If you grow in love, meditation will happen like a shadow. Love and meditation are two aspects of the same coin; if you have gained control of the one aspect, the other follows. If you meditate, love will follow – if you love, meditation will follow. This you have to choose.
- Research Shows What Living Near A Forest Can Do To The Human Brain – Collective Evolution
Sunday, October 22, 2017 – 00:09
- A Steady Stream of Self-Love – Heavenletters
Sunday, October 22, 2017 – 00:08
- 11 Essential Oils that Enhance Lucid Dreaming Abilities – Waking Times
Saturday, October 21, 2017 – 12:22
- Facing Your Music… – The Creator Writings
Saturday, October 21, 2017 – 09:00
Vía The Galactic Free Press http://ift.tt/2zF61Jw
European research from the Max Planck Institute for Human Development in Germany suggests that city dwellers who live near nature experience positive effects on their brains compared to their purely urban counterparts, especially on the amygdala, the brain’s integrative center for emotions, emotional behaviour, and motivation. When we think of stress or fear responses, we should be thinking of the amygdala.
This research should come as no surprise, since the physiological and psychological benefits of nature are well documented. In our article “How Walking In Nature Changes The Brain,” we explored the study led by Gregory Bratman, which suggested that being in nature can potentially change our brains and positively impact our health:
Researchers conducted a study which asked randomly selected participants to spend 50 minutes walking in either a natural or urban setting, and to submit to a series of psychological assessments before and after the walk. They found that volunteers who walked through a lush, green portion of Stanford campus showed improve cognitive function and mood compared to those who walked near heavy traffic for the same period of time. However, while this study showed that nature could have a positive effect on mental well-being, it did not examine the neurological mechanisms underlying this change.
Similarly, a more CE recent article, “Study Shows What Living In A ‘Greener’ Neighbourhood Can Do For Your Health,” also delves deeper into the benefits of living in green spaces:
Researchers at the University of New Brunswick collected data on 1.3 million non-immigrant Canadian adults living in the 30 largest cities in the country. The data analyzed was dated from 2001-2012, and the researchers measured the amount of greenery around the participants’ houses, from giant trees to tiny shrubs. Their findings suggest that the more greenery people live around, the lower their risk of premature death.
City dwellers are at higher risk of developing psychiatric illnesses such as depression, anxiety disorders, and schizophrenia than people who live in rural areas, and the amygdala is more active in people who live in cities, since this part of the brain is important in processing stress and reactions to danger.
There are many reasons for this, the most obvious being the noise, pollution, and crowds that come with city living, all of which can factor into chronic stress.
According to the study’s lead author, Simone Kühn, “Research on brain plasticity supports the assumption that the environment can shape brain structure and function. Studies of people in the countryside have already shown that living close to nature is good for their mental health and well-being. We therefore decided to examine city dwellers.”
Kühn and her team looked at 341 adults aged 61 to 82. They asked participants to undergo MRI scans to determine the structure of stress-processing brain regions, particularly the amygdala, and asked them to complete memory and reasoning tests.
They combined the MRI data with geoinformation about participants’ locations in order to better examine the influence that nature has on these brain regions.
The research showed that those who lived in a city but closest to a forest were more likely to have a physiologically healthy amygdala structure and therefore better able to cope with stress. This information was still true even when they factored in other influences like education and income levels.
The team commented that “at the moment it is not possible to determine whether living close to a forest has positive effects on the amygdala, or whether people with a healthier amygdala are more likely to choose to live in an urban area close to a forest.”
More Research Shows How Nature Benefits Our Bodies
But other research has suggested that when we bring ourselves outdoors and place our feet directly on the ground (not concrete), we can reduce our stress levels and potentially treat a number of degenerative diseases. Here is an excerpt from our article “Studies Show What Happens To The Human Body When We Walk Barefoot On Earth” that explores this idea more thoroughly. From the article:
A study published a couple of years ago in the Journal of Environmental and Public Health titled “Earthing: Health Implications of Reconnecting the Human Body to the Earth’s Surface Electrons” postulates that earthing could represent a potential treatment/solution to a variety of chronic degenerative diseases.
