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[DNotes]

Digital Currency Weekly Recap 1-10-2016

Germany Considers Digital Currency Controls to Counter Terror Financing.
Universities Working to Meet Crypto Industry Talent Needs.
Lithuania to Host 2016 Bitcoin Conference.

http://dcebrief.com/digital-currency-weekly-recap-1-10-2016/

[DNotes]

Just a side note, we were going to include something about this https://www.cryptocoinsnews.com/crowdsale-set-jan-18-pinkcoin-first-diamond-backed-cryptocurrency/ in the DC recap, however researching it led to more questions than answers. It doesn't seem as there is any discussion the name and the original pinkcoin created in 2014?

[Chase]

Just a side note, we were going to include something about this https://www.cryptocoinsnews.com/crowdsale-set-jan-18-pinkcoin-first-diamond-backed-cryptocurrency/ in the DC recap, however researching it led to more questions than answers. It doesn't seem as there is any discussion the name and the original pinkcoin created in 2014?

Definitely not the same coin.

This sounds very impressive:

"BitGem Asset Management Ltd. (BAM) and its parent company, Precious Investments Inc., will launch a crowdsale for what they call the first diamond-backed cryptocurrency, PinkCoin, an Ethereum-based cryptocurrency backed by a pool of fixed-colored diamond assets. The crowd sale begins on Jan. 18, 2016 at 9 a.m. The escrowed diamonds are insured by Lloyds of London and have been independently appraised."

However, this does not:

"Precious Investments Inc. trades on OTC Markets under the symbol PNIK."

Nor does this:

"On 12/11/2015, Precious Investments, Inc. announced that they will be unable to file their next 10-Q by the deadline required by the SEC."

"On 10/27/2015, Precious Investments, Inc. announced that they will be unable to file their next 10-K by the deadline required by the SEC."

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=12216889

It may be perfectly legit, but I would do a LOT of research before investing (which is kind of difficult because I couldn't find anything either on the NEW 'Pink coin'). 

[Dyna]

RJF, it is frustrating and I know that you have been one of their staunchest supporters and defenders. No matter what their issues are, there are always multiple options to solve those problems. Not communicating with their customers is probable the worst of all options.

I couldn't agree more with you. Cryptsy was a good exchange but always provided poor support. As a user, I always felt like: We don't need you, we don't care if you are satisfied or not.




Not sure how serious the first statement is...

As an update, I successfully withdrew 20,000 DNotes from Cryptsy an hour ago. It was blazing fast and reached destination without a glitch. Go figure. Could it be a case of selective technical interference for unknown reasons? Frustrating! This is not good for our industry, especially for those that are only listed on Cryptsy. Get the word out, I will be interested to consider participating in an opportunity to save Cryptsy, should it come to that.

[Dyna]

Just a side note, we were going to include something about this https://www.cryptocoinsnews.com/crowdsale-set-jan-18-pinkcoin-first-diamond-backed-cryptocurrency/ in the DC recap, however researching it led to more questions than answers. It doesn't seem as there is any discussion the name and the original pinkcoin created in 2014?

Definitely not the same coin.

This sounds very impressive:

"BitGem Asset Management Ltd. (BAM) and its parent company, Precious Investments Inc., will launch a crowdsale for what they call the first diamond-backed cryptocurrency, PinkCoin, an Ethereum-based cryptocurrency backed by a pool of fixed-colored diamond assets. The crowd sale begins on Jan. 18, 2016 at 9 a.m. The escrowed diamonds are insured by Lloyds of London and have been independently appraised."

However, this does not:

"Precious Investments Inc. trades on OTC Markets under the symbol PNIK."

Nor does this:

"On 12/11/2015, Precious Investments, Inc. announced that they will be unable to file their next 10-Q by the deadline required by the SEC."

"On 10/27/2015, Precious Investments, Inc. announced that they will be unable to file their next 10-K by the deadline required by the SEC."

http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=12216889

It may be perfectly legit, but I would do a LOT of research before investing (which is kind of difficult because I couldn't find anything either on the NEW 'Pink coin'). 

I agree. It sounds impressive, but unless it has been well vetted, I would be cautious, especially as an investor.

[Chase]

RJF, it is frustrating and I know that you have been one of their staunchest supporters and defenders. No matter what their issues are, there are always multiple options to solve those problems. Not communicating with their customers is probable the worst of all options.

I couldn't agree more with you. Cryptsy was a good exchange but always provided poor support. As a user, I always felt like: We don't need you, we don't care if you are satisfied or not.




