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Old 02-13-2014, 03:26 PM   #1
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Chinese "Shadow Loan" Defaults: The New Global Financial Crisis?

Hey guys, put together some info from a few sources about the shadow banking "investment product" in China that has defaulted on the first five out of six total payouts to shareholders.

http://blog.gainesvillecoins.com/201...nancial-crisis

tl;dr "Trust" marketed through #2 bank in China made 1 billion yuan ($126 million) loan to failing coal company, sold shares of loan as "investment product". Coal company shits the bed, trust company gets stiffed, investors lose everything instead of making promised 9.8% return.

This is "Trust Equals Gold" that has melted down. PBOC may not bail this one out, after the heat they got for bailing out Trust Equals Gold. Financial regulators have been warning about loans to coal and heavy industry.

Personally, I think this is why physical gold demand in China hasn't dropped after Lunar New Year this time.
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