo-bitcoin-payments/
member
Activity: 82
Merit: 10
This is the best article I came across why a serious debt meltdown may already be in the making.



China Is Headed for a Debt Meltdown Like the U.S. in 2008 -- But Worse
Posted:
01/08/2016 6:55 pm EST

World attention has focused in recent months on an acute refugee crisis occasioned by the mass migration to Europe of hundreds of thousands now fleeing the Syrian civil war. Less noticed has been another refugee crisis at least as ominous as that underway in the Middle East and Europe -- the fleeing of money from China.

What's going on, and why is it ominous?

To understand what is happening, we must first remind ourselves what happened in the U.S. and global economies in 2008 -- and how China responded to it.

In 2008, the U.S. experienced the precipitous crash of what had been a highly overvalued real estate and associated bond market. Those markets' prices had been driven by cheap credit used by investors to speculate in residential real estate and mortgage-related financial instruments. Because these investments had been financed by private debt, post-crash investors found themselves suddenly owing much more than they owned -- their assets had plummeted, but the debts that they had incurred to buy them had not.

What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own.

When investors, post-crash, find themselves suddenly "underwater" like this, they tend to stop spending on goods and services in the "real" economy. After all, they now have negative net worth, and must accordingly spend larger portions of their incomes paying down debt rather than buying things.

When millions act pursuant to this dynamic, it slows or reverses macroeconomic growth -- it brings recession or all-out depression. The worst such episodes are called "debt-deflations," precisely because the falling prices and contraction experienced by an afflicted macroeconomy are driven by high ratios of private debt to income.

Back now to China. The U.S. debt-deflation that began in late 2008 infected the wider world economy. This was partly because foreign investors had also participated in the U.S. bubble, but it was also because U.S. consumers are primary sources of demand for other nations' products. China, in particular, depended on U.S. consumers to buy its products and thus fuel its growth.

China, then, was especially vulnerable to the contagion effects of America's post-2008 debt deflation. But China's government, as is well known, depends on delivering high domestic growth for its very legitimacy in the eyes of the citizenry. What, then, was China to do?

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.
What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own. First it targeted real estate, directing state-owned banks to extend credit on cheap terms for speculative residential and commercial real estate investments. Then it targeted stocks and other financial instruments, allowing and then encouraging lenders to facilitate purchases of speculative assets on margin.

For five or six years, China's strategy worked. Steadily rising stock and real estate prices underwrote a "wealth effect," making China's wealthier and middle classes feel prosperous and thereby encouraging domestic spending. That in turn substituted for dwindling American and global demand for Chinese exports, keeping China's growth engine running -- for a time. Things were just as they'd been in the U.S. during the late Clinton and Bush years -- private debt fueled ephemeral macroeconomic growth.

In the end, though, the same thing happened to this bubble as happens to all bubbles -- it reached an outer limit, then began to deflate. The deflationary pressure in turn became self-accelerating, just as occurred in the U.S. in 1929 and 2008, and just as occurs in all "runs" on banks or assets.

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.

Exodus of Currency

That takes us to China's new "refugee problem" -- the exodus of currency from its markets. What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.

Worse? Yes, and that takes us on to why China's travails are so ominous.

So, to begin, China's aggregate private debt-to-GDP ratios during its recent peak bubble years are much higher than in the U.S. -- both in 1928 and 2007

If its stock and real estate markets completely melt down, then, China's negative net worth problem and associated debt-deflation -- its "great depression" -- could well make our own look like festive occasions.

That is, of course, ominous enough, but there is more. Note first what I said earlier about where Chinese money is going -- to U.S. real estate and other asset markets. This, too, is worrisome, in at least two ways.

Read More:
http://www.huffingtonpost.com/robert-hockett-/china-debt-meltdown-_b_8940382.html


Just read an article a couple weeks ago where China is dumping, at cheap rates, there excess steel into the American market.  US steel companies are beginning to suffer, which will have a trickle down effect from this and this is only one segment yet large enough of an impact to be written about solely in the news. Scrap prices are very low, softening that market as well. I wonder if this will be another fiasco like the "Sheetrock" when China dumped a bunch of crap Sheetrock into the US market that made so many people sick and cost tons of money to replace?! You all remember the FEMA houses? Rows and rows of inhabitable homes because of China Sheetrock??  Sickened me to think "we" our government would not even use "in house", American made products which would have met the safety standards. One has to wonder when structural materials roll in off the boats if they comply with any safety standards, but we seem to gobble inferior products up each and every day without batting an eye. And, as Alan has stated many time, this is just one more segment. I believe there will be so many more cards to fall and we are just seeing the beginning. China's growth rate has, I believe, come to an unsustainable point in time, which economists have been predicting.  So not only is it the cash flow that Alan talked about it is directly impacting their manufacturing which goes right hand in had with the cash flow. 

