Is Chinese Overleveraging Coming to Roost?

There has been no shortage of news in recent months-both financially and otherwise-to keep investors busy. The 2016 Rio Olympics garnered considerable attention as did the historical vote by the people of Great Britain to leave the European Union.

Investors have also been preoccupied with the Fed, and whether or not the central bank will raise interest rates again this year.

Somewhere in the middle of all this news and noise is the fact that the Chinese Yuan has been weakening. What makes this noteworthy is the fact that a weaker yuan has, in the past, triggered large amounts of stock selling and risk aversion. This time around, however, it appears to be flying under the radar-for now anyway.

At some point, however, perhaps very soon, investors will wake up and see what is happening with the yuan and put two and two together.

Why is China devaluing the yuan?

Simple. The yuan is being weakened to help support the slowing Chinese economy. More importantly, however, the yuan is being weakened to avoid the day of reckoning that may be long overdue.

It’s no secret that the Chinese economy has been overleveraged, and that some markets and debts have ballooned out of control.

At some point, this issue will come home to roost. When it does, look out.

The weaker yuan could be sending a signal that that world’s second largest economy is in worse shape than many think.

Remember the Chinese stock market volatility seen last summer? The type of volatility that spooks investors and spreads all over the globe?

There could be a lot more of that on the way. Maybe not tomorrow, next week or next month, but it’s coming. The only question is when.

Crazy amounts of debt and overleveraging always come with a price.

The situation brewing in China could very well be the catalyst for the next stock market crash, which we see coming sooner rather than later.

You can sit around and watch your portfolio go up in smoke, or you can take steps now to help secure your financial future. Steps like adding real, hard assets to your holdings. Hard, tangible assets like physical gold and silver.

These key precious metals have been considered a reliable store of wealth and value for thousands of years and have stood the test of time through bull and bear markets. They carry no counterparty risk, and may potentially provide a meaningful hedge against a number of economic issues including inflation, deflation, currency devaluation and more.

So what are you waiting for?

The Chinese deleveraging is going to take place-the only question is when. Don’t wait for the stock markets to drop by 50, 60, 70 percent or more. Take action now.

Explore your options for physical gold and silver ownership today. Speak with an Advantage Gold account executive about the potential benefits of owning these precious metals, and how you can even buy and hold them using your IRA account.

The day of reckoning is coming. Don’t delay. To get started, simply pick up the phone and call us today at 1-800-341-8584.

Tags: , , , , , , , , ,