Collapsing Global Economy, Imploding Financial System: China Has Only One Option – Bill Holter

The title is of course a little misleading because China has many options, none of which except one in my opinion will actually work.  Options to what exactly you ask?  Options to a collapsing global economy and an imploding financial system which will surely affect China as much as anywhere else, but with one caveat.  I take these events as a given, others do not but betting against an outright panic and global bankruptcy is betting against pure mathematics itself.

Let’s back up a little bit and look at where China is currently.  They are the second largest economy in the world (maybe the largest, we can’t really know because the numbers here, there, and everywhere are made up).  China is by far THE largest manufacturer in the world and also an enormous exporter.  China is also in a three horse race as to who owns the most U.S. Treasuries with Japan and unbelievably the Federal Reserve itself.  They have an oversized shadow banking system which has already been shown as fraudulent in several cases regarding copper, zinc and lead as “collateral” (or not).

The Chinese also have a stock market bubble boiling that makes the tulip craze look tame.  Because of sheer size of the country, they are opening something like four million brokerage accounts per month.  In recent days they have had several stocks hit new highs only to drop 50-60% or more in just one day.  In fact, they had one company stock hit a new high and then go to ZERO the following day because it was discovered their books were cooked to a crisp.

We also know China is a huge importer of gold AND the largest producer of gold in the world.  NONE of their production ever leaves their borders.  There have been estimates of gold tonnage held by many.  Alisdair Mcleod believes they may have 25,000 tons or more, I personally believe it is possible if you include legacy or “elders” gold.  Others believe the number is closer to the 5,000 ton range.  My belief is that 10,000 tons is a justifiable number and very easily proven, if this is true, much of it had come from the U.S. and other Western sources and thus depleting the reserves.

Read more