cross-posted from: https://feddit.org/post/860815
The Chinese banking sector is facing a severe crisis. In just one week, 40 banks disappeared, and the collapse of Jiangxi Bank has further deepened the sector’s problems.
Cryptocurrency market analyst Sigma G also examined the situation in China’s banking sector. He points out that the leading cause of the problems is the deep recession in China’s real estate sector. Over-indebted developers and local governments fail to repay loans, leading to financial instability. Property prices have plummeted, and construction projects have been halted, further burdening the economic system.
The author also highlights the issue of hidden bad debts. Banks have used asset management companies (AMCs) to offload toxic loans, creating an illusion of stability. However, a new banking regulator, the National Financial Regulatory Administration (NAFR), has begun cracking down on these practices by imposing fines and increasing oversight.
Many Chinese cities and even entire regions are drowning in debt. The liabilities were so high that local government representatives sent envoys to Beijing in the spring. They are negotiating terms for repaying billions in loans. Unpaid debts are increasingly weighing on regional economies, threatening national economic growth.
I’ve very recently noticed housing prices in the US show signs that homeowners are getting pretty nervous.
Many homeowners and businesses bet on prices always going up by using one loan to pay off the next. Once prices start to fall they are in deep debt (due to their own selfishness and greed of course). Then America decides to do what they always do and bail then out and protect the wealthy.