Say Hello to China's Brewing Financial Crisis -- Elias Groll, Foreign Policy
In global economy these days, there are known unknowns, unknown unknowns, and then there's the Chinese credit market.
On the heels of Federal Reserve Chairman Ben Bernanke's announcement Wednesday that the Fed is set to ease its program of large-scale bond purchases, global markets have been in turmoil, which has only been exacerbated by a sudden spike in the Shanghai interbank offer rate. That rate indicates the willingness of banks to lend to one another, and its surprising rise on Thursday has reinvigorated fears that the Chinese banking system is far more rickety than Beijing would like to let on.
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My Comment: I do expect a slowdown .... years of double digit growth are not sustainable. But a major crash .... I just do not see it happening in a political economy such as China's. But what I am really worried about is not China .... but this 800lb gorilla in the room.
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