Kristian Rouz – Analysts at US investment bank Morgan Stanley say China is poised to increase its leverage despite Beijing's recent efforts to curb debt accumulation. Experts say the so-called “shadow banking”, or unofficial corporate lending practices, are now less of a threat due to improved regulations and banking sector transparency. According to a new report from Morgan Stanley, China's debt-to-GDP ratio is set to increase by 3-4 percent over the coming 12 months. Analysts said that although Beijing has taken steps to reduce its reliance on debt, last year's trade tensions with the US, and the lingering threat of a trade war, are making Chinese provincial governments and corporations more inclined to borrow money to finance their projects. READ MORE: China Social Credit System Blocks Millions from Public Services However, Morgan Stanley said Beijing has made … [Read more...] about Report: China’s Debt to Rise Amid Decreasing ‘Shadow Banking’ Risks
China national debt
The Treasury Department's daily statement showed Tuesday that the total outstanding public debt now stands at $22.012 trillion. It stood at $19.95 trillion when President Donald Trump took office on 20 Jan 2017 Radio Sputnik has discussed the development with Gregory Daco, head of US Economics at Oxford Economics USA. READ MORE: Trump's Plan to Rid US of Its Debt in 8 Years is 'Absolutely Impossible' — Prof Sputnik: $22 trillion, I mean is this really a scary figure? Of course, it is a new high, but has not US debt continued to grow for many, many years now? Gregory Daco: Yes, it has. And $22 trillion yes it is larger than the size of the US economy, when you measure it by GDP. But what really is important, I think, is more the publicly held portion of the federal debt, which is somewhat lower, closer to 16 trillion, about 80 percent of GDP in the United States. I think when we … [Read more...] about US National Debt: ‘You Can’t Bridge Deficit Gap Overnight’ – Chief US Economist
According to the US Congressional Budget Office (CBO), the United States’ federal budget deficit will rise by more than $100 billion to reach $900 billion this year. The CBO said in its January report that over the coming decade, deficits will fluctuate between 4.1 percent and 4.7 percent of gross domestic product (GDP), well above the average over the past half a century. READ MORE: President Trump AKA 'Mr. Tariff' and the US Economy The CBO also said the federal outlays are projected to increase from 20.8 percent of GDP in 2019 to 23.0 percent in 2029. CC0 / PixabayTrump’s ‘Inherently Unstable’ Capitalist Economy to Face ‘Momentous Crash’The US Treasury Department's report comes as the federal US government has re-opened after a 35-day partial shutdown, which the Congressional Budget Office characterized as having a modest negative impact on the US … [Read more...] about US National Debt Surpasses $22 Trillion Mark for First Time
So far, the leading debtor nation in the world is still the United States. At the end of 2016, the US national debt amounted to 19.9 trillion dollars. This sum is more than the entire world's reserves of currency, gold, and silver combined. It is also 25 times the cost of all the oil exported in the world per year. China is America's largest creditor. As of the end of November, China held US Treasury bonds in the amount of 1.15 trillion dollars. © AFP 2018 / Fred DUFOURRouble and Yuan Challenge US Dollar Hegemony - Financial ExpertsHowever, China itself is also gradually becoming an attractive borrowing entity for other countries. In the summer of this year, the yield on 10-year sovereign bonds was at its peak of 3.65 %. And while by December the profitability had slightly decreased to 3.35%, Chinese debt securities still offer more income than US 10-year bonds, which have a yield … [Read more...] about Analyst Explains If China Would Be Able to Pay Its National Debt Obligations
Since then, US federal debt has gone out of control, more than doubling from the 2007 level of $9 trillion to $20.44 trillion in 2017, equivalent to 105.4 percent of GDP. After including state and city governments' debt, the total amount was close to $26 trillion, about 130 percent of GDP. The 2001 stock market crash was resolved through the rapid development of the real estate market, which, however, caused a larger global financial crisis in 2008. Increased debt and quantitative easing were used in response to the US subprime mortgage crisis, but will the resulting debt lead to another large-scale stock market collapse and economic crisis? Whether there will be a new crisis depends on whether the US government still has creditworthiness and whether it reaches a limit in terms of the debt-to-GDP ratio and debt leverage. Excessive debt issues may cause a US dollar devaluation and lower credit … [Read more...] about Will US Debt Crisis Trigger New Stock Rout, Financial Turmoil?