Sunday, August 12, 2018

Trouble rises for the tyrants in China and Turkey

Social Unrest Breaks Out In China After "Panic" Bank Run On Peer-2-Peer Lenders.

Outstanding loans in China on P2P (peer to peer) platforms rose 50% just last year to total Rmb1.49 trillion ($215 billion) - making the size of China’s P2P industry far bigger than in the rest of the world combined - and due to their lack of collateral, interest rates often are as high as 37%, with additional charges for late payment.
P2P, in which platforms gather funds from retail investors and loan the money to small corporate and individual borrowers, promising high returns, started to flourish nearly unregulated in China in 2011. At its peak in 2015, there were about 3,500 such businesses.
But after Beijing launched a campaign several years ago to defuse debt bubbles and reduce risks in the economy (a campaign which recently reversed once the Trump trade war started getting hot), including the country’s enormous non-bank lending sector, cracks began to appear as investors pulled their funds.

It was only a matter of time before social unrest spread as Chinese investors who had funded these usually small, unregulated P2P operations, found they had lost all their money demanding a bail out.
That's precisely what happened... except for one thing: Beijing was already one step ahead of the protesters.
Take the case of Peter Wang: as Reuters reports, Wang was asleep at his home in Beijing last Monday when police officers arrived before dawn to detain him, saying he had helped organize a protest planned for later that day. Peter wasn't alone, and across Beijing, others who had lost money investing in China’s online peer-to-peer (P2P) lending platforms - including some who had traveled from half way across the country - got similar visits from police.

What is surprising, is just how worried about the prospect of widespread social unrest Beijing was: even after the demonstrations were effectively snuffed out, hundreds of security personnel patrolled around CBIRC’s office, "highlighting authorities’ sensitivity to any form of social instability" according to Reuters.

As I've said, Communist China is a far more brittle country and society that we in the West imagine.  More economic hardship is on the way unless the leadership in China cuts a deal with Trump to defuse the trade war.  Trump has all the leverage, he's more than willing to use it, and it really is just a question of when the Communists give him what he wants.  Or, he'll get it when the illegitimate Communist government collapses in a fashion similar to what happened to the USSR once Reagan pushed them over their limit.

Meanwhile, in another poor nation burdened with a dictator - or wanna be Sultan in this case - the clock is fast ticking down to disaster.

Turkish Lira Crashes Through 7 As Erdogan Threatens To Unleash "Plan B Or C..."

When you're down to plan "B or C," your goose might just be cooked.

Following emergency bank meetings and numerous pleas by Erdogan for Turks not to "pull FX out of their banks," blaming the country's current economic crisis on America, the Lira has opened massively weaker - crashing below 7.00 per dollar for the first time ever.

'B' stands for 'Block' capital outflows and 'C' stands for confiscation of gold and dollars.
Reuters reports a low level of 7.22 - all of which implies the Turkish banking system is done.
As Goldman Sachs warned,  further lira depreciation to 7.1 would erode all of Turkey's banks' excess capital.

The pressure is rising on Tayip.  The only question, as with China, is when does he break and give in to Trump?  Or, does he he stupidly hang on too long and suffer the Romanian solution?

The two tyrants, the Sultan and the Emperor, should watch this carefully, as it might be their future if they don't think clearly and quickly.


  1. China is brittle. I don't know if this is the tipping point. I don't think that's the case. But it underscores how dependent they are on continuing American largess to fuel their expansion. And with all bubbles, they pop eventually.

  2. This is what the 'deep state' Traitors in the U.S. need to Face - the Disrespect of their Humanity as they are Shot Down like Rabid Dogs.

  3. There is a little list of people I'd like to see standing in front of a wall when the guns fire.

    The list includes a Manchurian president and a couple of traitorous Secretaries of State. "I have a little list; they never will be missed."


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