For those of you unfamiliar with the term rehypothecation here is my post on it from a while ago but in short it means using the same real world collateral multiple times to secure loans. In London the same collateral is sold infinite times to investors who want safe reliable investments and who haven’t a clue what they are getting them selves in too.
This is usually done with Gold, Oil and other precious metals but In China it turns out they have done it with steel and possibly with copper and other more mundane products leaving more and more banks out of pockets as they try to collect on loans in default.
For those of you thinking that China was going to get us out of the big black hole caused by the fiat bankster scam here is how it will unfold in reality.
No steel, copper or other underlying collateral means that banks and the entire economy of China will collapse. The signs of this were already showing when masses of Chines buyers were defaulting on their shipments of steel and other commodities bought on the assumption prices would keep on rising.
The repercussions on the global economy are huge and nowhere more so then in Australia whose biggest market is China and with the implosion of Fortescue, Australians mega iron miner, and FOURTH LARGEST IN THE WORLD which had to apply for a debt waivers from it’s lenders while it was applying for loans up to $1.5 Billion From 20 Banks As Iron Prices Implode we can safely say that the mining boom in Australia is going bust.