China Faces An Impossible Trinity As Debt To GDP To Hit Over 300% In 2-3 Years

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Mark Melin
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Chinese financial engineers are currently in the process of testing what it calls the Impossible Trinity of market feats, a Deutsche Bank report says. The level of difficulty is high as China walks a debt tightrope with rising interest rates potentially creating a tricky headwind as China’s debt servicing costs reach levels hard to manage. Can capital controls mix with an independent monetary policy in China? The past few weeks has seen Chinese interest rates start to rise, the April 7 Deutsche Bank report noted. Titled “China Debt: Testing the ‘Impossible Trinity,’” it focused on three core issues: 1) A…

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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.

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