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Fitch Cuts China Local Currency Debt Rating

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http://www.bbc.co.uk/news/business-22088704

Fitch Ratings has downgraded China's sovereign credit rating, warning about a credit build-up in the economy that could threaten the recovery.

The agency cited "underlying structural weaknesses" and a growing risk from shadow banking.

The downgrade is for yuan-denominated debt, not foreign currency debt.

Some analysts have raised concerns over China's debt levels since 2009, when state-owned banks gave out a massive amount of loans to boost growth.

The reality is China is going to have a recession triggered by excessive internal debt, all this crap is going to cause a major problem.

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http://www.bbc.co.uk/news/business-22088704

The reality is China is going to have a recession triggered by excessive internal debt, all this crap is going to cause a major problem.

Don't they have a lot of foreign assets? Can't they just use those to transfer the debt to another country? Genuine question - I can't work out if there's a mechanism for this that they can use. Also, the article doesn't clarify how much of the debt is public and how much is private (in theory it doesn't make much difference, but we know how much the state hates giving little people the same amount of free stuff as the big people).

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Don't they have a lot of foreign assets? Can't they just use those to transfer the debt to another country? Genuine question -

Yes they do, but that will create a political sh!t storm in the other country, as they will be probably pushed in to recession because of the Chinese sell off. and that is IF China can get back anything close to 1:1 for what they paid. any profit is lost.

but thats on a political scale, individuals facing bankruptcy/eviction wont care, and they will sell any foreign assets, which could amass to a similar effect, but also devaluing Chinas holdings in other countries.

not sure if true, but i heard that China hold more American $ than America does.

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http://www.bbc.co.uk/news/business-22088704

The reality is China is going to have a recession triggered by excessive internal debt, all this crap is going to cause a major problem.

You think so?

Western bankers and politicians can only dream of being able have the ultimate power to rob the populace and send them packing to the mines and rice fields, or even execute folk en-masse.

China will come out of it just fine so long as they don't get the Yanks and Arabs trucking in too many guns to disgruntled farmers.

Edited by cashinmattress

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what? :blink:

I think he means they have acquired something of little value due to a deception. (pig in a poke means being sold, e.g., a cat in a bag having been told it was a suckling pig).

Edited by tomandlu

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what? :blink:

http://en.wikipedia.org/wiki/Pig_in_a_poke

The idioms pig in a poke and sell a pup (or buy a pup) refer to a confidence trick originating in the Late Middle Ages, when meat was scarce, but cats and dogs (puppies) were not.[1][2][3] The idiom pig in a poke can also simply refer to someone buying a low-quality pig in a bag because he or she did not carefully check what was in the bag.[4]

The scheme entailed the sale of a suckling pig or pup in a poke (bag). The bag would actually contain a cat or dog (not particularly prized as a source of meat), which was sold to the victim in an unopened bag. The French idiom acheter (un) chat en poche (to buy a cat in a bag) refers to an actual sale of this nature, as do many European equivalents, while the English expression refers to the appearance of the trick.[5]

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Don't they have a lot of foreign assets? Can't they just use those to transfer the debt to another country? Genuine question - I can't work out if there's a mechanism for this that they can use. Yuan

You can't settle a yuan debt with dollars. Foreign reserves can't be used in the domestic economy.

If the government sells it's dollars the yuan rises, factories can't export their goods and close and unemployment rises....

Foreign reserves are only useful if:

1) you run current account deficits

2) You have capital flight

2 might happen in china.

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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