Doug Noland: The Perils of a Resurgent China Credit Boom

This is a syndicated repost courtesy of Credit Bubble Bulletin. To view original, click here. Reposted with permission.
There’s this uneasiness – an eeriness – in the markets; in the world (I’m not touching politics). Seemingly out of nowhere, the U. S. dollar index surged 1.7% this week. Notably, the Chinese currency fell 0.8% versus the dollar, the biggest weekly decline since January. Copper dropped 2.4%. Most EM currencies were under pressure. I suspect fears of heightened Chinese vulnerability have again become a major force behind unstable global markets.
We’re all numb to the big numbers. China’s debt has rapidly inflated to over 250% of GDP (Bloomberg at 247% to end ’15 from ’07’s 150%), in what has evolved into history’s greatest Credit Bubble. Total Social Financing, China’s aggregate of total Credit (excluding government bonds) is on pace to expand almost $3.0 TN this year. A headline from Bloomberg TV: ‘China’s Total Debt Grew 465% Over Past Decade’

This post was published at Wall Street Examiner by Doug Noland ‘ October 15, 2016.