"Scrap prices are very low, softening that market as well". This may not mean much to the average people but that has been a multi-billion $ industry in the US alone. Many recycling companies, including many small businesses with revenue up to $50 million are shutting down, with tens of thousands jobs lost. It is all these little troubling signs that I am quite concerned about.

Going back a little farther China came in and purchased tons and tons of scrap at high rates and made it go up, which was great as we were getting high dollar for scrap. But now that they are unloading it at cheap prices this means they are losing money. But, they have to unload to get cash back, thus falls into a shortfall to where they are more than likely below break even point selling off the steel. Alan is correct this is a huge industry when you put all the pieces together.
legendary
Activity: 1610
Merit: 1060

That is a scary statement.

RBS has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel.

The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” it said in a client note.

Andrew Roberts, the bank’s credit chief, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs.

“China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the 'Goldlocks love-in' of the last two years,” he said.

Mr Roberts expects Wall Street and European stocks to fall by 10pc to 20pc, with even an deeper slide for the FTSE 100 given its high weighting of energy and commodities companies. “London is vulnerable to a negative shock. All these people who are ‘long’ oil and mining companies thinking that the dividends are safe are going to discover that they’re not at all safe,” he said.



LOL, when they say "Sell everything" I don't think they mean DNotes as well. I just bought some at below 1,000 sat. That is cheap.

The global economy is rapidly deteriorating. US and Japan may continue to look okay for a while, but are all in one big mess.   
legendary
Activity: 1932
Merit: 1111
DNotes

That is a scary statement.

RBS has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel.

The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008. “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” it said in a client note.

Andrew Roberts, the bank’s credit chief, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs.

“China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the 'Goldlocks love-in' of the last two years,” he said.

Mr Roberts expects Wall Street and European stocks to fall by 10pc to 20pc, with even an deeper slide for the FTSE 100 given its high weighting of energy and commodities companies. “London is vulnerable to a negative shock. All these people who are ‘long’ oil and mining companies thinking that the dividends are safe are going to discover that they’re not at all safe,” he said.

IMZ
legendary
Activity: 1498
Merit: 1000
legendary
Activity: 1610
Merit: 1060
EmerCoin (EMC) just selected for Microsoft's Azure Platform.

http://cointelegraph.com/news/116020/price-of-emercoin-doubles-following-its-partnership-with-microsoft

Would love to hear Microsoft's reasoning although they do have a rather diverse offering...

Does anyone know much about "Livecoin". That is where majority of Emercoin is traded.

Everything is still at a very early stage. I have been following the situation very closely. Investors may be getting ahead of themselves.
RJF
hero member
Activity: 616
Merit: 500
Online since '89...
EmerCoin (EMC) just selected for Microsoft's Azure Platform.

http://cointelegraph.com/news/116020/price-of-emercoin-doubles-following-its-partnership-with-microsoft

Would love to hear Microsoft's reasoning although they do have a rather diverse offering...
legendary
Activity: 1932
Merit: 1111
DNotes
I've done some research on OpenLedger, https://www.youtube.com/watch?v=--CivEZvTxU, https://www.openledger.info/, https://bitcointalksearch.org/topic/openledger-launch-october-13th-2015-a-great-place-to-make-money-1205061. It sounds exciting, but I couldn't find much information regarding how the system actually works. As far as I can tell they hold token digital assets, which represent things like gold, in BTS? Or if they are actually holding physical and digital assets, it would require a third party of sorts, so how is it decentralized and what proof is needed? If anyone has more information I would be interested to know.
legendary
Activity: 1610
Merit: 1060
This is the best article I came across why a serious debt meltdown may already be in the making.



China Is Headed for a Debt Meltdown Like the U.S. in 2008 -- But Worse
Posted:
01/08/2016 6:55 pm EST

World attention has focused in recent months on an acute refugee crisis occasioned by the mass migration to Europe of hundreds of thousands now fleeing the Syrian civil war. Less noticed has been another refugee crisis at least as ominous as that underway in the Middle East and Europe -- the fleeing of money from China.

