Monday, September 19, 2016

International finances are crumbling.

At the bottom of the trouble is indebtedness. It shows in the valuation of the banks and debt in general.

Let's start with China.
The total credit issued by China equals 255% of its GDP. Outstanding loans are $28T. Chinese corporate debt is 171% of GDP. Unless China can revalue its gold, it will drown in debt.

Japan is bankrupt. Its debt equals 251% of its GDP.

Oil producers are on shaky grounds as the Saudis have driven the oil price into the dirt so oil producers are going bankrupt. Venezuela and Nigeria are experiencing hyperinflation.

Things are no better in Europe. Greece only survives with bailouts. Its debts to other European countries are counted as assets. In reality, that money is gone. Gold price is up 80,000% in Spanish money.

Italian banks are also on shaky grounds.

The strongest country in Europe is Germany. Its flagship bank (Deutschebank) has $1.5T on its balance sheet, but has only $68B in assets. Its stock is valued at $15B and it owes a fine of $14B. The bank has $60T derivatives outstanding (that is funny money). Deutschebank's stock is down 88% since 2007. Other bank stocks are down as  well. Citigroup is down 92% while Barkley's is down 99%.

The US leads the parade. Out national debt is nearly $20T, over the 100% GDP figure. The Stock Market is overvalued at a PE of 28, kept there by low interest rates. If the FED raises interest rates, this house of cards will come crashing down.

No comments:

Post a Comment