It concluded that simple contact with the Earth, through being either outside barefoot or indoors connected to grounded conductive systems, could serve as a natural and “profoundly effective environmental strategy” against chronic stress, ANS dysfunction, inflammation, pain, poor sleep, disturbed HRV, hyper-coagulable blood, and many common health disorders, including cardiovascular disease.
If you’d like to learn more, please visit “Studies Show What Happens To The Human Body When We Walk Barefoot On Earth” to access more studies.
Vía The Galactic Free Press http://ift.tt/2yBABpA
When you truly Love yourself, what difficulties can there be? When you love yourself, what greater Proof of Love could you have from anywhere? I ask you to claim your own Love. Your Name is deeply embedded in My Heart and My Love. Your Love and My Love are the One and the Same. You are Mine, as I am yours.
Love Yourself, and worries no longer exist. Your basic source of worry has been that you feel unLoved, or, at the very least, not Loved enough.
Yes, of course, this is the case. Lack of Love is the crux of all worries. When a Loved One flies the coop, you protest. Whether your Loved One leaves you from personal choice or from leaving Earth, you howl that you are bereft of Love. When Loved Ones innocently die, you may feel: “How could they, how dare they go leave Me alone without them. Who is going to love me now?”
Through thick and thin, Beloveds, Love Yourself. Then what will you mourn? Love Yourself as I do Love you, for you art My Very Self.
You are Loveworthy. When you Love yourself, you are not forlorn. Stop gazing at disparity, and you will not conceive of even the concept of loneliness. You will be your own steady Stream of Love. You will be complete unto yourself. When you Love yourself, what imagined lack can hold you in its thrall?
Trade in loss for Love instead.
Instead of being fraught with worry and rue and sorrow and feeling sorry for being imperfect, fill yourself with Love. When it comes to Love, take Love out from its confines.
Love is your Natural Prerogative, yet you wrapped up your Love and put it away. Instead of Loving from the Sun of Your Heart, you called for Love to come to you from somewhere far away. You are learning, dear Ones, that there is nowhere else but within. There is nowhere else, and there is no one else. You are It, for you are naught but Myself. There is no separation in this Universe.
When you feel cast aside, it is you who has cast yourself aside. Come to your Inner Chambers with Me.
There is no individual you. You made this individual appurtenance up. You have no valid Identity but Oneness. There is no living separately from Me. Oneness is not alone. Oneness is Wholeness. Loneliness does not exist. It’s something made up. Foreswear loneliness. Whatever you may think, you merit Oneness. You are nothing but Oneness. No longer attach yourself to an emptiness that does not exist.
You pulled the wool over your own eyes. You sold yourself on a fake I.D. Your fake I.D. does not cross borders, Beloveds. A fake I.D. makes you think you are isolated. Isolation is a false front. Come out of the shadows. Face front. Admit your One Self to all the Love that is yours. Reclaim Love.
There is no lack of Love. When you think so, you side-swipe yourself. You protest and finagle away your birthright. In so doing, you fling yourself away from the Kingdom of Heaven. The troubles of the world come from this disavowal of your True Heritage. Put your ignorance away. You have no right to it.
I know. I know all your excuses. You mistake humility. You call humility arrogance, and arrogance humility. Certainly it is not humility when you manufacture that you know better than what I say. This is not your modesty. This is your ignorance which is a form of immodesty. It is immodest of you to raise your own flag.
What do you think it means when you hear: “To Thine Own Self Be True.”
Permanent link to this Heavenletter: http://ift.tt/2yyBlMp – Thank you for including this when publishing this Heavenletter elsewhere.
Vía The Galactic Free Press http://ift.tt/2yA6Be2
China's Belt and Road Initiative – the New Silk Road – will spark the country's development and turn the dream into reality…
It all starts with Hong Kong as a major BRI financing hub.
Now that President Xi Jinping has been duly elevated to the Chinese Communist Party pantheon in the rarified company of Mao Zedong Thought and Deng Xiaoping Theory, the world will have plenty of time to digest the meaning of “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.”
Xi himself, in his 3½-hour speech at the start of the 19th Party Congress, pointed to a rather simplified “socialist democracy” – extolling its virtues as the only counter-model to Western liberal democracy. Economically, the debate remains open on whether this walks and talks more like “neoliberalism with Chinese characteristics”.
