China keeps credit pedal to the metal

China’s PBOC released new yuan loans for September last night it remains credit pedal to the metal with total social financing at 3.48tr yuan of which 1.9tr was bank lending:

The non-bank share has rebound strongly but that is distorted by the inclusion of local government bonds these days:

The three month moving average of new credit is a very solid block:

The rolling annual is a rocket ship:

M2 is strong at 10.9%:

And broad credit is once again off to the races:

Put another way, to achieve such credit growth from such a high base, China is binging on debt in a manner never before seen:

Obviously, it is commodity price supportive while it lasts.

David Llewellyn-Smith
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Comments

  1. chuckmuscleMEMBER

    Isn’t it the impulse that matters? According to Bloomie that’s running north of 8%. Historically difficult to sustain that level, suspect it levels off close to here and proceeds to turn down at the beginning of next year. Could mean next year is really tough if dont have some domestic growth; US might be ok, but we’re fooked me thinks…

    • I always ask where the hell are the CCP getting their usd from to massively overpay for our iron ore. That article is one of many from over the last year which sheds some light on it. I don;t think they care about the price of iron ore as long as there are idiots willing to give them other peoples usd. For what? An extra 2.5%? Reminds me of when the dumbass German bankers were lending to Greece for a few extra percentage points over their own safe haven bonds. Check out this article for more ‘masters of the universe’ geniuses: https://www.afr.com/markets/debt-markets/australia-the-rolls-royce-of-global-sovereign-bond-issuers-20200729-p55gh2
      Do they know anything about where that money is going? About the Oz economy?

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