The guys over at Zero hedge warn it might. MEGA DEFAULT ahead? A classic dismal scientist story.
As an economist it is always interesting and useful to read "the worst case" scenario articles. By now we know very well that black swan events happen and more often that we care to imagine. In this case the concern is China's increase in credit from $9 trillion to over $23 trillion in 5 years.
But China has been growing rapidly so it is not a problem right? Not so simple.
I agree with Michael Snyder here (author of the Zerohedge article) - many Chinese companies are in deep - way too deep.
Other posts have considered local government debt.
The date suggested - 31st January. Of course this is scaremongering and not a reason to sell everything and buy gold (as many would suggest).
In reality the Chinese government have enough firepower to prevent catastrophic collapse but it might be worth watching the indices carefully on the 31st January.
The $23 Trillion Credit Bubble In China Is Starting To Collapse – What Next? [Zerohedge]
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