All the milestones for China in the immediate future have been set.
- “Moderately prosperous society” by 2020.
- Basically modernized nation by 2035.
- Rich and powerful socialist nation by 2050.
Xi himself, since 2013, has encapsulated the process in one mantra; the “Chinese dream”. The dream must become reality in a little over three decades. The inexorable modernization drive unleashed by Deng’s reforms has lasted a little less than four decades. Recent history tell us there’s no reason to believe phase 2 of this seismic Sino-Renaissance won’t be fulfilled.
Xi emphasized, “the dreams of the Chinese people and those of other peoples around the world are closely linked. The realization of the Chinese dream will not be possible without a peaceful international environment and a stable international order.”
He mentioned only briefly the New Silk Roads, a.k.a. Belt and Road Initiative (BRI) as having “created a favorable environment for the country’s overall development”. He didn’t dwell on BRI’s ambition and extraordinary scope, as he does in every major international summit as well as in Davos earlier this year.
But still it was implicit that to arrive at what Xi defines as a “community of common destiny for mankind”, BRI is China’s ultimate tool. BRI, a geopolitical/geoeconomic game-changer, is in fact Xi’s – and China’s – organizing foreign policy concept and driver up to 2050.
Xi has clearly understood that global leadership implies being a top provider, mostly to the global South, of connectivity, infrastructure financing, comprehensive technical assistance, construction hardware and myriad other trappings of “modernization”.
It does not hurt that this trade/commerce/investment onslaught helps to internationalize the yuan.
It’s easy to forget that BRI, an unparalleled multinational connectivity drive set to economically link all points Asia to Europe and Africa, was announced only three years ago, in Astana (Central Asia) and Jakarta (Southeast Asia).
What was originally known as the Silk Road Economic Belt and the 21st Century Maritime Silk Road were endorsed by the Third Plenum of the 18th CCP Central Committee in November 2013. Only after the release of an official document, “Visions and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Roads”, in March 2015, the whole project was finally named BRI.
According to the official Chinese timeline, we’re only at the start of phase 2. Phase 1, from 2013 to 2016, was “mobilization”. “Planning”, from 2016 to 2021, is barely on (and that explains why few major projects are online). “Implementation” is supposed to start in 2021, one year before Xi’s new term expires, and go all the way to 2049.
The horizon thus is 2050, coinciding with Xi’s “rich and powerful socialist nation” dream. There’s simply no other comprehensive, inclusive, far-reaching, financially solid development program on the global market. Certainly not India’s Asia-Africa Growth Corridor (AAGC).
Have BRI, will travel
It starts with Hong Kong. When Xi said, “We will continue to support Hong Kong and Macau in integrating their own development into the overall development of the country”, he meant Hong Kong configured as a major BRI financing hub – its new role after a recent past of business facilitator between China and the West.
Hong Kong’s got what it takes; convertible currency; total capital mobility; rule of law; no tax on interest, dividends and capital gains; total access to China’s capital market/savings; and last but not least, Beijing’s support.
Enter the dream of myriad financing packages (public-private; equity-debt; short-long term bonds). Hong Kong’s BRI role will be of the Total Package international financial center (venture capital; private equity; flotation of stocks and bonds; investment banking; mergers and acquisitions; reinsurance) interlinked with the Greater Bay Area – the 11 cities (including Guangzhou and Shenzhen) of the Pearl River Delta (light/heavy manufacturing; hi-tech venture capitalists, start-ups, investors; top research universities).
That ties up with Xi’s emphasis on innovation; “We will strengthen basic research in applied sciences, launch major national science and technology projects, and prioritize innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies.”
The integration of the Greater Bay Area is bound to inspire, fuel, and in some cases even mould some of BRI’s key projects. The Eurasian Land Bridge from Xinjiang to Western Russia (China and Kazakhstan are actively turbo-charging their joint free trade zone at Khorgos). The China-Mongolia-Russia economic corridor. The connection of the Central Asian “stans” to West Asia – Iran and Turkey. The China-Pakistan Economic Corridor (CPEC) from Xinjiang all the way to Gwadar in the Arabian Sea – capable of sparking an “economic revolution” according to Islamabad. The China-Indochina corridor from Kunming to Singapore. The Bangladesh-China-India-Myanmar (BCIM) corridor (assuming India does not boycott it). The Maritime Silk Road from coastal southeast China all the way to the Mediterranean, from Piraeus to Venice.
