China's Terrifying Debt Ratios

Many of you know that I work in the financial services industry....meaning I help people figure out their money.  I have heard numerous times from my peers over the past handful of years, "China is going to be the engine that powers the USA, because we will sell them EVERYTHING they need to bring 1 billion people into the middle class!"

Hmmmm.....but what if it turns out that China is a big house of smoke and mirrors?...just like so many other nations who believe they can print and borrow their way to prosperity?

The China-US sorpasso is looming. I do not mean the much-exaggerated moment when China’s GDP will overtake America's GDP – which may not happen in the lifetime of anybody reading this blog post – as China slows to more pedestrian growth rates (an objective of premier Li Keqiang.)
The sorpasso may instead be the ominous moment when China’s debt ratios overtake the arch-debtor itself.

I had presumed that this inflection point was still a very long way off, but a new report from Stephen Green at Standard Chartered argues that China’s aggregate debt level has reached 251 per cent of GDP, as of June.

This is up 20 percentage points of GDP since late 2013. The total is much higher than normal estimates, though it tallies with what I have heard privately from officials at the IMF and the BIS.

Total debt levels in the US are 260pc (if you assume that the Fed will never unwind QE, which I do). So unless the Politburo gets a grip very fast, and this too would be dangerous, it may catch the US by next year.

This does not mean that China is about to crash. It has a state-controlled banking system. Therefore any bust scenario will play out in a different way, probably through much lower growth and two decades of Japanese-style extend and pretend.

As the BIS implied in its annual report: almost the entire world has now been drawn into the Ponzi scheme of unsustainable debt.

We can inflate some of it away, or we can deflate into defaults and creditor haircuts. Pick your poison.

Here; http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100027691/chinas-terrifying-debt-ratios-poised-to-breeze-past-us-levels/ 

Did you catch that????...."As the BIS implied in its annual report: almost the entire world has now been drawn into the Ponzi scheme of unsustainable debt.."

Cool!  There is someone else out there calling this whole financial situation a Ponzi scheme!

Now please remember, I DO believe that the entire world is going to collapse and that riots are going to break out in every major city and that we will all take root in our bunkers as we horde our food and bullets....BUT...I do not believe that that will happen before the rapture of the church.

Why?

Because Jesus said that people will be carrying on their day to day activities, marrying, planning a wedding, eating and drinking, etc....until the Day of the Lord drops on them like the flood water fell on the people in Noah's day. (Matthew 24)

Of course this HAS to be a passage about the conditions before Jesus comes for his bride....because it CAN'T be a passage that explains the conditions during the Great Tribulation, (that precedes Jesus' 2nd coming) because people of that day will be terrified, starving, dying of thirst, wishing they could die and hiding in the cracks of mountains as they try to keep their heads attached....certainly NOT the conditions that will precede the rapture.