GFC-II time bomb is ticking. It goes like this . . .
The debt bubble is fully inflated and can only do one thing from here => bust! This is because in the end, a house is only worth what people can afford to live in it, and a business is only worth what it can produce.
Many companies in China have stopped paying their workers because of the coronavirus shutdown. Most are insolvent anyway and only propped up by an artificially stimulated economy.
China's productivity has been declining since 2012. This should not happen outside a crisis and during periods of government spending and stimulus. This indicates the economy is broken and propped up.
China's banks are exposed and hold a command-and-control grip on the global banking sector.
The China slowdown and the coronavirus will hit the Eurozone first with less demand for their products. Contagion fears will stop tourism making the EU hit a double whammy.
The EU banks are as weak as water and full of toxic debt. QE (i.e. forced lending) has put bank finances into risky and more risky assets, with lower yields and held by more risky non-performing borrowers.
The slowdown means many highly indebted firms will default and the ratio of non-performing loans (NPLs) will explode causing many banks to become insolvent.
Cascading mistrust between banks triggers another GFC and no amount of artificial central bank liquidity will hold up global asset markets.
A global collapse follows and there will be very few places to hide.
