Liquidating your 401k account
S&P Global Ratings and Moody's Investors Service both downgraded China's sovereign rating this year over its continuous and intractable buildup of debt.It is evident that China needs and wants to deleverage-at least for right now.But in the past, China's solution to indebted SOEs has been to merge them into ever-bigger ones, or infuse small amounts of private capital while keeping these monstrosities firmly in state hands.The IMF isn't the only one who is on to China's debt shell game.Given these painful imbalances, is it really credible to believe the air can be gently let out of this debt balloon with impunity? This means Xi Jinping will have to abort this latest attempt very quickly, probably once the Shanghai Composite Exchange breaks below 3,000. Governments and central banks will never voluntarily be able to extricate from the humongous debt and asset bubble traps.This is because the global economy will descend into a deflationary depression without their constant heroin injections.
The new regulations will set leverage limits for Asset Management products, prohibit investors from pledging shares as collateral to obtain financing, and will discourage financial institutions from providing investors with implicit guarantees against investment losses.
In order to better handle the mounting National debt, the Treasury Department has announced new plans to ease pressure on long-term interest rates by shifting bond sales to the short term.
This program will increase the shorter-term and reduce the share of longer-term debt issuance, which is a significant departure from the former strategy that favored locking debt service payments at historically-low, long-term rates.
But it's not just Asia that leans on Communist Debt; China is Europe's and the United States second largest trading partner.
The rise in China's debt grew from trillion in 2007 to nearly trillion today, which happens to be the greatest increase of debt in the history of the world in any ten-year timeframe.