Not sure how serious the first statement is...

As an update, I successfully withdrew 20,000 DNotes from Cryptsy an hour ago. It was blazing fast and reached destination without a glitch. Go figure. Could it be a case of selective technical interference for unknown reasons? Frustrating! This is not good for our industry, especially for those that are only listed on Cryptsy. Get the word out, I will be interested to consider participating in an opportunity to save Cryptsy, should it come to that.

"Get the word out, I will be interested to consider participating in an opportunity to save Cryptsy, should it come to that."

That would be an amazing boost for the industry - the last thing we need is another major exchange going down.

Cryptsy needs a do-over and the king needs to be removed from his throne. They need someone with good business sense and excellent customer service running things.

[DNotes]

RJF, it is frustrating and I know that you have been one of their staunchest supporters and defenders. No matter what their issues are, there are always multiple options to solve those problems. Not communicating with their customers is probable the worst of all options.

I couldn't agree more with you. Cryptsy was a good exchange but always provided poor support. As a user, I always felt like: We don't need you, we don't care if you are satisfied or not.




Not sure how serious the first statement is...

As an update, I successfully withdrew 20,000 DNotes from Cryptsy an hour ago. It was blazing fast and reached destination without a glitch. Go figure. Could it be a case of selective technical interference for unknown reasons? Frustrating! This is not good for our industry, especially for those that are only listed on Cryptsy. Get the word out, I will be interested to consider participating in an opportunity to save Cryptsy, should it come to that.

"Get the word out, I will be interested to consider participating in an opportunity to save Cryptsy, should it come to that."

That would be an amazing boost for the industry - the last thing we need is another major exchange going down.

Cryptsy needs a do-over and the king needs to be removed from his throne. They need someone with good business sense and excellent customer service running things.

I've always liked Cryptsy, and they seemed to have been going in the right direction regulation wise but the recent show of improper public relations, support, and just plain old communication is frustrating. It would be a shame to see an exchange that once had a huge following go down hill.

[wargo]

Planning to delisting from http://pool.e-waluty.net.pl/ due to low interest.

[CryptoBroker79]

Planning to delisting from http://pool.e-waluty.net.pl/ due to low interest.

All coins on the pool? It doesn't seem as though there is interest in any.

[CryptoBroker79]

http://dcebrief.com/dnotes-2015-year-in-review/

Is there any way we could get this article translated to keep our international, non english community in the loop? It's a very good article and many may appreciate it. This would also be a great way to gain some momentum for the translated DNotes threads on Bitcointalk.

[DNotes]

Planning to delisting from http://pool.e-waluty.net.pl/ due to low interest.

I understand wargo. Pools in general seem to be having trouble competing in the altcoin industry. Have you considered multipool options?

[DNotes]

http://dcebrief.com/dnotes-2015-year-in-review/

Is there any way we could get this article translated to keep our international, non english community in the loop? It's a very good article and many may appreciate it. This would also be a great way to gain some momentum for the translated DNotes threads on Bitcointalk.

Translation costs are pretty high, most services charge around $50 to translate 500 words into another language, so even the top 5 languages would be a good amount of money. I've been giving this a lot of thought though in general for DCEBrief, having a section on the site for each language and subverting the cost by allowing the translators to have their own ads on the site.

[CryptoBroker79]

http://dcebrief.com/dnotes-2015-year-in-review/

Is there any way we could get this article translated to keep our international, non english community in the loop? It's a very good article and many may appreciate it. This would also be a great way to gain some momentum for the translated DNotes threads on Bitcointalk.

Translation costs are pretty high, most services charge around $50 to translate 500 words into another language, so even the top 5 languages would be a good amount of money. I've been giving this a lot of thought though in general for DCEBrief, having a section on the site for each language and subverting the cost by allowing the translators to have their own ads on the site.

That would be a very good deal for translators.

As I've learned over the past couple years, effective advertising by today's standards isn't cheap or easy. A barter type system, such as the one you suggested, would be highly beneficial to people who can't afford advertising, and it would give them incentive to drive extra traffic to that specific page.

[Dyna]

When it comes to the economy, I don’t normally like to sound the alarm, since there are so many other people smarter than me on this subject. It is becoming very concerning


"For years, China voraciously gobbled up all manner of metals, crops and fuels as its economy rapidly expanded. Countries and companies, fuelled by cheap debt, aggressively broadened their operations, betting that China's appetite would grow unabated."

Now everything has changed.

