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What an Evergrande collapse means for gold, global growth - Steve Hanke

Kitco News

The ripple effect that the Evergrande crisis in China has on the markets extends beyond the stock markets; the global commodities complex will be impacted as well, said Steve Hanke, professor of applied economics of Johns Hopkins University.

“The markets are in turmoil today, mainly because of China and what’s going on there. We’ve got one of the big real estate outfits in China is going down the tubes, it’s going into bankruptcy, and no one really knows all the ramifications from that, that Evergrande is going down. So the question is, how is that going to affect the creditors, and how is the bankruptcy system going to actually work in China?” Hanke told David Lin, anchor for Kitco News, on Monday.

Hanke said that a collapse of Evergrande would imply a slowdown of growth in China.

“If this is going to have a big effect on China’s economy, that will be an effect on the metals market because China is a big demander, and if China slows down, that means the demand for base metals will slow down, and the price increases will probably not continue in such a bullish state as they’ve been,” he said.

For information on the Hanke-Cofnas gold sentiment index, watch the video above. Follow David Lin on Twitter: @davidlin_TV (

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