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Tag: Chinese Banking System

Gaps are Appearing in the Gold Market

Gaps are Appearing in the Gold Market

The gold market continues to act as if the forces of supply and demand don’t exist. The number of claims per ounce of gold stored at COMEX’s vaults have reached a high of 110 per physical ounce. Meanwhile, record levels of physical gold have been flowing into Hong Kong and Shanghai. One of the biggest sellers of the yellow metal to Chinese buyers has been the well publicized GLD ETF, which has been selling off its physical holdings. Numerous other…

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Chinese Debt; The Looming Crisis

Chinese Debt; The Looming Crisis

2.6 trillion yuan, or around $0.5 trillion of Chinese non-financial corporate debt is expected to come due during 2014. This figure includes principal repayments and interest and is the largest figure on record for Chinese companies. Last year gear ratios among non-financial Chinese companies reached 93%, while the average across Asia remained below 70% and has done for the past decade. But with so much debt coming up for repayment, Chinese companies are facing an increasingly hostile lending environment. Back…

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China Saved the World in 2008 but now it’s About to do the Opposite

China Saved the World in 2008 but now it’s About to do the Opposite

China is getting the world’s attention again. Unfortunately, this time it’s for all the wrong reasons. Earlier this month, shock waves rippled through the financial market after the Chinese overnight interbank lending rate – Shibor – surged to 8.29% from 5.98% literally overnight. Shibor is a useful proxy for liquidity in the Chinese credit markets and like Libor in Western markets, a sudden spike signals a reluctance between banks to lend to each other. ┬áThis could be for a multitude…

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