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strategy What to do in the Coming Financial Earthquake

NameSilo
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Whizzbang

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I’ve written a number of articles over the past year on the looming problem of the Chinese debt situation. It’s currently just shy of 300% of GDP and this doesn’t bode well for domain investors reliant on cheap Chinese capital to purchase their domains at hugely inflated prices. So should we really panic?

I saw the following charts in a recent Bloomberg article that puts the Chinese debt problem into perspective. What’s interesting about this chart is that China’s flatter line shows that it’s not getting as big a GDP bang for its debt buck compared to some other nations. Also notice that Germany is retiring debt even while sharply increasing its GDP per capita.

20170627_gdpdebt.gif


The USA is continuing to increase debt while getting a lot of GDP per capita from it.....but the debt still continues to increase. At some stage the piper has to be paid and if the current trends continue it will be more when not if.

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Here's the ripple effect. The MASSIVE USA debt that is owned by China at these current rates. In short a time fuse and as you say not if but when. Jim Chanos (see Enron) has been short China in a big way for a long time. Great article thank you.
 
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The USA is continuing to increase debt while getting a lot of GDP per capita from it.....but the debt still continues to increase. At some stage the piper has to be paid and if the current trends continue it will be more when not if.

Read More >


Woof, this is disheartening.
 
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Here's the ripple effect. The MASSIVE USA debt that is owned by China at these current rates. In short a time fuse and as you say not if but when. Jim Chanos (see Enron) has been short China in a big way for a long time. Great article thank you.
Agreed - the US debt is largely owned by China and is the fuse. It's an illustration of just how interconnected the world financial system is......in some ways it's frightening! The question that all domain investors should ask is how they can insulate themselves from a bigger financial downturn than the GFC of 2008.
 
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