China's economy is slumping. US companies, struggling to pay their debts as interest rates rise, must keep producing. All the excess is crushing prices, hurting commodity-dependent economies across emerging markets like Brazil and Venezuela and developed countries like Australia and Canada.
The geopolitical and financial consequences of this shift have shaken investor confidence. Concerns over global growth intensified in recent days, when weakness in China prompted a stock sell-off around the world.

The commodities hangover, the dark side of a decade's long boom, could last for a while.
Multibillion-dollar investment decisions made years ago on big projects, like the oil sands fields in Canada and iron ore mines in West Africa, are just getting up and running. Facing huge costs, companies cannot simply shut off projects. So the excess could take years to work through.

The flood of raw materials is pressuring prices, prompting a painful shakeout. Oil companies have laid off an estimated 250,000 workers worldwide. Alpha Natural Resources and other US coal mining companies have filed for bankruptcy protection.
Saudi Arabia, a giant energy economy, has had to tap the credit markets as its financial reserves dwindle. Venezuela, an oil-rich nation that went on a spending spree, is struggling to meet $US10 billion ($14.2 billion) in debt obligations this year, since 95 per cent of export earnings depend on crude oil.


Read More:

http://www.afr.com/markets/commodities/commodity-prices-slip-anew-after-worst-year-since-financial-crisis-20160110-gm30wk

Jan 11 2016 at 8:32 AM
by Clifford Krauss

[IMZ]

'Facing huge costs, companies cannot simply shut off projects. So the excess could take years to work through.'

Hey, Dyna. Sorry to be that guy: beyond all you mentioned, debt is a far far far larger problem. For example, it's not just that these companies will shut down, but that their defaults on their debt -- junk quality -- will set off exactly the same sort of melt down that was GFC One.

I've been staring at the screen for eight years now: the amount is unpayable, and the abysmal quality could spark a collapse any second now.

And the 'MSM' lies through its teeth. For example, the boom in U.S. auto sales is always being counted as a minor proof of recovery. Actually, it's a debt-bubble disaster: if you can fog a mirror, they'll sign you up for a long and expensive loan on a new unit they couldn't otherwise sell unless Martians with gold bullion hove in sight.

[ I recall reading this when it came out: http://www.reuters.com/article/us-usa-comptroller-resignation-idUSN1559692520080215 ]

Mark (IndiaMikeZulu), Australia

[Dyna]

'Facing huge costs, companies cannot simply shut off projects. So the excess could take years to work through.'

Hey, Dyna. Sorry to be that guy: beyond all you mentioned, debt is a far far far larger problem. For example, it's not just that these companies will shut down, but that their defaults on their debt -- junk quality -- will set off exactly the same sort of melt down that was GFC One.

I've been staring at the screen for eight years now: the amount is unpayable, and the abysmal quality could spark a collapse any second now.

And the 'MSM' lies through its teeth. For example, the boom in U.S. auto sales is always being counted as a minor proof of recovery. Actually, it's a debt-bubble disaster: if you can fog a mirror, they'll sign you up for a long and expensive loan on a new unit they couldn't otherwise sell unless Martians with gold bullion hove in sight.

[ I recall reading this when it came out: http://www.reuters.com/article/us-usa-comptroller-resignation-idUSN1559692520080215 ]

Mark (IndiaMikeZulu), Australia

I agree, Mark. Unlike the 2008 global financial crises, it could be much more complicated this time around. It was sad, but easier, for people to hand over their keys, and walked away from their homes. There will be some of that too. But most concerning are the massive number of highly leveraged projects that had rosy projections when money was cheap and the price of commodities was high. Banks and other lenders will be taking many serious blows and many jobs will be lost. For sure it will take many years to iron out.

[DNotes]

http://dcebrief.com/the-most-popular-blockchain-news-on-social-media-in-2015/

[Dyna]

This is the best article I came across why a serious debt meltdown may already be in the making.



China Is Headed for a Debt Meltdown Like the U.S. in 2008 -- But Worse
Posted:
01/08/2016 6:55 pm EST

World attention has focused in recent months on an acute refugee crisis occasioned by the mass migration to Europe of hundreds of thousands now fleeing the Syrian civil war. Less noticed has been another refugee crisis at least as ominous as that underway in the Middle East and Europe -- the fleeing of money from China.

What's going on, and why is it ominous?

To understand what is happening, we must first remind ourselves what happened in the U.S. and global economies in 2008 -- and how China responded to it.