Yiwu-London freight trains, Shanghai-Tehran freight trains, the Turkmenistan to Xinjiang gas pipeline – these are all facts on the ground. Along the way, the technologies and tools of infrastructure connectivity – applied to high-speed rail networks, power plants, solar farms, motorways, bridges, ports, pipelines – will be closely linked with financing by the Asia Infrastructure Investment Bank (AIIB) and the security-economic cooperation imperatives of the Shanghai Cooperation Organization (SCO) to build the new Eurasia from Shanghai to Rotterdam. Or, to evoke Vladimir Putin’s original vision, even before BRI was launched, “from Lisbon to Vladivostok”.
Xi did not spell it out, but Beijing will do everything to stay as independent as possible from the Western Central Bank system, with the Bank of International Settlements (BIS) to be avoided in as many trade deals as possible to the benefit of yuan-based transactions or outright barter. The petrodollar will be increasingly bypassed (it’s already happening between China and Iran, and Beijing sooner rather than later will demand it from Saudi Arabia.)
The end result, by 2050, will be, barring inevitable, complex glitches, an integrated market of 4.5 billion people mostly using local currencies for bilateral and multilateral trade, or a basket of currencies (yuan-ruble-rial-yen-rupee).
Xi has laid China’s cards – as well as the road map – on the table. As far as the Chinese Dream is concerned, it’s now clear; Have BRI, Will Travel.
via Read More Here..
Khazarian Mafia has Gone Mad, Follows the French Revolution’s Reign of Terror By Sajjad Shaukat for Veterans Today Renowned historians agree that besides other causes, major cause of the French Revolution of 1789 was the class distinction between the privileged and the unprivileged, which rapidly increased under the reign of King Louis XVI who had […]
Vía Veterans Today http://ift.tt/2gtLL57
As Americans gear up to celebrate Halloween at the end of October, a recent survey has revealed the fears that really keep people up at night.
The Chapman University Survey of American Fears polled 1,207 U.S. adults on their levels of fear across 80 different categories.
As Statista's Niall McCarthy notes, like last year, corruption of government officials came top in 2017, with 74.5 percent of U.S. adults saying it makes them "afraid" or "very afraid".
You will find more statistics at Statista
The unrest and uncertainty of Donald Trump's presidency has had a significant influence on this year's ranking.
With the U.S. health system still engulfed by chaos, 55.3 percent of respondents are fearful of the American Healthcare Act/Trumpcare. The president's decision to withdraw from the Paris Climate Accords has also had an impact with 48 percent afraid of global warming and climate change and 44.9 percent fearful of air pollution.
The threat of war between the U.S. and North Korea is also starting to touch a nerve. 48.4 percent of Americans fear U.S. involvement in another world war while 47.5 percent are afraid the regime in Pyongyang will use nuclear weapons.
via Read More Here..
Conscious Conversations Central:HATJ & RKB Oct 2017 Hearing Impressions and Energetics Conversation with Katie Hosso and Lisa Flemino Rush – the NC support team that was present during the Oct 18, 2017 hearing of Heather Ann Tucci-Jarraf and Randall Keith Beane in Knoxville, TN Join the Conversation! Join our
Vía I UV http://ift.tt/2xeRzGn
Submitted by John Mauldin
My good friend Peter Boockvar recently shared a chart with me. The University of Michigan’s Surveys of Consumers have been tracking consumers and their expectations about the direction of the stock market over the next year. We are now at an all-time high in the expectation that the stock market will go up.
The Market Ignores Monetary Uncertainty
Bullish stock market sentiment has gotten extreme again, according to Investors Intelligence. Bulls rose 2.9 pts to 60.4 after being below 50 one month ago. Bears sunk to just 15.1 from 17 last week. That’s the least amount since May 2015. The spread between the two is the most since March, and II said, “The bull count reenters the ‘danger zone’ at 60% and higher. That calls for defensive measures.” What we’ve seen this year the last few times bulls got to 60+ was a period of stall and consolidation. When the bull/bear spread last peaked in March, stocks chopped around for 2 months. Stocks then resumed its rally when bulls got back around 50. Expect another repeat.
