Thursday, June 23, 2016

Has China Reached Its Debt Limit?
Mises Institute posted essay starts off by pointing out that 1/2 of the world´s economies (emerging and the developed) are seeing a slowdown in their economic growth .. "This could potentially be a sign of a new global crisis. Are we at the doorstep of a new global recession?" .. analyzes China on its debt situation to explore the possibility of a financial crisis resulting from a potential peak in credit leveraging in China .. "The private sectors of the strongest world economies are not experiencing excessive debt as was the case from 1999 to 2008. Since 2008, households and businesses are paying off their debts, and growth is being generated without having to turn to indebting themselves further. The portion of income allocated to the repayment of debts is decreasing significantly in the majority of the countries reviewed here. For this reason, it is not expected that a pause in the extension of credit will cause a reduction in demand from cyclical sectors. The exception is China, with a credit cycle that could be arriving at its end."
LINK HERE to the analysis

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