In 2008, the U.S. experienced the precipitous crash of what had been a highly overvalued real estate and associated bond market. Those markets' prices had been driven by cheap credit used by investors to speculate in residential real estate and mortgage-related financial instruments. Because these investments had been financed by private debt, post-crash investors found themselves suddenly owing much more than they owned -- their assets had plummeted, but the debts that they had incurred to buy them had not.

What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own.

When investors, post-crash, find themselves suddenly "underwater" like this, they tend to stop spending on goods and services in the "real" economy. After all, they now have negative net worth, and must accordingly spend larger portions of their incomes paying down debt rather than buying things.

When millions act pursuant to this dynamic, it slows or reverses macroeconomic growth -- it brings recession or all-out depression. The worst such episodes are called "debt-deflations," precisely because the falling prices and contraction experienced by an afflicted macroeconomy are driven by high ratios of private debt to income.

Back now to China. The U.S. debt-deflation that began in late 2008 infected the wider world economy. This was partly because foreign investors had also participated in the U.S. bubble, but it was also because U.S. consumers are primary sources of demand for other nations' products. China, in particular, depended on U.S. consumers to buy its products and thus fuel its growth.

China, then, was especially vulnerable to the contagion effects of America's post-2008 debt deflation. But China's government, as is well known, depends on delivering high domestic growth for its very legitimacy in the eyes of the citizenry. What, then, was China to do?

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.
What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own. First it targeted real estate, directing state-owned banks to extend credit on cheap terms for speculative residential and commercial real estate investments. Then it targeted stocks and other financial instruments, allowing and then encouraging lenders to facilitate purchases of speculative assets on margin.

For five or six years, China's strategy worked. Steadily rising stock and real estate prices underwrote a "wealth effect," making China's wealthier and middle classes feel prosperous and thereby encouraging domestic spending. That in turn substituted for dwindling American and global demand for Chinese exports, keeping China's growth engine running -- for a time. Things were just as they'd been in the U.S. during the late Clinton and Bush years -- private debt fueled ephemeral macroeconomic growth.

In the end, though, the same thing happened to this bubble as happens to all bubbles -- it reached an outer limit, then began to deflate. The deflationary pressure in turn became self-accelerating, just as occurred in the U.S. in 1929 and 2008, and just as occurs in all "runs" on banks or assets.

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.

Exodus of Currency

That takes us to China's new "refugee problem" -- the exodus of currency from its markets. What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.

Worse? Yes, and that takes us on to why China's travails are so ominous.

So, to begin, China's aggregate private debt-to-GDP ratios during its recent peak bubble years are much higher than in the U.S. -- both in 1928 and 2007

If its stock and real estate markets completely melt down, then, China's negative net worth problem and associated debt-deflation -- its "great depression" -- could well make our own look like festive occasions.

That is, of course, ominous enough, but there is more. Note first what I said earlier about where Chinese money is going -- to U.S. real estate and other asset markets. This, too, is worrisome, in at least two ways.

Read More:
http://www.huffingtonpost.com/robert-hockett-/china-debt-meltdown-_b_8940382.html

[grandmama]

This is the best article I came across why a serious debt meltdown may already be in the making.



China Is Headed for a Debt Meltdown Like the U.S. in 2008 -- But Worse
Posted:
01/08/2016 6:55 pm EST

World attention has focused in recent months on an acute refugee crisis occasioned by the mass migration to Europe of hundreds of thousands now fleeing the Syrian civil war. Less noticed has been another refugee crisis at least as ominous as that underway in the Middle East and Europe -- the fleeing of money from China.

What's going on, and why is it ominous?

To understand what is happening, we must first remind ourselves what happened in the U.S. and global economies in 2008 -- and how China responded to it.

In 2008, the U.S. experienced the precipitous crash of what had been a highly overvalued real estate and associated bond market. Those markets' prices had been driven by cheap credit used by investors to speculate in residential real estate and mortgage-related financial instruments. Because these investments had been financed by private debt, post-crash investors found themselves suddenly owing much more than they owned -- their assets had plummeted, but the debts that they had incurred to buy them had not.

What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own.

When investors, post-crash, find themselves suddenly "underwater" like this, they tend to stop spending on goods and services in the "real" economy. After all, they now have negative net worth, and must accordingly spend larger portions of their incomes paying down debt rather than buying things.

When millions act pursuant to this dynamic, it slows or reverses macroeconomic growth -- it brings recession or all-out depression. The worst such episodes are called "debt-deflations," precisely because the falling prices and contraction experienced by an afflicted macroeconomy are driven by high ratios of private debt to income.

