Is The Chinese Economy Just One Big Bubble?

Zero Hedge: The Real "Helicopter Money": Since 2009, China Has Created $21 Trillion Of New Money, More Than Double The US

Back in the days of the Fed's QE, much of thinking analyst world (the non-thinking segment would merely accept everything that the Fed did without question, after all their livelihood depended on it), was focused on how massive, and shocking, the Fed's direct intervention in capital markets had become. And while that was certainly true, what we showed back in November 2013 in "Chart Of The Day: How China's Stunning $15 Trillion In New Liquidity Blew Bernanke's QE Out Of The Water" is that whereas the Fed had injected some $2.5 trillion in liquidity in the US banking system, China had blown the US central bank out of the water, with no less than $15 trillion in increases to Chinese bank assets, all at the behest of a juggernaut of new credit creation - be it new yuan loans, shadow debt, corporate bonds, or any other form of debt that makes up China's broad Total Social Financing aggregate.

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WNU Editor: I concur with the above analysis, and one that I always point out when I give a presentation on what is the real state of the Chinese economy. During President Obama's term the U.S. Federal pumped into the financial system about 3 trillion dollars. This cheap money boosted the stock market and other investments, but now that money is being flushed out of the system slowing growth and investment .... a point that President Trump makes all the time (and one that he is correct on). The Chinese Fed's QE is completely beyond what the U.S. has done, pumping around $15 trillion dollars to stimulate its financial markets and investments. How the Chinese are going to balance all of this out is beyond me. But I do know that the current trade war is going to cripple China's ability to balance its books if this continues, and the resulting crash will have global implications. And as for those who think China will one day be a reserve currency .... I say dream on. This type of policy all but guarantees that China will never be trusted to be a reserve currency.

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