Joe, is any country doing anything right? Is any government making good decisions? I would love to see a video on some country, any country, with good news and why.
Great channel - but please don’t promote nord vpn, they are absolute garbage, and the worst customer service - they are a nightmare to work with, never again
Also consider that China’s actual GDP once you remove the malinvestment and other padding is thought it be potentially 50% of what it really is, which means the debt to GDP ratio could be as high as 300%. Also consider that a lot of “private” debt isn’t included in this count, when it really should as the CCP are so heavily invested in them that they are private in name only, and are actually SOE’s. A lot of this debt is also hidden.
I do wonder how that plays out as debt per person, however. Population size is vastly different, so the debt per person is probably much much lower for China than the US. And the next five years are totally up in the air, so looking into the US future is highly variable.
@@amcg7546The problem with this is it cuts both ways. Cause GDP per capita is also substantially reduced if you want to factor in the larger population. If you’re consistent with the application of debt and GDP then they’re in a world of pain, it’s hard to massage the numbers.
The USA can print more dollars than the Chinese authorities could print Yuan ... The US economy is more open to international investments than the Chinese economy ...
@@amcg7546Trump, the person with 3 assination attempts and multiple indictments for election interference is back in the white house, more tariff for CCP are in the works if you ask me
When you began to cover the Evergrande disaster and we found out how the local governments were funding operations, I think we could all see that this was going to become a problem.
Good question….Ive often wondered myself. As the US is the biggest economy in the world and also has massive debt it can’t be them lending people money…….so I too wonder who it is.
@@missinglinqespecially if it's built quickly and poorly just to get high churn out rate to keep tapping into the money being pumped into the industry
Wonder exactly who the Chinese government thinks is going to buy these bonds? Think China will continue to bump along and even excel in some provinces and industries. Tough times for some Chinese citizens.
The problem with that is the regional governments have no requirements nor the desire to assist the poorer regions. You see this in how the Three Gorges is operating. The dam's management has no problem flooding the regions downstream.
its not about how its going now its about the fuvkn investments, since 2005 only they already invested 2.5 trillion in littarly any rare earth mine in the world also in technology. china has 18 trillion gdp while china was focusing on spending hundreds and hundreds amd hundreds of billions in modernization of the military and have biggest navy and almost same lvl US military tech.
Hi Joe, a great video again. I’d be interested on your view on the effects of Chinas economic slow down has on a wider scale, particularly the decreased Chinese oil demand and how that effects both oil producers and oil consumers
One thing I noticed while traveling in China is that everywhere restaurant and business owners say the same thing: "Business is way down compared to pre-COVID and many business have closed down." That made me ask if the reason is there are also a lot less people. It turns out it makes more sense if the real population today is only about a billion or even less.
Agree, it would be better to aim an ideal standard of living for the people and base your policy decision on the principle of maintaining that standard of living. the idea of top down economics didn't work greed for profit is the overwhelming factor of economic policy nowadays.
Rapid growths on all fronts, including Debts-GDP (itself fake) ratio. Phenominal when you ignore the debts growth which outpaces the fake GDP growth. The trend is a blessing in disguise to the people, paving the way for democracy.
I'd love to believe that about democracy. But good Lord, aren't we learning from Russia? The people in those dictatorships can never unseat the dictators. Hitler is the only one I can think of. Maybe Napoleon. Both of those men could only be deposed through military defeat by foreign nations. ( Looks like Putin too must be defeated in war; another story.) No. China is a bad bad problem that ' ain't going nowhere'. (Actually, you and I more or less agree.). And there's four times as many of them. to make it all tougher, Chinese people are not barely functional drunks like so many of the Russians. But it's also true: in the cases of Hong Kong and Taiwan we see there ARE some freedom - loving Chinese souls. But God help them against a murderous tyrant likePresident Xi.
Fortunately, you didn't have the US Democratic party making the rules and stealing your tax dollars. From the last count, our debt was 36 trillion. Count yourself lucky. We will never be able to be debt-free again.
How is that low? You only have around 30 million people. You just don't have problems yet since your "country" is still a colony. But in the near future, expect inflation and an increase in debt.
@@mladendjukic1061 1 trillion is actually good compared to china, russia, u.s, india an etc. thesse big countries are struggling an will burst if not careful. spending too much between gaming ips, tech, spacex, tesla, electric, warfare, military, robots, drones an etc. its becomes dangerous when reaching in the dozen trillions of debt. australia is in a better position to recover oncee they choose the right leaders.
Does the amount of "local government financing vehicles debt" include any kind of those "commercial papers" you mentioned back in 2021? Those papers obviously were related to corporate debt, but I wouldn't be surprised if they were circulated to the local authorities as well.
