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We'll give you fireworks at least when we talk about China.
More signs of weakness in the world's second largest economy to reports this morning show the slowdown in the manufacturing sector and this comes on top.
Of recent liquidity problems for banks and -- credit crunch for borrowers our next guest says it's all adding up to an economic crash.
Which we will see or could see this year joining us now Gordon Chang author of the coming collapse of China Gordon.
I know the people who disagree with the you'll say you've been saying this for years and years eventually you'll be right.
But you have been right so far why now use the word crash are we really there.
What we see right now is of course there's liquidity crises causing confidence problems.
You've got debt issues and with the slowing economy as we've seen from the HSBC PMI and even the official PMI.
It shows that they will not be able to pay back this debt so I think the fuse has been -- I don't think there's anything that they can really do right now because of global conditions.
Foreigners are not going to be pouring money into China and that really means that the Chinese economy is going to fail on its own.
It'll go into recession this is this played out in the United States in 20072008.
We had a liquidity crisis -- we had a credit crunch.
And then we had the recession so if this happens in China I would imagine the problem for us in the United States is they can no longer purchase are dead -- -- they continue to buy our debt.
Well you know they haven't really been buying debt for the last seven quarters you have to go back to June -- July 2011.
Mirror official holdings of US treasuries was one point three trillion dollars as -- -- -- it's it's the same now so essentially they have not been buying our debt.
And there's no reason to indicate that there unofficial purchases and sales have really deviated from the official numbers so basically we're fine on our round.
But we're -- on our own except that if they go into recession now we export to China I would imagine it will be buying as much as our stuff and they would undercut prices worldwide as they try to revive their economy would -- not.
Well they will be cutting prices they already have been but we gotta remember that we've last year ran a 315.
Point one billion dollar trade deficit -- in China.
They are essentially that's a negative for GDP I'm not saying we shouldn't trade with them but on balance though it means that trade with China has not been good for US GD demand that.
Bad trade deficit would actually grow with they going to recession because of their undercutting -- let me ask you this.
There's something you have drawn attention to that perhaps people are paying too much attention to which of these notices.
About Chinese consumers not being able to take money out of ATMs what is this about do we believe the official statement as to why.
Well I CBC which is the largest bank in China.
Bank of China bank of mentioning a number of other institutions basically shut down -- ATMs at various times last week.
And they were saying this was because of systems upgrades from him but bankers in China have been privately saying that this really -- Basically to conserve cash.
And so this shows how bad Chinese institutions are.
And you know it'll be okay today I'm sure because it's the first day of the new quarter and so they don't have to meet the quarter and capital requirements.
But nonetheless this shows you how old.
A fine and engage the Chinese economy is right now.
And seconds left when.
When do we finally get the world agreeing with you would like here it is that the -- the crash and the Chinese economists sometime within six months because I don't think they complain about much further.
All right Gordon Chang actually putting a timeline on it thank you very much good -- your -- thank you.
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