…there’s going to be a reckoning, and the funny thing is that reckoning is going to begin in China and then eventually spread to the rest of the world. Whether it will happen in close proximity to the end of the COVID-19 pandemic remains to be seen, but there is definitely a short term correction and a longer term debt cycle deleveraging that are being put off by these policies. At some point, it will no longer be able to be kept at bay.
-cafebedouin, “A China Prediction: A Debt Deleveraging in a Decade.” cafebedouin.org
Today might be the day. Look for news on Evergrande and whether that will send China into recession. It probably won’t be Lehman Brothers, but it’s not going to be trivial. This comment seems about right to me:
“It won’t be a financial crisis, but a controlled burn of the world’s 2nd largest economy.”
-Kent Willard quoted in Adam Tooze, “Adam Tooze’s Top Links: Is Evergrande “China’s Lehman moment”? (#21)” adamtooze.substack.com. September 19, 2021.
cafebedouin.org 