The hard part in getting a handle on China's situation is that we don't know how much government debt is actually outstanding. Given the frightening demographic crisis they face, and that there are no assets behind a lot of that debt, even the 117% number is frightening.
Ironic that while directly questioning the CCP's official numbers for local debt as being only one tenth the actual IMF determination (and I personally think even that's way too low), there's not one word about the CCP's gross manipulation of GDP data (which could be overstated by as much as 40%), or that much of the 'infrastructure' spending propping up its GDP is for projects with negative returns (meaning that the country gets zero benefit from paying for them), or that China is in a recession and it's GDP will be lucky to achieve even 2% real, sustainable growth for years to come. That's quite a hole they've dug for themselves. And the likely collapse of their banking system due to all the bad real estate loans on its books will make the 2007/08 recession here look like a picnic.
China sells twice as many cars as US, the same goes virtually for any product you name it, from food to house appliances. While its might well be true that China cooks the GDP figures, the definition for GDP is obviously different in US than in China.
@@tonychen7757 No question about the relative volume of cars sold. The only question is when will CCP run car companies actually make any money on the cars they make and dump overseas. And the definitions of GDP are the same--its just that the CCP cooks the books even more than our bean counters do (while using bogus CPI deflators to keep from having to report the recession that started in the US about a year ago). You might want to research how many airports and train stations were built by the CCP than have been closed because there's inadequate usage to even justify basic operating costs. It's like digging holes and then filling them in to increase 'production' for GDP purposed (and allow graft by CCP leaders).
If you've taken a loan of 10.000 dollars you have a problem. If you have a debt of 10 billion dollars, the debtors have problems. This applies to China, too.
@@joesmith3590 A government is like a person in that it needs income, so governments pay for their funding from future taxation of people and businesses. Countries can get away with this borrowing if the population is growing and productivity increases, but in China's case, the population is expected to decline significantly so they will need a proportional rise in productivity to compensate. That's why they are investing heavily in robotics-based production for exports and why they need the 'belt and road' expansion to succeed.
I believe you have said that local Chinese governments are not allowed to tax. If they cannot technically issue debt and once the salable land runs out, how are they supposed to finance their operations? Stipends from the central government?
Debt does not have same impact for a nation as for businesses. China is the second largest economy in the world and if it should break down, the impact on the world would be devastating. Trouble in China is at a different level and that is scary for China and that is empoyment rate and demographic crisis, employment down, reproduction down and the elderly rising fast.
The only difference between nations and business is that nations can print money. But even here there are limits. If a nation inflates the currency, there are consequences. You are correct that economic developments in China can affect other countries. Some are negative, but not all. China's huge balance of payment surplus is a massive transfer of wealth to China. Reducing that surplus could have positive impacts on many countries. Many countries would benefit economically, his is especially the case because of China's unfair trading policies.
One thing not mentioned in the USA comparison is the huge amount of local and state gov't debt. SFAIK, this is not included in the present $36 trillion figure that is bandied about. That doesn't unfunded liabilities in the USA. I recall stumbling into, some years ago, a listing of the 100 most inadequately funded local gov't pension funds in Illinois. Most were under 50% funded.
The massive amount of money to print up to cover these financial buffers affect the true value of the yuan...... Which is worth around a nickel now....and dropping.
The difference between US debt and China's is that we aren't reliant on land sales to make payments on it. Their old debt relies on LGFVs refinance to keep from defaulting and that's what the 1.4T USD bond bailout is. No land sales means no refinance and increased local revenue to make the higher payment on unproductive debt. The local debt is mostly dead weight from overcapcity and public works to generate temporary GDP. All of this temp. GDP was done to attract foreign investment. All going in reverse now. China will become Japan.
Most financially aware people know China has real-estate and local debt. China also but all domestic corporate debt, all domestic stocks, and has major industrial infrastructure investments that will pop. The world is slipping into a globally synchronized depression. As job loses mount, currency and bond moves reflect risks aversion.
Wars and threats of war, along with the more or less constant fear of another pandemic, mass population movements, environmental degradation and Trump (the cherry on top,) I think we're looking at some strange mosh-up of movie scenarios: "Soylent Green" meets "1984" meets "THX 1138." I fear for the future of mankind and am almost happy I won’t be around to see what could have been a bright future destroyed.