What's going on, and why is it ominous?

To understand what is happening, we must first remind ourselves what happened in the U.S. and global economies in 2008 -- and how China responded to it.

In 2008, the U.S. experienced the precipitous crash of what had been a highly overvalued real estate and associated bond market. Those markets' prices had been driven by cheap credit used by investors to speculate in residential real estate and mortgage-related financial instruments. Because these investments had been financed by private debt, post-crash investors found themselves suddenly owing much more than they owned -- their assets had plummeted, but the debts that they had incurred to buy them had not.

What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own.

When investors, post-crash, find themselves suddenly "underwater" like this, they tend to stop spending on goods and services in the "real" economy. After all, they now have negative net worth, and must accordingly spend larger portions of their incomes paying down debt rather than buying things.

When millions act pursuant to this dynamic, it slows or reverses macroeconomic growth -- it brings recession or all-out depression. The worst such episodes are called "debt-deflations," precisely because the falling prices and contraction experienced by an afflicted macroeconomy are driven by high ratios of private debt to income.

Back now to China. The U.S. debt-deflation that began in late 2008 infected the wider world economy. This was partly because foreign investors had also participated in the U.S. bubble, but it was also because U.S. consumers are primary sources of demand for other nations' products. China, in particular, depended on U.S. consumers to buy its products and thus fuel its growth.

China, then, was especially vulnerable to the contagion effects of America's post-2008 debt deflation. But China's government, as is well known, depends on delivering high domestic growth for its very legitimacy in the eyes of the citizenry. What, then, was China to do?

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.
What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own. First it targeted real estate, directing state-owned banks to extend credit on cheap terms for speculative residential and commercial real estate investments. Then it targeted stocks and other financial instruments, allowing and then encouraging lenders to facilitate purchases of speculative assets on margin.

For five or six years, China's strategy worked. Steadily rising stock and real estate prices underwrote a "wealth effect," making China's wealthier and middle classes feel prosperous and thereby encouraging domestic spending. That in turn substituted for dwindling American and global demand for Chinese exports, keeping China's growth engine running -- for a time. Things were just as they'd been in the U.S. during the late Clinton and Bush years -- private debt fueled ephemeral macroeconomic growth.

In the end, though, the same thing happened to this bubble as happens to all bubbles -- it reached an outer limit, then began to deflate. The deflationary pressure in turn became self-accelerating, just as occurred in the U.S. in 1929 and 2008, and just as occurs in all "runs" on banks or assets.

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.

Exodus of Currency

That takes us to China's new "refugee problem" -- the exodus of currency from its markets. What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.

Worse? Yes, and that takes us on to why China's travails are so ominous.

So, to begin, China's aggregate private debt-to-GDP ratios during its recent peak bubble years are much higher than in the U.S. -- both in 1928 and 2007

If its stock and real estate markets completely melt down, then, China's negative net worth problem and associated debt-deflation -- its "great depression" -- could well make our own look like festive occasions.

That is, of course, ominous enough, but there is more. Note first what I said earlier about where Chinese money is going -- to U.S. real estate and other asset markets. This, too, is worrisome, in at least two ways.

Read More:
http://www.huffingtonpost.com/robert-hockett-/china-debt-meltdown-_b_8940382.html


Just read an article a couple weeks ago where China is dumping, at cheap rates, there excess steel into the American market.  US steel companies are beginning to suffer, which will have a trickle down effect from this and this is only one segment yet large enough of an impact to be written about solely in the news. Scrap prices are very low, softening that market as well. I wonder if this will be another fiasco like the "Sheetrock" when China dumped a bunch of crap Sheetrock into the US market that made so many people sick and cost tons of money to replace?! You all remember the FEMA houses? Rows and rows of inhabitable homes because of China Sheetrock??  Sickened me to think "we" our government would not even use "in house", American made products which would have met the safety standards. One has to wonder when structural materials roll in off the boats if they comply with any safety standards, but we seem to gobble inferior products up each and every day without batting an eye. And, as Alan has stated many time, this is just one more segment. I believe there will be so many more cards to fall and we are just seeing the beginning. China's growth rate has, I believe, come to an unsustainable point in time, which economists have been predicting.  So not only is it the cash flow that Alan talked about it is directly impacting their manufacturing which goes right hand in had with the cash flow. 

