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China is a basket case....

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  1. #31
    Mamba

    In terms of personal debt people are sitting on a powder keg.

    You look around and yes there's a lot of wealth from the middle to top end but when you see people you know are earning less than 5000RMB a month driving a new car, buying a new flat or even a second flat to rent out, travelling two or three times a year and shopping every weekend you know there's something off.

    I've had people say to my face "hahaha, Westerners spend money, Chinese save it" then pull out a credit card to stick a coffee on it.

    As someone who watched the unchecked rise of personal debt and credit cards happen in the UK in the era of free money people went mental.

    Before we left the UK permanently in 2006 we had a big send off dinner with a group of friends. Talk got to oh you're so lucky leaving, then to oh I can't afford to leave, to people admitting how much debt they were in.

    Every single person around that table was between 35,000 and 250,000 POUNDS in debt. Not mortgages. Credit cards.

    The scary thing is that they had thought nothing of it as they racked up that debt.

    That's what's been happening in China for at least the last four years..

    Free play money gifted from the banks. When the bubble bursts it will be very, very messy.

    Last edited by Mamba; 20-05-2016 at 08:13 AM.

  2. #32

    Join Date
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    Quote Originally Posted by Mamba:
    In terms of personal debt people are sitting on a powder keg.

    You look around and yes there's a lot of wealth from the middle to top end but when you see people you know are earning less than 5000RMB a month driving a new car, buying a new flat or even a second flat to rent out, travelling two or three times a year and shopping every weekend you know there's something off.

    I've had people say to my face "hahaha, Westerners spend money, Chinese save it" then pull out a credit card to stick a coffee on it.

    As someone who watched the unchecked rise of personal debt and credit cards happen in the UK in the era of free money people went mental.

    Before we left the UK permanently in 2006 we had a big send off dinner with a group of friends. Talk got to oh you're so lucky leaving, then to oh I can't afford to leave, to people admitting how much debt they were in.

    Every single person around that table was between 35,000 and 250,000 POUNDS in debt. Not mortgages. Credit cards.

    The scary thing is that they had thought nothing of it as they racked up that debt.

    That's what's been happening in China for at least the last four years..

    Free play money gifted from the banks. When the bubble bursts it will be very, very messy.
    I didn't realize the Chinese people had so much personal debt, I thought most of the debt issues were at the government level.

  3. #33

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    Quote Originally Posted by Open Casket:
    I didn't realize the Chinese people had so much personal debt, I thought most of the debt issues were at the government level.
    Most is at corporate level I thought.

  4. #34

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    Quote Originally Posted by Mamba:
    In terms of personal debt people are sitting on a powder keg.

    You look around and yes there's a lot of wealth from the middle to top end but when you see people you know are earning less than 5000RMB a month driving a new car, buying a new flat or even a second flat to rent out, travelling two or three times a year and shopping every weekend you know there's something off.

    I've had people say to my face "hahaha, Westerners spend money, Chinese save it" then pull out a credit card to stick a coffee on it.

    As someone who watched the unchecked rise of personal debt and credit cards happen in the UK in the era of free money people went mental.

    Before we left the UK permanently in 2006 we had a big send off dinner with a group of friends. Talk got to oh you're so lucky leaving, then to oh I can't afford to leave, to people admitting how much debt they were in.

    Every single person around that table was between 35,000 and 250,000 POUNDS in debt. Not mortgages. Credit cards.

    The scary thing is that they had thought nothing of it as they racked up that debt.

    That's what's been happening in China for at least the last four years..

    Free play money gifted from the banks. When the bubble bursts it will be very, very messy.
    I don't think you are right about Chinese personal debt. Scroll through some countries household debt to GDP ratio here

    China Households Debt To Gdp | 2006-2016 | Data | Chart | Calendar

    At 38% China is well behind both developed markets as well as many Asian peers. Look at Thailand (71%), Korea (87%), Singapore (61%), Hong Kong (67%), Japan (66%) etc. Neither the absolute amount nor the growth rate of China household debt make me lose sleep at night.

    By the way, I must have missed the debt bubble bursting in the UK after you left in 2006?

  5. #35
    Mamba

    I can only tell you what I've seen and what I've seen is a hell of a lot of people living way beyond their means.

    The debt bubble hasn't burst in the UK, it's the new norm.

    Statistics Archive | The Money Charity

    http://www.telegraph.co.uk/business/...ight-says-obr/

    Last edited by Mamba; 20-05-2016 at 09:04 AM. Reason: Add article

  6. #36

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    Quote Originally Posted by Mamba:
    I can only tell you what I've seen and what I've seen is a hell of a lot of people living way beyond their means.
    I guess the appropriate response is "the plural of anecdote is not data".

    In the wider point of debt-fuelled lifestyles, when interest rates rise, we'll see who has living beyond their means.....
    Mamba likes this.

  7. #37
    Mamba
    I guess the appropriate response is "the plural of anecdote is not data".


    Absolutely agreed.

    My grandfather always told us to "smell the wind" see which way it was blowing and what it was bringing with it.

    I smell a global shit storm.
    Open Casket likes this.

  8. #38

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    Quote Originally Posted by hullexile:
    Most is at corporate level I thought.
    Define corporate in China? You have government owned banks loaning money to government owned corporations. Having the borrower and lender essentially one in the same. This is the ultimate ponzi scheme and it is going to blow up at some point...
    hullexile likes this.

  9. #39

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    Quote Originally Posted by Mamba:
    [/SIZE]

    Absolutely agreed.

    My grandfather always told us to "smell the wind" see which way it was blowing and what it was bringing with it.

    I smell a global shit storm.
    Agreed, but how to prepare for it? Buy land, farming equipment, seed and a shitload of firearms?

  10. #40
    Mamba
    Agreed, but how to prepare for it? Buy land, farming equipment, seed and a shitload of firearms?
    Go the full zombie apocalypse route? I'm not sure. I have a good friend here in HK who is a proper prepper, some of the stuff he's doing makes sense, some doesn't, I mean really doesn't.

    Guess when it comes down to it buying land only makes sense if you can get to it. Alright having a plan to go to the Winchester but how do you get there from here? If your bolt hole is on the other side of the world, that's a lot of garden walls to hop.

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