It’s called the Chinese government print money like it’s going out of style or rather like rabbits breeding if you want another analogy 😂. USA’s been doing this since Covid tbh but not even remotely close to the same scale. Anecdotally I have heard it is not uncommon for people in China to receive bills that have the same serial number as bills they already possess! 👀 If true that will quickly lead to a huge devaluation in the currency as well as the local populations faith in it. Coincidentally the local populations faith in the yuan is at an all time low and capital flight was something unheard of like $48B in the month of November (don’t know if that’s usd or yuan).
The idea that China’s GDP is $18 trillion is laughable. Most experts that I have read come within a range of $9 to $12 trillion. On the other hand, a general range for population for China is between 700 million and 900 million not the absurd 1.4 billion figure invariably put forth. That will increase the Chinese GDP per person. It is truly difficult to seek accuracy when you are dealing with a liar.
Add in to the fact that the CCPs central gov't did all those loans for the belt and road project and chances are excellent that most of that money is never going to be repaid .....
That can actually be a positive for the CCP because those loans had conditions, including assets the CCP can take if debts aren't repaid and this has been talked about many times on different channels, for instance they have a port now in another country when they defaulted. Considering the CCP has actually been SMART in this regard, I'm betting that for whatever country they made loans to, they knew EXACTLY what resources they wanted to get a hold of and for the most part its those resources that the CCP gets when the country defaults. You've never stopped to ponder why the CCP made so many loans to countries that the rest of the world is saying "that loan will never be paid back"? Yeah, the CCP knew that too.
Thanks for the forecast! I have a quick question: I have a SafePal wallet with USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How should I go about transferring them to Binance?
Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2025. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.
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Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with Stacy Lynn Staples for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
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I think national debt is one of the most misunderstood financial concepts out there, especially by those people who equate national debt to personal debt
What is the actual problem of having more than 100% of your gdp as dept? It sounds like a psychological issue and not an economic one. That doesn't mean it's a moot point. I just want to understand better.
Joe, I've followed this issue generally including your podcasts. I'm wondering about the use of developed economy metrics. I see the Chinese world being an island of development in a lake of poverty. Seems to me to be a work in progress about how their planners/leaders improvise its way forward. In short Western media analysts are using a Western/Developed model to try to figure it all out. In any real serious crises the action will be in the political realm. (see Chinese history which has often undulated between a central government, decentalized entities or years of chaos. Thanks 😊
As a fiscally conservative American, I am very concerned about the American debt. However, the USA is a safe harbor for international money especially those worried about a wider war in Europe, the Middle East, or East Asia. Very few places for profitable investments internationally. So this will artificially boost American capital investments and by extension the economy.
What you are saying that there is more debt in China (and the world) than people to be born to repay that debt. And the number of people to be born is decreasing rapidly in China. (1.6 / 2.1 replacement rate)
Thank you for your excellent video. I really chuckle at your "Joe you are talking rubbish" comments. There are so many idiots on this planet who try to be a smart ass, but they are the contrary. Keep up the good work and have a fantastic festive season and hopefully a few days without TH-cam 🙏🏻😉
It is hard to know what this debt really means. It appears to be held mostly by state owned banks. If so, it is money owed by the govt. to itself. Furthermore, Japan has a much higher debt to GDP ratio, but has not collapsed. If China follows the Japan road, as they seem to be, they will be alright for a while.
Even though Japan has high Debt to GDP to ratio, 90% of the debt is locally owned because Japanese have high rates of saving unlike the USA which has to borrow on the international market
@@terryvarta9306actually no. Most of the US debt is owned by the U.S. government itself, then by US banks and financial institutions, pension funds and only around 22% is owned by non-Americans. If you take out the debt owned by the U.S. government itself, its debt is about the same percentage as that of the UK, much better than that of Spain or Portugal or France. What these other countries don’t have that the U.S. has is a booming economy that has generated new industries.
Are you implying that it's good for China? China's currency isn't held by foreign governments for trade like the U.S dollar is. Over 60% of all trade around the world is done in U.S dollars vs 7% for the Chinese Yuan. Big difference 😅
7:00 China is the second largest economy in the world but less than 2/3 of the US. So who was predicting and how can China ever have GDP greater than the US? That was all we were hearing from the financial gurus like Ray Dalio. Oh, Ray Dalio is a salesman for his investment funds. 12:00 The fundamental problem is China's GDP is mostly made up of infrastructure spending. They just kept building. Most of the infrastructure of the last ten years was over-building and uneconomic from a utilization basis. So there is no excess revenue to pay down the debt taken out for construction. Now they are finding out economics do matter.
It’s the money laundering project for many CCP officials. They use their power to grant permission to developers and get kickbacks from developers by launching those building projects, after they send their kids to abroad and transfer money to their kids at overseas…they don’t care whether the projects are economically viable or not.
