china facing a debt crisis???

The Australian dollar has fallen against the USD due to weakening iron ore and copper prices this is due to a another emerging debt problem within China (this is why AGO and FMG share price has been getting smashed lately) with the AUD falling against the USD this increase gold prices in australia as Gold is traded in USD. This is very evident by the release of declining GDP % in China which indicates a slowdown. Hence with the falling AUD/USD which will be good for Gold and NST.


Audio (Very Good) a MUST listen about the chinese debt problems at the moment.

http://www.abc.net.au/news/2013-05-31/chinese-economy-in-danger-from-alarming-corporate/4726464?section=business



Article from the business spectator

Extract

China’s problems are not as widely recognised and the advanced signals are confused – at least, until now.

You may remember that the 1997 Asian Financial Crisis could have been recognised by travelling to Thailand or Indonesia and discovering that they were borrowing vast sums in US dollars with no currency hedge. That practice had to end in grief and it did.

The US meltdown was discoverable by going into the American housing markets and seeing that unemployed people who had no hope of repaying loans were being advanced money. That practice had to end in grief and it did.

Europe’s crisis could have been seen by a short visit to Greece (or similar countries) and discovering they were borrowing money they had no hope of repaying. It would have the same outcome as Asia and the US.

In the case of China we are now also seeing an advanced warning. I have not been to China recently but at last week's ADC China summit and the Patrick Chovanec KGB interview that followed, the warning was signalled – the secondary banking market in China is borrowing short-term at interest rates of above 8 per cent and even 10 per cent. Vast sums are involved. That is an unstainable rate and shows that there is a deep problem that has yet to surface.

China’s secondary banking market and many other parts of its banking system have borrowed money to undertake uneconomic investment and, to continue to finance those investments, unsustainable rates of interest must be offered. In Australia we know where that practice ends – companies that undertake such borrowing can’t service their debts and fall over.

http://www.businessspectator.com.au/article/2013/4/29/economy/grief-will-steal-chinese-miracle