As China’s economy implodes because of the debt buildup over the years, which cannot now be sustained, combined with the covid lockdowns in the major cities, can they solve the potential collapse by creating more debt?
It is looking like China’s economy has been built on unsustainable debt levels. In addition, the Chinese authorities are now telling overseas bondholders, your claims are probably worthless, and only local lenders can expect to be repaid.
How much of this toxic Chinese paper has found its way onto the books of American and Domestic banks and Pension Funds?
As Warren Buffett has said: “You only find out who is swimming naked when the tide goes out.”
On a related topic will we see a giant margin call if TSLA stock closes below $600/share? How involved is Morgan Stanley in Elon’s borrowing binge? How much at risk is our banking system?
May 20th 2022