But if you add SOE, State Owned Enterprises, the debt ratio in China is even worse. The total debt that the state is "responsible for" is 309%, up from 279%. That means that for every 1% GDP, 6% is added to debt.
Are you considering the internal saving, à huge amount which couldbe incanalide into the system, bonds. This way the debts would be resolved structurally.
@@markusgorelli5278 As of November 2024, the total deposits in Chinese banks amounted to approximately 41.93 trillion USD. This includes all financial institutions and represents a slight decrease from October 20241.
China made such a big deal flaunting it's infrastructure projects, but now they will have to take out debt every year to maintain it, or else become a cautionary tale about overspending.
USA debt to GDP is nearing end of WW2 levels. The problem is, this is in an era of near historically LOW defense spending as a % of GDP, and we are already at a point where servicing our debt costs more than our defense budget. When, not if, we get in a large, costly war, we are really in a lot of trouble, economically speaking.
My concern is that if they need money, they might sell the American bonds they have to service their debt. This would transfer part of the problem to us. Of course I am not a financial expert so I could be all wet.
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Great follow up yo earlier work its a financial waste land and the money is all gone the corruption is beyond endemic
Joe, is any country doing anything right? Is any government making good decisions? I would love to see a video on some country, any country, with good news and why.
Joe you literally just got hacked again and Nord VPN didn't do anything apparently
Wait till everyone finds out that BRICS country's worthless money has been buying and propping up Bitcoin.
Great channel - but please don’t promote nord vpn, they are absolute garbage, and the worst customer service - they are a nightmare to work with, never again
Thanks for comparing Debt to GDP Ratio for China & the USA. I found it interesting.
Also consider that China’s actual GDP once you remove the malinvestment and other padding is thought it be potentially 50% of what it really is, which means the debt to GDP ratio could be as high as 300%.
Also consider that a lot of “private” debt isn’t included in this count, when it really should as the CCP are so heavily invested in them that they are private in name only, and are actually SOE’s. A lot of this debt is also hidden.
I do wonder how that plays out as debt per person, however. Population size is vastly different, so the debt per person is probably much much lower for China than the US. And the next five years are totally up in the air, so looking into the US future is highly variable.
@@amcg7546The problem with this is it cuts both ways. Cause GDP per capita is also substantially reduced if you want to factor in the larger population. If you’re consistent with the application of debt and GDP then they’re in a world of pain, it’s hard to massage the numbers.
The USA can print more dollars than the Chinese authorities could print Yuan ...
The US economy is more open to international investments than the Chinese economy ...
@@amcg7546Trump, the person with 3 assination attempts and multiple indictments for election interference is back in the white house, more tariff for CCP are in the works if you ask me
When you began to cover the Evergrande disaster and we found out how the local governments were funding operations, I think we could all see that this was going to become a problem.
Nevergrande 😫
Thanks Joe 👍
Again, congratulation for the more compact format. Really great.
Thanks!
grazie joe ottime relazioni..
Great show again Joe thanks. My question is, why have the local governments borrowed so much? Thanks
With all these countries in dept who do they owe the money to?
Good question….Ive often wondered myself. As the US is the biggest economy in the world and also has massive debt it can’t be them lending people money…….so I too wonder who it is.
@Kingcarparpeggio it must be god sitting on the moon with his huge bank counting his interest payments 🤣
The future.
@@Slickrock72under-rated comment if there ever was one but yes this and shareholders
People who buy their bonds
Great video Joe
A very illuminating episode! Warmest compliments. Thank you, sir.
Happy Christmas Joe
Thanks for many in depth & very well researched presentations on here !
Top work!
Its a fast growing economy building unneeded infrastructure that will rot away before its ever used to generate productive revenue.
The UK infrastructure is crumbling and most of that is needed, i wonder if there infrastructure will just have plants growing out of it.
so many unutilized high speed railways with stations in the middle of nowhere and airport with dismal local and international flights
Field of Dreams infrastructure.
This is actually a great point. Infrastructure is costly, but maintaining it can be even more costly.
@@missinglinqespecially if it's built quickly and poorly just to get high churn out rate to keep tapping into the money being pumped into the industry
Thanks Joe for another good video and putting another smile on my face. I do look forward to that.
Because you are China hater while Elon Musk is withholding cheques to poor people
Wonder exactly who the Chinese government thinks is going to buy these bonds? Think China will continue to bump along and even excel in some provinces and industries. Tough times for some Chinese citizens.
The problem with that is the regional governments have no requirements nor the desire to assist the poorer regions.
You see this in how the Three Gorges is operating. The dam's management has no problem flooding the regions downstream.
