Cash, Dollar Crunch Returns: Bankers Begging Friends for Deposits on WeChat
Another cyclical slowdown in China looks to be underway. December’s FAI went negative yoy and now an anecdote pointing to another cash crunch in the banking system…
The annual deposit war is particularly fierce this year. The last day of January in the [WeChat] friend groups, bankers “beg” for deposits one after another.
“There are more than 20 banks looking, every one is asking for deposits.” a listed company’s small partner told reporters that he had been too busy to reply, however… “Perhaps because the New Year approached, company payments are more numerous, bank account capital is less, bank competition for deposits is even more intense.” A banking source told reporters bluntly, these days are quite difficult.
“Early this year, due to the strong demand for credit, debt problems continue to simmer, more banks seek deposits…” The Chinese banking system is starved for dollars… All those “dollar” balances that were surely sitting in Hong Kong perhaps just waiting for year-end were moved almost all at once…
The news at the end of January tells us whatever stress sent the Chinese rushing at year end is still pressuring the financial system…
Takeaway
China bought two years with its 2016 reflation, aborting a global slowdown stemming from its last decision to slow credit growth. This growth cycle has completed and is turning down again…
If this keeps up, we may soon hear about a dollar shortage in China, which happened last time the yuan spiked. Also, after the 2011 drop, forex reserves fell.
It will only take a small marginal change in the economic trends to create a hurricane force in the financial markets. Once the market moves the other way, the shift will be swift and brutal because everyone is on the other side of the trade. How many people out there have puts on the yuan and expect China’s reserves to start falling?
If history rhymes, there’s going to be some significant negative news out of China in March. If that happens, the clock will start ticking on the next global deflationary wave.
No telling what this will do in the US if it happens. With the God Emperor, the US is well situated to meet any challenge as best as possible.
Still, we are living in a global economy which is wholly dependent on the perception that money can just be borrowed endlessly, and there will never be a shortage that one should horde money for, and save up for. Most items today are designed to be bought and discarded, and are priced accordingly, most people’s psychology is designed to never worry about quality, and nobody asks where the money goes. We know that cannot last forever.
It is all so aberrant that we are seeing human psychology change in response, in ways that are almost unimaginable. We are welcoming rapists and murderers into our nations, celebrating child sexualization and abuse, and castigating the loyal as evil. It is unlike anything we have seen in history, save for rare periods preceding times of mass destruction like the collapse of the Roman Empire.
I want to say, if the Deep State is about to be taken down by the God Emperor, expect ITZ to happen at exactly the right moment to try and thwart Trump. And yet, nothing would take down the Deep State like ITZ hitting, and then everyone finding out the entire system was rigged by some ultra-secret elites all along.
If they are smart, they will be propping things up as much as possible for as long as they possibly can.
Tell everyone about r/K Theory, because what goes up must come down
https://m.youtube.com/watch?v=xySOFEMR9n4
Not related to the post, sorry for that, but this is a redpill to big to not share everywhere.
They aren’t too smart.