Back now to China. The U.S. debt-deflation that began in late 2008 infected the wider world economy. This was partly because foreign investors had also participated in the U.S. bubble, but it was also because U.S. consumers are primary sources of demand for other nations' products. China, in particular, depended on U.S. consumers to buy its products and thus fuel its growth.

China, then, was especially vulnerable to the contagion effects of America's post-2008 debt deflation. But China's government, as is well known, depends on delivering high domestic growth for its very legitimacy in the eyes of the citizenry. What, then, was China to do?

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.
What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own. First it targeted real estate, directing state-owned banks to extend credit on cheap terms for speculative residential and commercial real estate investments. Then it targeted stocks and other financial instruments, allowing and then encouraging lenders to facilitate purchases of speculative assets on margin.

For five or six years, China's strategy worked. Steadily rising stock and real estate prices underwrote a "wealth effect," making China's wealthier and middle classes feel prosperous and thereby encouraging domestic spending. That in turn substituted for dwindling American and global demand for Chinese exports, keeping China's growth engine running -- for a time. Things were just as they'd been in the U.S. during the late Clinton and Bush years -- private debt fueled ephemeral macroeconomic growth.

In the end, though, the same thing happened to this bubble as happens to all bubbles -- it reached an outer limit, then began to deflate. The deflationary pressure in turn became self-accelerating, just as occurred in the U.S. in 1929 and 2008, and just as occurs in all "runs" on banks or assets.

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.

Exodus of Currency

That takes us to China's new "refugee problem" -- the exodus of currency from its markets. What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.

Worse? Yes, and that takes us on to why China's travails are so ominous.

So, to begin, China's aggregate private debt-to-GDP ratios during its recent peak bubble years are much higher than in the U.S. -- both in 1928 and 2007

If its stock and real estate markets completely melt down, then, China's negative net worth problem and associated debt-deflation -- its "great depression" -- could well make our own look like festive occasions.

That is, of course, ominous enough, but there is more. Note first what I said earlier about where Chinese money is going -- to U.S. real estate and other asset markets. This, too, is worrisome, in at least two ways.

Read More:
http://www.huffingtonpost.com/robert-hockett-/china-debt-meltdown-_b_8940382.html

Just read an article a couple weeks ago where China is dumping, at cheap rates, there excess steel into the American market.  US steel companies are beginning to suffer, which will have a trickle down effect from this and this is only one segment yet large enough of an impact to be written about solely in the news. Scrap prices are very low, softening that market as well. I wonder if this will be another fiasco like the "Sheetrock" when China dumped a bunch of crap Sheetrock into the US market that made so many people sick and cost tons of money to replace?! You all remember the FEMA houses? Rows and rows of inhabitable homes because of China Sheetrock??  Sickened me to think "we" our government would not even use "in house", American made products which would have met the safety standards. One has to wonder when structural materials roll in off the boats if they comply with any safety standards, but we seem to gobble inferior products up each and every day without batting an eye. And, as Alan has stated many time, this is just one more segment. I believe there will be so many more cards to fall and we are just seeing the beginning. China's growth rate has, I believe, come to an unsustainable point in time, which economists have been predicting.  So not only is it the cash flow that Alan talked about it is directly impacting their manufacturing which goes right hand in had with the cash flow. 

[Dyna]

This is the best article I came across why a serious debt meltdown may already be in the making.



China Is Headed for a Debt Meltdown Like the U.S. in 2008 -- But Worse
Posted:
01/08/2016 6:55 pm EST

World attention has focused in recent months on an acute refugee crisis occasioned by the mass migration to Europe of hundreds of thousands now fleeing the Syrian civil war. Less noticed has been another refugee crisis at least as ominous as that underway in the Middle East and Europe -- the fleeing of money from China.

What's going on, and why is it ominous?

To understand what is happening, we must first remind ourselves what happened in the U.S. and global economies in 2008 -- and how China responded to it.

In 2008, the U.S. experienced the precipitous crash of what had been a highly overvalued real estate and associated bond market. Those markets' prices had been driven by cheap credit used by investors to speculate in residential real estate and mortgage-related financial instruments. Because these investments had been financed by private debt, post-crash investors found themselves suddenly owing much more than they owned -- their assets had plummeted, but the debts that they had incurred to buy them had not.

What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own.