Their central bank. The 'loans' are just money creation to transfer local debt to the national level where it's easier to deal with.
Yes, and „some“ in this case, actually means about a billion actually …..😏
its not about how its going now its about the fuvkn investments, since 2005 only they already invested 2.5 trillion in littarly any rare earth mine in the world also in technology. china has 18 trillion gdp while china was focusing on spending hundreds and hundreds amd hundreds of billions in modernization of the military and have biggest navy and almost same lvl US military tech.
my guy, they invested so much into so many different projects since 1978 only then they had 180b gdp.
Digging the updates Joey B's, that's a lot of facts in a convenient, compressed time-frame. 🤘🤝
Thank you 👍👍
Hi Joe, a great video again. I’d be interested on your view on the effects of Chinas economic slow down has on a wider scale, particularly the decreased Chinese oil demand and how that effects both oil producers and oil consumers
The Center cannot hold
Love your work from little college town Franklin, Indiana
One thing I noticed while traveling in China is that everywhere restaurant and business owners say the same thing: "Business is way down compared to pre-COVID and many business have closed down." That made me ask if the reason is there are also a lot less people. It turns out it makes more sense if the real population today is only about a billion or even less.
Good report!! Thanks.
The absured pursuit of economic growth is destroying everything.
Agree, it would be better to aim an ideal standard of living for the people and base your policy decision on the principle of maintaining that standard of living. the idea of top down economics didn't work greed for profit is the overwhelming factor of economic policy nowadays.
Rapid growths on all fronts, including Debts-GDP (itself fake) ratio. Phenominal when you ignore the debts growth which outpaces the fake GDP growth.
The trend is a blessing in disguise to the people, paving the way for democracy.
I'd love to believe that about democracy. But good Lord, aren't we learning from Russia? The people in those dictatorships can never unseat the dictators. Hitler is the only one I can think of. Maybe Napoleon. Both of those men could only be deposed through military defeat by foreign nations. ( Looks like Putin too must be defeated in war; another story.)
No. China is a bad bad problem that ' ain't going nowhere'. (Actually, you and I more or less agree.). And there's four times as many of them. to make it all tougher, Chinese people are not barely functional drunks like so many of the Russians.
But it's also true: in the cases of Hong Kong and Taiwan we see there ARE some freedom - loving Chinese souls. But God help them against a murderous tyrant likePresident Xi.
You assert so well.
60 trillion dollar debt?!
WHAT?!
In Australia we are currently just under $1 trillion debt which is quite low
Fortunately, you didn't have the US Democratic party making the rules and stealing your tax dollars. From the last count, our debt was 36 trillion. Count yourself lucky. We will never be able to be debt-free again.
Don't worry, you will catch up with the rest of the world. 😀
How is that low? You only have around 30 million people. You just don't have problems yet since your "country" is still a colony. But in the near future, expect inflation and an increase in debt.
@ it’s low because % of gdp has nothing to do with how many people we have.
@@mladendjukic1061 1 trillion is actually good compared to china, russia, u.s, india an etc. thesse big countries are struggling an will burst if not careful. spending too much between gaming ips, tech, spacex, tesla, electric, warfare, military, robots, drones an etc. its becomes dangerous when reaching in the dozen trillions of debt.
australia is in a better position to recover oncee they choose the right leaders.
Debt is deferred taxation. Borrowing today planning to pay it back when your income goes up does not end well if your income goes down.
good episode
Does the amount of "local government financing vehicles debt" include any kind of those "commercial papers" you mentioned back in 2021? Those papers obviously were related to corporate debt, but I wouldn't be surprised if they were circulated to the local authorities as well.
Wouldn't surprise me if a bunch of them held evergrande bonds as part of their asset portfolio.
So for campirson what are the European countries gdp v dept doing?
I like that newest videos are shorter. Please, keep it that way.
Good job
The hard part in getting a handle on China's situation is that we don't know how much government debt is actually outstanding. Given the frightening demographic crisis they face, and that there are no assets behind a lot of that debt, even the 117% number is frightening.
A very interesting video, thanks for all your research.
Excellent, very informative video, thanks for sharing the 90' debt fact, right now 36 trillions current debt, total debt is 60 trillions
I'm only here for you putting a smile on my face
Once you see the statue underneath the silver TH-cam Silver Play Button award, you can't unsee it. 😁
Can’t squeeze water out of a dry rag.
