Today's Topic: Global real Estate Implosion lead by China from 2018 !
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I wrote many times previously about history's biggest global real estate crash is coming to town from 2018, lead by China.
This is mainly due to China's massive shadow banking system and credit given to risky but poorly managed investments.The tune is now up to 34 trillion today, larger than the well known US government debt of just 20 trillion.
Watch from 2018, where history will be remembered for the Biggest Global Real Estate of human mankind on earth, lead & only achievable by China.
The days of non stop Capital gains are but over once the PANIC Chinese rich & wealthy starts to dump all their global properties in their bid to bring liquidity to store up their credit back home.
Those still whom not get it, don't listen, ignorance or simply believe such a scale will never happen, can do so at their own demise.Don't say no one tells you in advance about this !Here is an article I strongly believe set the stage for this coming global event.
Thank you.David Lim. 13 Jan 2017
I agree that the price growth rate of Chinese real estate is unsustainable. However, another side of the equation is the value of fiat currency. In China, the Yuan is pegged to the US dollar in a floating peg exchange rate mechanism. As long as China depends on USA and the dollar as a reserve currency the government will continue creating new RMB to buy the dollars and maintain a favorable exchange rate advantage for exports. The Chinese gov is currently working on import substitution to increase domestic demand and reduce its dependency on exports to "developed" countries.
I suspect that the real estate will not implode in a USA style 2008 crash but rather lose value in terms of purchasing power as real estate fails to compensate for the erosion of RMB and USD value due to inflation. For the Chinese, there are few choices with so much cash. Gold and silver are much more illiquid than real estate and can't be rented out. I do expect to see some downturn in the big cities where prices have risen dramatically but keep in mind that Chinese have a large equity position in real estate. It is not like the zero down loans in the US. People have been calling for a real estate crash in China for almost 10 years now and it continues to rise. I believe it is more or less a vote against the fiat currency system and eventually other sectors will catch up rather than real estate crashing like it did in USA.
Thanks for your post. It is a great topic.
Yes, I fully agreed with you. China still have lots of financial ammunition because she has no debt and can still go into debt to finance its growth. What likely may happen is some kind of unexpected crack in the Western Financial System that spin out of control, caught Central Banks by surprise and tumble out of control. This I see coming after 2018 if the world runs into a Depression and there are no savious this time around.