"Scrap prices are very low, softening that market as well". This may not mean much to the average people but that has been a multi-billion $ industry in the US alone. Many recycling companies, including many small businesses with revenue up to $50 million are shutting down, with tens of thousands jobs lost. It is all these little troubling signs that I am quite concerned about.
member
Activity: 82
Merit: 10
This is the best article I came across why a serious debt meltdown may already be in the making.



China Is Headed for a Debt Meltdown Like the U.S. in 2008 -- But Worse
Posted:
01/08/2016 6:55 pm EST

World attention has focused in recent months on an acute refugee crisis occasioned by the mass migration to Europe of hundreds of thousands now fleeing the Syrian civil war. Less noticed has been another refugee crisis at least as ominous as that underway in the Middle East and Europe -- the fleeing of money from China.

What's going on, and why is it ominous?

To understand what is happening, we must first remind ourselves what happened in the U.S. and global economies in 2008 -- and how China responded to it.

In 2008, the U.S. experienced the precipitous crash of what had been a highly overvalued real estate and associated bond market. Those markets' prices had been driven by cheap credit used by investors to speculate in residential real estate and mortgage-related financial instruments. Because these investments had been financed by private debt, post-crash investors found themselves suddenly owing much more than they owned -- their assets had plummeted, but the debts that they had incurred to buy them had not.

What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own.

When investors, post-crash, find themselves suddenly "underwater" like this, they tend to stop spending on goods and services in the "real" economy. After all, they now have negative net worth, and must accordingly spend larger portions of their incomes paying down debt rather than buying things.

When millions act pursuant to this dynamic, it slows or reverses macroeconomic growth -- it brings recession or all-out depression. The worst such episodes are called "debt-deflations," precisely because the falling prices and contraction experienced by an afflicted macroeconomy are driven by high ratios of private debt to income.

Back now to China. The U.S. debt-deflation that began in late 2008 infected the wider world economy. This was partly because foreign investors had also participated in the U.S. bubble, but it was also because U.S. consumers are primary sources of demand for other nations' products. China, in particular, depended on U.S. consumers to buy its products and thus fuel its growth.

China, then, was especially vulnerable to the contagion effects of America's post-2008 debt deflation. But China's government, as is well known, depends on delivering high domestic growth for its very legitimacy in the eyes of the citizenry. What, then, was China to do?

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.
What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own. First it targeted real estate, directing state-owned banks to extend credit on cheap terms for speculative residential and commercial real estate investments. Then it targeted stocks and other financial instruments, allowing and then encouraging lenders to facilitate purchases of speculative assets on margin.

For five or six years, China's strategy worked. Steadily rising stock and real estate prices underwrote a "wealth effect," making China's wealthier and middle classes feel prosperous and thereby encouraging domestic spending. That in turn substituted for dwindling American and global demand for Chinese exports, keeping China's growth engine running -- for a time. Things were just as they'd been in the U.S. during the late Clinton and Bush years -- private debt fueled ephemeral macroeconomic growth.

In the end, though, the same thing happened to this bubble as happens to all bubbles -- it reached an outer limit, then began to deflate. The deflationary pressure in turn became self-accelerating, just as occurred in the U.S. in 1929 and 2008, and just as occurs in all "runs" on banks or assets.

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.

Exodus of Currency

That takes us to China's new "refugee problem" -- the exodus of currency from its markets. What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.

Worse? Yes, and that takes us on to why China's travails are so ominous.

So, to begin, China's aggregate private debt-to-GDP ratios during its recent peak bubble years are much higher than in the U.S. -- both in 1928 and 2007

If its stock and real estate markets completely melt down, then, China's negative net worth problem and associated debt-deflation -- its "great depression" -- could well make our own look like festive occasions.

That is, of course, ominous enough, but there is more. Note first what I said earlier about where Chinese money is going -- to U.S. real estate and other asset markets. This, too, is worrisome, in at least two ways.