Ironic that while directly questioning the CCP's official numbers for local debt as being only one tenth the actual IMF determination (and I personally think even that's way too low), there's not one word about the CCP's gross manipulation of GDP data (which could be overstated by as much as 40%), or that much of the 'infrastructure' spending propping up its GDP is for projects with negative returns (meaning that the country gets zero benefit from paying for them), or that China is in a recession and it's GDP will be lucky to achieve even 2% real, sustainable growth for years to come. That's quite a hole they've dug for themselves. And the likely collapse of their banking system due to all the bad real estate loans on its books will make the 2007/08 recession here look like a picnic.
China sells twice as many cars as US, the same goes virtually for any product you name it, from food to house appliances. While its might well be true that China cooks the GDP figures, the definition for GDP is obviously different in US than in China.
@@tonychen7757 No question about the relative volume of cars sold. The only question is when will CCP run car companies actually make any money on the cars they make and dump overseas. And the definitions of GDP are the same--its just that the CCP cooks the books even more than our bean counters do (while using bogus CPI deflators to keep from having to report the recession that started in the US about a year ago). You might want to research how many airports and train stations were built by the CCP than have been closed because there's inadequate usage to even justify basic operating costs. It's like digging holes and then filling them in to increase 'production' for GDP purposed (and allow graft by CCP leaders).
@@richardefriend 哈哈哈，希望贵国有更多你这样想的人。
@@huas5350 And why do you hope that?
China's debt to GDP ratio looks much worse when you use the actual GDP numbers more likely in the low to mid teens of trillions of dollars.
If you've taken a loan of 10.000 dollars you have a problem. If you have a debt of 10 billion dollars, the debtors have problems. This applies to China, too.
The debt is mostly to itself and its own banks. A government isn’t like a person.
@@joesmith3590 A government is like a person in that it needs income, so governments pay for their funding from future taxation of people and businesses. Countries can get away with this borrowing if the population is growing and productivity increases, but in China's case, the population is expected to decline significantly so they will need a proportional rise in productivity to compensate. That's why they are investing heavily in robotics-based production for exports and why they need the 'belt and road' expansion to succeed.
@ lol. Very YT and main stream media take. What about Japan.
What about Japan? We're talking about China here.
@@joesmith3590 Lost wealth is lost wealth!
I like the shorter format
I believe you have said that local Chinese governments are not allowed to tax. If they cannot technically issue debt and once the salable land runs out, how are they supposed to finance their operations? Stipends from the central government?
Debt does not have same impact for a nation as for businesses.
China is the second largest economy in the world and if it should break down, the impact on the world would be devastating.
Trouble in China is at a different level and that is scary for China and that is empoyment rate and demographic crisis, employment down, reproduction down and the elderly rising fast.
The path to democracy or the path to war.😊
Debt might not be a problem on its own, but it most certainly ensures dealing with other crises is much harder.
The only difference between nations and business is that nations can print money. But even here there are limits. If a nation inflates the currency, there are consequences.
You are correct that economic developments in China can affect other countries. Some are negative, but not all. China's huge balance of payment surplus is a massive transfer of wealth to China. Reducing that surplus could have positive impacts on many countries. Many countries would benefit economically, his is especially the case because of China's unfair trading policies.
every day that impact is reduced as we've been decoupling for a while now
isnt that why there is an urgent exit from china
If you want a country that is very high in foreign debt compared with GDP.
Luxembourg 4,155%
(they may have a lot of foreign money in their banks)
One thing not mentioned in the USA comparison is the huge amount of local and state gov't debt. SFAIK, this is not included in the present $36 trillion figure that is bandied about. That doesn't unfunded liabilities in the USA. I recall stumbling into, some years ago, a listing of the 100 most inadequately funded local gov't pension funds in Illinois. Most were under 50% funded.
Joe, the sycamore trees behind you , it is a reference to the black lodge portal in twin peaks ?
The massive amount of money to print up to cover these financial buffers affect the true value of the yuan......
Which is worth around a nickel now....and dropping.
The difference between US debt and China's is that we aren't reliant on land sales to make payments on it. Their old debt relies on LGFVs refinance to keep from defaulting and that's what the 1.4T USD bond bailout is. No land sales means no refinance and increased local revenue to make the higher payment on unproductive debt. The local debt is mostly dead weight from overcapcity and public works to generate temporary GDP. All of this temp. GDP was done to attract foreign investment. All going in reverse now. China will become Japan.
Slava Ukraine 🇺🇦!!!!!!!!!!
You can probably double these numbers to find the actual debt
I hope this is true
Kudos, not bad for someone who sucks at bike racing.
Having NordVPN or any of his competitors doesn't protect you from being hacked!
