On Friday, Reuters reported that one of the world’s largest banks, the Bank of China had sold to its customers a ‘wealth management product’ of the China Credit Trust Co., which is set to mature on January 31.
But the thing is, the ‘product’ does not have the money…
Investors have just been warned that they might not be repaid, stating in a phone interview with Reuters that “a situation completely does not exist in which the Bank of China will assume the main responsibility.”
A mega default here could send shock waves throughout the financial world, and the situation exemplifies the precipice on which we stand…
Terresa Monroe-Hamilton writes, “Well, it looks like the US and China have found common ground in the financial markets at last. They both are lurching towards a mega default of one form or another. Mark your calendars… China’s potential mega default is January 31st.”
“There is a parallel path between the US and China of printing money and the threat of looming defaults and skyrocketing interest rates. Both countries are propping up economies that are not being allowed to correct naturally, all but ensuring a catastrophic correction sooner, rather than later.”
This loan comes due at the end of the month and they don’t have sufficient funds to pay the investors. The investors may not even be paid after a delay – their investment may simply disappear.
If this occurs, it will set precedent in the financial markets — and the world is watching. This would be the very first default of this magnitude to occur and it will rock the markets to their core.
In the end, look for the Chinese authorities, much like the US government, to ride to the rescue with newly printed money.
But, just like the US, the Chinese may be their own worst enemy in the end. They will continue to prop up a bankrupt system and prevent corrections, until the system just fails. And it will fail spectacularly.
We are hurtling towards a day of reckoning. There are many dominoes in play and any one of them could bring it all down…
Are you ready?