Only a few weeks ago the CNN Fear & Greed Index topped out at 98. It has since retreated from such extreme greed levels to merely high measures of greed. Understand, the CNN index is not a sentiment index; it uses seven market indicators that show how investors are actually investing. I actually find it quite useful to look at every now and then.
The chart below, which Doug Kass found on Zero Hedge, pretty much says it all. Economic policy uncertainty is at an all-time high, yet uncertainty about the future of the markets is at an all-time low.
Why This Is Happening Now
At the end of his email blitz, which had loaded me up on data, Dougie sent me this summary:
- At the root of my concern is that the Bull Market in Complacency has been stimulated by:
- the excess liquidity provided by the world’s central bankers,
- serving up a virtuous cycle of fund inflows into ever more popular ETFs (passive investors) that buy not when stocks are cheap but when inflows are readily flowing,
- the dominance of risk parity and volatility trending, who worship at the altar of price momentum brought on by those ETFs (and are also agnostic to “value,” balance sheets,” income statements),
- the reduced role of active investors like hedge funds – the slack is picked up by ETFs and Quant strategies,
- creating an almost systemic "buy the dip" mentality and conditioning.
- when coupled with precarious positioning by speculators and market participants:
- who have profited from shorting volatility and have gotten so one-sided (by shorting VIX and VXX futures) that any quick market sell off will likely be exacerbated, much like portfolio insurance’s role in a previous large drawdown,
- which in turn will force leveraged risk parity portfolios to de-risk (and reducing the chance of fast turn back up in the markets),
- and could lead to an end of the virtuous cycle – if ETFs start to sell, who is left to buy?
On the Brink of the Largest Policy Error
The chart above, which shows the growing uncertainty over the future direction of monetary policy, is both terrifying and enlightening. The Federal Reserve, and indeed the ECB and the Bank of Japan, went to great lengths to assure us that the massive amounts of QE that they pushed into the market would help turn the markets and the economy around.
Now they are telling us that as they take that money back off the table, they will have no effect on the markets. And all the data that I just presented above tells us that investors are simply shrugging their shoulders at what is roughly called “quantitative tightening,” or QT.
In the 1930s, the Federal Reserve grew its balance sheet significantly. Then they simply left it alone, the economy grew, and the balance sheet became a nonfactor in the following decades. I don’t know why today’s Fed couldn’t do the same thing.
There really is no inflation to speak of, except asset price inflation, and nobody really worries about that. We all want our stocks and home prices to go up, so there’s no real reason for the central bank to lean against inflationary fears; and raising rates and doing QT at the same time seems to me to be taking a little more risk than necessary.
And they’re doing it in the midst of the greatest bull market in complacency to emerge in my lifetime.
Do they think that taking literally trillions of dollars off their balance sheet over the next few years is not going to have a reverse effect on asset prices? Or at least some effect? Is it really worth the risk? Remember the TV show Hill Street Blues? Sergeant Phil Esterhaus would end his daily briefing, as he sent the policemen out on their patrols, with the words, “Let’s be careful out there.”
* * *
Sharp macroeconomic analysis, big market calls, and shrewd predictions are all in a week’s work for visionary thinker and acclaimed financial expert John Mauldin. Since 2001, investors have turned to his Thoughts from the Frontline to be informed about what’s really going on in the economy. Join hundreds of thousands of readers, and get it free in your inbox every week.
via Read More Here..
Back in March, we explained why the “fate of the world economy is in the hands of China’s housing bubble.” The answer was simple: for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth will keep rising. However, unlike the US where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing: three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US with the remainder invested financial assets.
Beijing knows this, of course, which is why China periodically and consistently reflates its housing bubble, hoping that the popping of the bubble, which happened in late 2011 and again in 2014, will be a controlled, “smooth landing” process.