Kind of like hedge funds. It’ll be
Like 2007-2008
"Well...crap!" ~ LGFV Fund Mgr's
Most financially aware people know China has real-estate and local debt. China also but all domestic corporate debt, all domestic stocks, and has major industrial infrastructure investments that will pop. The world is slipping into a globally synchronized depression. As job loses mount, currency and bond moves reflect risks aversion.
Wars and threats of war, along with the more or less constant fear of another pandemic, mass population movements, environmental degradation and Trump (the cherry on top,) I think we're looking at some strange mosh-up of movie scenarios: "Soylent Green" meets "1984" meets "THX 1138." I fear for the future of mankind and am almost happy I won’t be around to see what could have been a bright future destroyed.
Who has all this money to leand to Chaina, America and all the rest of them?? Keep up the good work Joe!
It’s called the Chinese government print money like it’s going out of style or rather like rabbits breeding if you want another analogy 😂. USA’s been doing this since Covid tbh but not even remotely close to the same scale. Anecdotally I have heard it is not uncommon for people in China to receive bills that have the same serial number as bills they already possess! 👀 If true that will quickly lead to a huge devaluation in the currency as well as the local populations faith in it. Coincidentally the local populations faith in the yuan is at an all time low and capital flight was something unheard of like $48B in the month of November (don’t know if that’s usd or yuan).
The idea that China’s GDP is $18 trillion is laughable. Most experts that I have read come within a range of $9 to $12 trillion. On the other hand, a general range for population for China is between 700 million and 900 million not the absurd 1.4 billion figure invariably put forth. That will increase the Chinese GDP per person. It is truly difficult to seek accuracy when you are dealing with a liar.
Huh second to USA in debt too?
More likely USA is less indebted than China, realistically.
Hey Joe, I thought total debt was at 72Tn earler (local and national)
Add in to the fact that the CCPs central gov't did all those loans for the belt and road project and chances are excellent that most of that money is never going to be repaid .....
That can actually be a positive for the CCP because those loans had conditions, including assets the CCP can take if debts aren't repaid and this has been talked about many times on different channels, for instance they have a port now in another country when they defaulted.
Considering the CCP has actually been SMART in this regard, I'm betting that for whatever country they made loans to, they knew EXACTLY what resources they wanted to get a hold of and for the most part its those resources that the CCP gets when the country defaults.
You've never stopped to ponder why the CCP made so many loans to countries that the rest of the world is saying "that loan will never be paid back"? Yeah, the CCP knew that too.
Thanks for the forecast! I have a quick question: I have a SafePal wallet with USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). How should I go about transferring them to Binance?
Wait a minute, guys. I just had coffee at Starbucks, and they gave me some change back. I might have that in my pocket, HEHE.
It is likely twice that if you count private debt as well.
60 trillion in debt held by the Chinese middle class.
This is why consumption is down.
Haiiii main man Joe
Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2025. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.
My main concern now is how can we generate more revenue during quantitative times? I can't afford to see my savings crumble to dust.
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How can one find a verifiable financial planner? I don't mind
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Not sure that the difference between China and the US is all that significant and anyway lot can happen over the next 5 yrs. Thanks for the video
USA dentist also resulting in government fighting as there is a limit to the amount that can be borrowed and raising it always causes issues
Plus the U.S. debt to assets ratio has gone vertical over the past few years.
Oh dear, I don't even remember when a million stopped being a big number ! Now I discover its really a tiny number ! Now my brain hurts.
I think national debt is one of the most misunderstood financial concepts out there, especially by those people who equate national debt to personal debt
Hahahahhaha, let china build more aircraft carriers lol.
They are darn expensive to build and use!
@@juhajuntunen7866yes I know 😂
What is the actual problem of having more than 100% of your gdp as dept? It sounds like a psychological issue and not an economic one. That doesn't mean it's a moot point. I just want to understand better.
Joe, I've followed this issue generally including your podcasts.
I'm wondering about the use of developed economy metrics.
I see the Chinese world being an island of development in a lake of poverty.
Seems to me to be a work in progress about how their planners/leaders improvise its way forward.
In short Western media analysts are using a Western/Developed model to try to figure it all out.
In any real serious crises the action will be in the political realm. (see Chinese history which has often undulated between a central government, decentalized entities or years of chaos.
Thanks 😊
As a fiscally conservative American, I am very concerned about the American debt. However, the USA is a safe harbor for international money especially those worried about a wider war in Europe, the Middle East, or East Asia. Very few places for profitable investments internationally. So this will artificially boost American capital investments and by extension the economy.
and this gdp data is not exagerrated?
What you are saying that there is more debt in China (and the world) than people to be born to repay that debt.
