China can’t afford to have a renminbi meltdown. Contrary to popular belief, the Communist Party needs a strong RMB to purchase the oil, gas, food, and basic materials that it desperately needs EACH AND EVERY DAY. They use USD but the artificial RMB/USD rate that’s carefully 1/5
https://twitter.com/chinadaily/status/1562248327575441408
Manipulated by the PBOC each day is very important to China Inc. The fact that they have charged a key propaganda outlet @ChinaDaily with delivering this message to the market evidences China’s fear of a meltdown.They must be very worried given the fact that despite rare cuts 2/5
The consumer credit impulse continues to plummet. Household debt to discretionary income now exceeds US levels just before the global financial crisis. Chinese GDP is currently plummeting due to sales volumes and price declines of real estate (which represents the core 3/5
Engine of Chinese GDP). My sources tell me the central planners are having significant difficulty understanding the divergence between private sector credit contraction and public sector borrowing. Housing sales are already down over -30% while reported prices are down -7%. 4/5
If the private sector debt burdens have reached their theoretical limits, expect housing sales to fall below -50% and price to drop more than -15% by YE. This scenario takes Chinese GDP to zero or lower (if they dare print the truth). #China #ChinaExposed #LookOutBelow 5/5
• • •
Missing some Tweet in this thread? You can try to
force a refresh