The other reason why China is so eager to keep its housing sector inflated – and risk bursting bubbles – is that as shown in the chart below, in 2016 the rise of property prices boosted household wealth in 37 tier 1 and tier 2 cities by RMB24 trillion, almost twice the total local disposable income of RMB12.9 trillion. For any Fed readers out there, that’s how you create a wealth effect, fake as it may be.
Unfortunately for China, whose record credit creation in 2017, and certainly in the months leading up to the 19th Chinese Communist Party Congress which started last week, has been the primary catalyst for the “global coordinated growth”, the good times are now again over, and according to the latest real estate data released last week, property sales in China dropped for the first time since March 2015, or more than two-and-half years, in September and housing starts slowed sharply reinforcing concerns that robust growth in the world’s second-largest economy is starting to cool.
Property sales by floor area fell 1.5% in September from a year earlier, compared with a 4.3% increase in August and a 34% jump in September 2016, according to Reuters calculations based on official data released on Thursday. That marked the first annual decline since the start of 2015. Separately, new construction starts by floor area, a volatile but telling indicator of developers’ confidence, rose just 1.4% in September on-year, slowing from a 5.3% increase in August, according to Reuters calculations.
“The negative September sale number shows that, unequivocally, the property boom has peaked,” Rosealea Yao, a property analyst at Gavekal Dragonomics told Reuters. “We have seen some big rebounds at the end of the first and second quarter, but given how fast the sale numbers are declining, we expect no big rebound this time.”
Echoing our concerns above, Reuters writes that “real estate, which directly affects 40 other business sectors in China, is a crucial driver for the economy but also poses a major risk as Beijing looks to tame soaring home prices without triggering a crash or a sharp drop in construction activity.
The easing in property activity appeared to drag on broader growth in the third quarter, and as many economists predicted China’s GDP rose 6.8% in the third quarter from a year earlier, down from 6.9% in the second quarter. And while property investment did rise 9.2% in September, picking up pace from an expansion of 7.8 percent in August, analysts warned such investment usually lags sales trends by up to six months.
Still, as discussed here previously, while home prices have sharply softened in China’s biggest, Tier-1, cities in recent months in response to a flurry of government cooling measures, property bubbles are still a threat in other parts of the country.
Moreover, in addition to many buyers purchasing second houses on credit as Deutsche Bank pointed out last month, high prices are forcing many home buyers to take on more debt, weighing on future household consumption and leaving banks more exposed to any property downturn even as Beijing looks to rein in financial system risks. Household loans, mostly mortgages, rose to 734.9 billion yuan ($110.80 billion) in September from 663.5 billion yuan in August, despite rising mortgage rates, according to Reuters calculations. Short-term loans also soared in the third quarter, suggesting speculators may be trying to circumvent property cooling measures, economists said.
What is most concerning, however, is that the recent sharp decline takes place even as policymakers have made stabilizing the overheated property market a top priority ahead of a critical Communist Party Congress this week, reiterating the need to avoid dramatic price swings which they fear could threaten the financial system and harm social stability.
Adn while a downward inflection point in China’s housing market – which accounts for a third of China’s economic growth – is bad, what follows is far worse.
According to a fascinating new WSJ report, China’s housing downturn is likely far worse than meets the eye, as under Beijing’s direction more than 200 cities across China for the last three years have been buying surplus apartments from property developers and moving in families from condemned city blocks and nearby villages. China’s Housing Ministry, which is behind the purchases, said it plans to continue the program through 2020. The strategy, supported by central-government bank lending, has rescued housing developers and lifted the property market,
As the WSJ notes, this latest backdoor bailout “It is a sharp illustration of China’s economy under President Xi Jinping and the economic challenges he will face as he renews his 5-year term at a twice-a-decade Communist Party Congress that opens on Wednesday.”
Rosealea Yao from Gavekal Dragonomics, who was also quoted above, wrote that “the government’s creativity in coming up with new ways of supporting the housing market is impressive—but it’s also an indication that it still depends on housing for growth.“
While traditionally, China’s government used to build homes for families who lost theirs to development or decay, last year, local governments, from the northeast rust belt to the city of Bengbu with 3.7 million amid the croplands of central Anhui province, spent more than $100 billion to buy housing from developers or subsidize purchases, according to Gavekal Dragonomics.