And the number of people to be born is decreasing rapidly in China. (1.6 / 2.1 replacement rate)
Why is China still considered a "developing country"? I think it left the developing phase a few years ago.
Yea, now it’s bankrupt country
The GDP growth curve looks suspiciously linear.
Thank you for your excellent video. I really chuckle at your "Joe you are talking rubbish" comments. There are so many idiots on this planet who try to be a smart ass, but they are the contrary. Keep up the good work and have a fantastic festive season and hopefully a few days without TH-cam 🙏🏻😉
A country in deep trouble that has nukes is a very dangerous situation.
It is hard to know what this debt really means. It appears to be held mostly by state owned banks. If so, it is money owed by the govt. to itself. Furthermore, Japan has a much higher debt to GDP ratio, but has not collapsed. If China follows the Japan road, as they seem to be, they will be alright for a while.
They are crushing. So does japan tbh...
Even though Japan has high Debt to GDP to ratio, 90% of the debt is locally owned because Japanese have high rates of saving unlike the USA which has to borrow on the international market
@@terryvarta9306 it's 90% domestically owned because the central bank bought up all/most of the government's debt.
Japan is stagnant and been so for the last 20 years
@@terryvarta9306actually no. Most of the US debt is owned by the U.S. government itself, then by US banks and financial institutions, pension funds and only around 22% is owned by non-Americans. If you take out the debt owned by the U.S. government itself, its debt is about the same percentage as that of the UK, much better than that of Spain or Portugal or France. What these other countries don’t have that the U.S. has is a booming economy that has generated new industries.
does debt even mean anything? they say it does, but I think it's becoming just a "word" people throw out there - does really mean anything?
Well almost all Chinese local debt is held by other Chinese, while 1/3 of USA's public debt is held by other countries. Big difference.
China is shady, can’t trust their products much less their financials data .
Are you implying that it's good for China? China's currency isn't held by foreign governments for trade like the U.S dollar is. Over 60% of all trade around the world is done in U.S dollars vs 7% for the Chinese Yuan. Big difference 😅
I have a title for the sculpture over your right shoulder: "I've got to find a different proctologist"
With Trump in the WH the projection for US debt is way off, It will surprise very few if the US debt exceeds 45 trillion by 2028.
Biden did it. No mention of that. But you are sure what Trump will do before he has done it.
So... Equivalent to 8.2 trillion dollars at current rates?
7:00 China is the second largest economy in the world but less than 2/3 of the US. So who was predicting and how can China ever have GDP greater than the US? That was all we were hearing from the financial gurus like Ray Dalio. Oh, Ray Dalio is a salesman for his investment funds.
12:00 The fundamental problem is China's GDP is mostly made up of infrastructure spending. They just kept building. Most of the infrastructure of the last ten years was over-building and uneconomic from a utilization basis. So there is no excess revenue to pay down the debt taken out for construction. Now they are finding out economics do matter.
It’s the money laundering project for many CCP officials. They use their power to grant permission to developers and get kickbacks from developers by launching those building projects, after they send their kids to abroad and transfer money to their kids at overseas…they don’t care whether the projects are economically viable or not.
Wow … that’s a WAD of Debt ….
But if you add SOE, State Owned Enterprises, the debt ratio in China is even worse. The total debt that the state is "responsible for" is 309%, up from 279%. That means that for every 1% GDP, 6% is added to debt.
Ty for your work … I’m inclined to think the WhOLE world has big debt -I don’t know about economy anymore
Model krisis berbeda beda penyebab krisis pun juga berbeda beda
@Joe Blogs what about russia an india debt? africa?
Are you considering the internal saving, à huge amount which couldbe incanalide into the system, bonds. This way the debts would be resolved structurally.
Whose? Everyone tied it all up in buying apartments. Is there enough left?
@@markusgorelli5278 As of November 2024, the total deposits in Chinese banks amounted to approximately 41.93 trillion USD. This includes all financial institutions and represents a slight decrease from October 20241.
Is Diane Abbot involved in this.
China made such a big deal flaunting it's infrastructure projects, but now they will have to take out debt every year to maintain it, or else become a cautionary tale about overspending.
USA debt to GDP is nearing end of WW2 levels. The problem is, this is in an era of near historically LOW defense spending as a % of GDP, and we are already at a point where servicing our debt costs more than our defense budget. When, not if, we get in a large, costly war, we are really in a lot of trouble, economically speaking.
My concern is that if they need money, they might sell the American bonds they have to service their debt. This would transfer part of the problem to us. Of course I am not a financial expert so I could be all wet.
Great analysis. How does the silkroad initiative affect the finances ? China gave out huge loans that were not paid back.