ITS LIQUIDITY STUPID………
China has had to inject enormous resources into its banking sector to assure liquidity remains adequate. Hundreds of BILLIONS are leaving China from all over the world. Many to never return. Others are repositioning risk which is another set of 100’s of billions leaving. Millions upon millions will go unemployed in China before China New Years. A panic creating runs on now illiquid banks would close the Chinese banking system in one day – just as it did in Greece. Will this panic set in as the people realize the banks are out of money?
Credit is drying up. Loans are being called. No one is giving out new loans. The lubricant for the Chinese miracle – low cost credit – is now evaporated. The freeze up of financial machinery is mushrooming now as you read. Liquidity is drying up. There now is a capital crises in China effecting systemic liquidity.
Those at the head are themselves panicking. They make one mistake and the system collapses. China could go bankrupt. China could enter a period of REVOLUTION. The stability China prides itself on first and foremost is now shattered in a single week and this lost stability is not soon to return to China and its people. Failed policy is the core reason – always is.
Berny Dohrmann – Chairman CEO SPACE INTERNATIONAL