Trading for Fun
Futures Experience: Intermediate
Favorite Futures: Futures and Forex
Posts: 98 since Sep 2012
Thanks: 75 given,
The shadow banking system in China is insane. The amount of debt that has been created with shadow loans is massive. Most people in China are very poor and yet in Beijing and other cities you can see massive construction everywhere, apartment buildings are growing like weeds and there is a buyer for all of them. Nobody has the money, people making less than 2k a month are buying homes worth 600k or more. All you have to do is know someone who works at a bank and you can get a loan with no credit check. People are throwing around this cheap money everywhere with no discretion because they have no experience with wealth. They don't know anything but how to spend money.
A lot of Chinese are getting these shadow loans and moving to America. I think that this bubble will be a lot worse than ours in 08. When the interest rates go up I think they are screwed.
They also have massive brand new empty ghost cities all over the place. I think that China might have the most amount of malinvestments the world has ever seen.