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China’s Cash Crunch

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It doesn’t matter how much money is printed. China’s ghost cities can’t make money if there’s no business, never mind people. The Wall Street Journal reports:

Mounting evidence of weakness in China’s economy and increasing stress in its financial system are testing the government’s determination to ride out a slowdown without resorting to stimulus measures.

A preliminary gauge released Thursday suggested that China’s crucial manufacturing sector contracted at a faster rate in June compared with May. The reading is the latest sign that the economy may be faltering, after exports, industrial output and fixed-asset investment all slowed last month. The results hit Asian financial markets and commodities markets on Thursday amid worries that China’s slowing growth could have a ripple effect.

China at the same time is grappling with increasingly tight cash squeeze, as rates surge in the market at which banks lend to each other. The crunch stems in part from a slowdown in foreign capital inflows due to skepticism over China’s growth prospects.

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.
E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.