DCN (ASX) Ann: 2021 Mineral Resources and Reserve Update

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28.5¢ dacian gold limited

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Stormboy2

2,062 Posts.

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18/09/21

09:19

Post #: 56168784
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Originally posted by Greenflint: ↑

The overnight story is the sooner than later tapering expectation based on the better than expected retail spending. In the scheme of thing, this is just a noise.

The big event is yet to come and as pointed out by Stormboy2, this is the Evergrande liquidation (strong likelihood that this will happen). The Chinese government will manage the liquidation to prevent it from becoming too chaotic but nevertheless the impact of such a possible liquidation is still very consequential to the Chinese economy and to the world economies due to its dependency on the huge debt load (close to US$300T exposure) to function.

The Chinese real estate sector constitute 10% (~US$2T worth) of the Chinese GDP. Evergrande is the largest real estate developer and a fall of such a big company with such a big debt of US$305B will impact on home buyer confidence, liquidity for developers, further exposure of more of the debt-ridden developers, impact on the suppliers of construction material (even Australian iron ore will be impacted), the off-shore bond holders of up to US$20B (I wouldn't think that the Chinese government will do much here to cushion the exposure), etc....... The net result is looking like China may enter into a recession. If so, the implication for the US stock market(perhaps trigger by the US$20B bond loss: I suspect that, the bond owners are mostly from US) will not be insignificant. The reckoning on the huge debts will come and Evergrande may just be the trigger.

Time will tell.

Cheers.

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DCN Price at posting: 21.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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