Some may find this piece informative.
Goldman Flags $8.2 Trillion Threat Worse Than China EvergrandeSep 30, 2021
The real worry concerning the China Evergrande default drama is the inevitable where-there’s-smoke-there’s-fire paranoia that accompanies debt stumbles.
The most worrisome such blaze, say analysts at Goldman Sachs, is surging local government debt levels that President Xi Jinping’s men have done their best to hide.
The default troubles at the globe’s most indebted property development seem like small embers compared to the $8.2 trillion worth of local government financing vehicles outstanding.
And that’s just the LGFVs we know of. The data that Goldman’s Maggie Wei highlights is as of the end of 2020. Clearly, the tally is higher now—perhaps markedly. Ten months ago, these shadowy investment schemes had reached 53 trillion yuan, up from 16 trillion yuan, or $2.47 trillion, in 2013. They now amount to roughly 52% of China’s gross domestic product, topping the official amount of outstanding government debt.
In other words, as scary at the $300 billion Evergrande story might be, Xi’s government has much bigger problems on its hands. The most acute: keeping GDP this year from falling too far below the 6% Beijing hoped to produce without adding to the nation’s bubble troubles.
The forces behind local governments sitting on financing-vehicle debt worth twice the size of Germany’s GDP date back to 2008. Even before the Lehman Brothers crisis, Communist Party dynamics encouraged municipal borrowing binges. The way local officials got attention in Beijing—and rose to national prominence—was producing above-average GDP rates.
https://www.forbes.com/sites/williampesek/2021/09/30/goldman-flags-82-trillion-threat-worse-than-china-evergrande/ It appears china has an outstanding $8.2 trillion LGFV (local government financing vehicles outstanding) bubble to rival the united states student loan or housing bubbles.
China's economy is still rolling along despite chinese banks defaulting and needing to be bailed out. Coupled with many catastrophic articles published about large chinese enterprises failing across the board.
The united states war in the middle east is claimed to have costed more than $12 trillion by some sources. If china pursues war against hong kong, taiwan and neighboring territories. What would the cost be? Military technology in a modern age is so overwhelmingly expensive, it could carry the potential to make war too expensive an option to pursue, without eventually bankrupting warring nations.
With the individual cost of sophisticated missiles rivaling the cost of a lamborghini. At a certain point, launching lambos at foreign countries would have to become economically unfeasible, is it fair to say.
I do think that with the Crisis lurking right around the corner, the people would have a hard time trusting the normal currencies. The fiat might become obsolete in many Nations.
We might see people flocking to invest in cryptocurrencies like Bitcoins. At the end of the day, they might work exactly how they worked in the pandemic, despite the whole crisis people were still earning, making money, therefore I do think it might not be such a bad news for Bitcoins, if it was able to take the hit from China, we might already be looking at something made stronger by endless attacks from banks, governments and everything else as well.
Nothing to worry about it, it's not going to affect bitcoin since it's not crypto related. Plus it's not really our problem since it's China's internal problem and no matter how I look at it, I always see that it can only affect China alone so it's much better.
The fact is, the Chinese government is long set to release their own token, their own so called crypto, which is nothing but fiat2.0, they have been giving hints about banning bitcoins and other cryptocurrencies since ages therefore I do think that, this step was due from their side, they already were giving hints, so it should not be a shock to us.