In other words, the reason why China no longer has ghost cities is because the government is buying them in just as concerning, “ghostly” transcations.
The underlying structure is yet another typically-Chinese ponzi scheme:
Underpinning the strategy is a cycle of debt. Cities borrow from state banks for purchases and subsidies, then sell more land to developers to repay the loans. As developers build more housing, they, too, accrue more debt, setting up the state to bail them out again. The burden on the state rises, as does the risk of collapse.
What is astounring, is that while the government has tried other ways of filling apartments, such as offering cash subsidies to encourage rural migrants to buy in urban areas, the program is the first large-scale case of the government becoming a home buyer itself. In May, Lu Kehua, China’s deputy housing minister, said the program has “played a positive role in steady economic growth,” and called for a push to clear housing inventory as early as possible, according to an article by the official Xinhua News Agency.
Well, of course, it’s played a “positive role” – when the government itself is buying half the units it bought (see chart above), what can possibly go wrong? Well, pretty much everything if the housing market is once again headed lower and with the explicit backing and funding of the Chinese government.
Some more fascinating details on how China fooled the world into believing back in 2014 that its recently burst housing bubble had “smoothly landed” and was again recovering:
Three years ago, Bengbu’s housing prices were falling. Housing inventory in 2014 would have taken almost five years to fill at the pace of sales at the time, said Shanghai-based research firm E-House China R&D Institute. Around the same time, the Bengbu government began to gobble up homes, and it has continued to do so. The city said it bought nearly 6,000 apartments from developers last year.
Housing stock in Bengbu was down to four months in September, a city official overseeing the government program said in September. Home prices had increased by 15% in August from a year earlier. That exceeded the 8.2% growth across a benchmark of 70 cities compiled by the national statistics agency.
Beijing and Shanghai residents are used to such price surges, but it is unusual in a smaller Chinese city lacking any particular tourism or job-market appeal.
Naturally, China would rather not have details of its latest bailout program spread too far:
Bengbu officials are wary about publicizing its hand in the market for fear of driving up prices and speculative buying. “We don’t mention it as much now as in the past two years,” the city official in charge of the program said. “Prices have been fluctuating a lot, and it’s a little bit out of control.”
Since the launch of the program, which is an explicit subsidy to Chinese real-estate developers who are directly selling to the government, things have predictably normalized. In fact, the outcome has been a little too frothy:
In 2015, groups of families on government-organized apartment tours started showing up, said Ding Qian, a planner at the developer, Bengbu Mingyuan Real Estate Development. By October 2016, the developer had sold 20 blocks of finished apartments, about 10% of them paid for with government funds, Ms. Ding said.
“We have run out of apartments to sell,” she said. The developer has sped up construction of 42 new blocks, about 4,000 apartments, and has raised prices by 40%.
All thanks to the government, which is lending to local governments to avoid the impression it is directly involved in bailing out China’s “wealth effect”:
The Bengbu official in charge of the program declined to disclose details about the city’s apartment purchases, but said the city had borrowed 10 billion yuan ($1.5 billion) of the 19 billion yuan of available credit extended by China Development Bank for housing purchases and subsidies.
Local governments in 2016 borrowed 972.5 billion yuan from the bank, the government’s main housing lender, nine times the level three years earlier, according to E-House China R&D Institute, which compiled data from official bank and government websites. More than half of last year’s loans went to purchases or subsidized buying, according to the official Xinhua News Agency. The rest of the loans funded housing projects built by the government.
What is most firghtening, is that despite the decline in property sales, the government’s role in the housing market continues to grow according to the WSJ, and here is a stunning statistic: Of all the residential floor space sold in China last year, 18% was purchased by government entities or with state subsidies, E-House China determined from official government data. The share could reach 24% this year, the firm said.
To paraphrase: Beijing is now the (covert) marginal buyer of a quarter of all Chinese real estate. That, in itself, is a mindblowing statistic. What is scarier, is that despite this implicit backstop, property sales are once again declining after 30 months of increases. One can only imagine the epic crash that would ensure at this moment, if – for some reason – the government bid were to be pulled, and just how spectacular the ensuing global depression would be as the rug is pulled from below the middle class of the world’s fastest growing economy.
via Read More Here..