Read More:
http://www.huffingtonpost.com/robert-hockett-/china-debt-meltdown-_b_8940382.html


Just read an article a couple weeks ago where China is dumping, at cheap rates, there excess steel into the American market.  US steel companies are beginning to suffer, which will have a trickle down effect from this and this is only one segment yet large enough of an impact to be written about solely in the news. Scrap prices are very low, softening that market as well. I wonder if this will be another fiasco like the "Sheetrock" when China dumped a bunch of crap Sheetrock into the US market that made so many people sick and cost tons of money to replace?! You all remember the FEMA houses? Rows and rows of inhabitable homes because of China Sheetrock??  Sickened me to think "we" our government would not even use "in house", American made products which would have met the safety standards. One has to wonder when structural materials roll in off the boats if they comply with any safety standards, but we seem to gobble inferior products up each and every day without batting an eye. And, as Alan has stated many time, this is just one more segment. I believe there will be so many more cards to fall and we are just seeing the beginning. China's growth rate has, I believe, come to an unsustainable point in time, which economists have been predicting.  So not only is it the cash flow that Alan talked about it is directly impacting their manufacturing which goes right hand in had with the cash flow. 
legendary
Activity: 1610
Merit: 1060
This is the best article I came across why a serious debt meltdown may already be in the making.



China Is Headed for a Debt Meltdown Like the U.S. in 2008 -- But Worse
Posted:
01/08/2016 6:55 pm EST

World attention has focused in recent months on an acute refugee crisis occasioned by the mass migration to Europe of hundreds of thousands now fleeing the Syrian civil war. Less noticed has been another refugee crisis at least as ominous as that underway in the Middle East and Europe -- the fleeing of money from China.

What's going on, and why is it ominous?

To understand what is happening, we must first remind ourselves what happened in the U.S. and global economies in 2008 -- and how China responded to it.

In 2008, the U.S. experienced the precipitous crash of what had been a highly overvalued real estate and associated bond market. Those markets' prices had been driven by cheap credit used by investors to speculate in residential real estate and mortgage-related financial instruments. Because these investments had been financed by private debt, post-crash investors found themselves suddenly owing much more than they owned -- their assets had plummeted, but the debts that they had incurred to buy them had not.

What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own.

When investors, post-crash, find themselves suddenly "underwater" like this, they tend to stop spending on goods and services in the "real" economy. After all, they now have negative net worth, and must accordingly spend larger portions of their incomes paying down debt rather than buying things.

When millions act pursuant to this dynamic, it slows or reverses macroeconomic growth -- it brings recession or all-out depression. The worst such episodes are called "debt-deflations," precisely because the falling prices and contraction experienced by an afflicted macroeconomy are driven by high ratios of private debt to income.

Back now to China. The U.S. debt-deflation that began in late 2008 infected the wider world economy. This was partly because foreign investors had also participated in the U.S. bubble, but it was also because U.S. consumers are primary sources of demand for other nations' products. China, in particular, depended on U.S. consumers to buy its products and thus fuel its growth.

China, then, was especially vulnerable to the contagion effects of America's post-2008 debt deflation. But China's government, as is well known, depends on delivering high domestic growth for its very legitimacy in the eyes of the citizenry. What, then, was China to do?

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.
What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own. First it targeted real estate, directing state-owned banks to extend credit on cheap terms for speculative residential and commercial real estate investments. Then it targeted stocks and other financial instruments, allowing and then encouraging lenders to facilitate purchases of speculative assets on margin.

For five or six years, China's strategy worked. Steadily rising stock and real estate prices underwrote a "wealth effect," making China's wealthier and middle classes feel prosperous and thereby encouraging domestic spending. That in turn substituted for dwindling American and global demand for Chinese exports, keeping China's growth engine running -- for a time. Things were just as they'd been in the U.S. during the late Clinton and Bush years -- private debt fueled ephemeral macroeconomic growth.

In the end, though, the same thing happened to this bubble as happens to all bubbles -- it reached an outer limit, then began to deflate. The deflationary pressure in turn became self-accelerating, just as occurred in the U.S. in 1929 and 2008, and just as occurs in all "runs" on banks or assets.

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.

Exodus of Currency

That takes us to China's new "refugee problem" -- the exodus of currency from its markets. What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.

Worse? Yes, and that takes us on to why China's travails are so ominous.

So, to begin, China's aggregate private debt-to-GDP ratios during its recent peak bubble years are much higher than in the U.S. -- both in 1928 and 2007

If its stock and real estate markets completely melt down, then, China's negative net worth problem and associated debt-deflation -- its "great depression" -- could well make our own look like festive occasions.

That is, of course, ominous enough, but there is more. Note first what I said earlier about where Chinese money is going -- to U.S. real estate and other asset markets. This, too, is worrisome, in at least two ways.

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http://www.huffingtonpost.com/robert-hockett-/china-debt-meltdown-_b_8940382.html
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