When investors, post-crash, find themselves suddenly "underwater" like this, they tend to stop spending on goods and services in the "real" economy. After all, they now have negative net worth, and must accordingly spend larger portions of their incomes paying down debt rather than buying things.

When millions act pursuant to this dynamic, it slows or reverses macroeconomic growth -- it brings recession or all-out depression. The worst such episodes are called "debt-deflations," precisely because the falling prices and contraction experienced by an afflicted macroeconomy are driven by high ratios of private debt to income.

Back now to China. The U.S. debt-deflation that began in late 2008 infected the wider world economy. This was partly because foreign investors had also participated in the U.S. bubble, but it was also because U.S. consumers are primary sources of demand for other nations' products. China, in particular, depended on U.S. consumers to buy its products and thus fuel its growth.

China, then, was especially vulnerable to the contagion effects of America's post-2008 debt deflation. But China's government, as is well known, depends on delivering high domestic growth for its very legitimacy in the eyes of the citizenry. What, then, was China to do?

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.
What China ultimately did was essentially, and ironically, to repeat what the U.S. had done in the first place -- it engineered two domestic asset price bubbles of its own. First it targeted real estate, directing state-owned banks to extend credit on cheap terms for speculative residential and commercial real estate investments. Then it targeted stocks and other financial instruments, allowing and then encouraging lenders to facilitate purchases of speculative assets on margin.

For five or six years, China's strategy worked. Steadily rising stock and real estate prices underwrote a "wealth effect," making China's wealthier and middle classes feel prosperous and thereby encouraging domestic spending. That in turn substituted for dwindling American and global demand for Chinese exports, keeping China's growth engine running -- for a time. Things were just as they'd been in the U.S. during the late Clinton and Bush years -- private debt fueled ephemeral macroeconomic growth.

In the end, though, the same thing happened to this bubble as happens to all bubbles -- it reached an outer limit, then began to deflate. The deflationary pressure in turn became self-accelerating, just as occurred in the U.S. in 1929 and 2008, and just as occurs in all "runs" on banks or assets.

Chinese investors now find themselves faced with a post-bubble negative net worth problem, just like that faced by Americans after 1929 and 2008.

Exodus of Currency

That takes us to China's new "refugee problem" -- the exodus of currency from its markets. What is now happening is that people are selling off Chinese assets and investing instead in (primarily) American assets -- including stocks but especially real estate. As momentum in these flows builds up, China faces the prospect of full-on meltdowns in its stock and real estate markets, just as occurred here in the U.S. in the late 1920s and post-2008 -- only worse.

Worse? Yes, and that takes us on to why China's travails are so ominous.

So, to begin, China's aggregate private debt-to-GDP ratios during its recent peak bubble years are much higher than in the U.S. -- both in 1928 and 2007

If its stock and real estate markets completely melt down, then, China's negative net worth problem and associated debt-deflation -- its "great depression" -- could well make our own look like festive occasions.

That is, of course, ominous enough, but there is more. Note first what I said earlier about where Chinese money is going -- to U.S. real estate and other asset markets. This, too, is worrisome, in at least two ways.

Read More:
http://www.huffingtonpost.com/robert-hockett-/china-debt-meltdown-_b_8940382.html

Just read an article a couple weeks ago where China is dumping, at cheap rates, there excess steel into the American market.  US steel companies are beginning to suffer, which will have a trickle down effect from this and this is only one segment yet large enough of an impact to be written about solely in the news. Scrap prices are very low, softening that market as well. I wonder if this will be another fiasco like the "Sheetrock" when China dumped a bunch of crap Sheetrock into the US market that made so many people sick and cost tons of money to replace?! You all remember the FEMA houses? Rows and rows of inhabitable homes because of China Sheetrock??  Sickened me to think "we" our government would not even use "in house", American made products which would have met the safety standards. One has to wonder when structural materials roll in off the boats if they comply with any safety standards, but we seem to gobble inferior products up each and every day without batting an eye. And, as Alan has stated many time, this is just one more segment. I believe there will be so many more cards to fall and we are just seeing the beginning. China's growth rate has, I believe, come to an unsustainable point in time, which economists have been predicting.  So not only is it the cash flow that Alan talked about it is directly impacting their manufacturing which goes right hand in had with the cash flow. 

"Scrap prices are very low, softening that market as well". This may not mean much to the average people but that has been a multi-billion $ industry in the US alone. Many recycling companies, including many small businesses with revenue up to $50 million are shutting down, with tens of thousands jobs lost. It is all these little troubling signs that I am quite concerned about.