The stimuli frenzy continues. China has pledged to issue 2 Trillion Yuan (USD 284bln) of sovereign debt as part of fresh fiscal stimulus to stimulate national consumption and to help local governments tackle local debt problems. They will “fix” the population problem by providing 800 yuan per month per child to families with two or more children. And finally, China will also consider the injection of up to 1 trillion yuan of capital into its biggest state banks to make sure they can support the struggling economy. On the heels of those measures, the chinese equity market is up 16%+ for the week, after 5 years of struggling and deleveraging the real estate excesses of the last 2 decades. In the U.S. markets continue to rally to new all time highs while gold also prints new all time highs, signaling that this debt fueled party has an embedded cost.
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