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Money is Fleeing the Ultimate Crony Capitalist State, China, and it is Destabilizing
(Before It's News)
China is not such a good place to keep money medium to long term as it turns out. The wealthy in China are “deeply distrustful” of policy makers. As such many are getting out of China if they can. Beijing is concerned, probably panicking in light of all of the money which is flowing out of the country. And as China is in many respects a black box (perhaps a grey box) people with money can only assume that things are bad and so that compounds the Chinese “problem.”
The Chinese economy, which was, we were told a shining example of “state capitalism” is in significant distress. Not that the world even at this date really knows how much distress. Restricted prices, economics by decree, all sorts of malinvestment encouraged by unwise monetary policy, insider dealing which alienated the emerging middle class, all of it has led up to the current economic challenges.
This is what central planning always brings eventually. But maybe everything will spring back with the daffodils in a month. Maybe.
Here’s to the Year of the Monkey.
(From The Sydney Morning Herald)
Capital outflows leading to the exhaustion of China’s foreign exchange reserves are a bigger trigger for a hard landing in the Chinese economy than its enormous pile of debt, warns one of Australia’s most prominent fund managers.
China reported a lower-than-expected $US100 billion drop in the value of its foreign exchange reserves on Sunday, reducing its stockpile to $US3.23 trillion last month, the lowest level since May 2012, according to central bank figures.
That rate of depletion is slower than it was in December, when China spent a record $US108 billion defending its currency.
Even though Beijing is seeking a weaker yuan, it has been forced to prop up the currency by selling US dollars to avert a sharper collapse.
http://www.againstcronycapitalism.org/
Source: http://www.againstcronycapitalism.org/2016/02/money-is-fleeing-the-ultimate-crony-capitalist-state-china-and-it-is-destabilizing/
