It is clear that artificially low interest rates and massive money printing by the government is fueling this bubble. But few know about the engine behind the monuments bubble- A giant shark loan ponzi scheme.
Beside that, we didn't find a lot of people who agree with our prediction from 11 big surprises for the next decade:
Beside that, we didn't find a lot of people who agree with our prediction from 11 big surprises for the next decade:
China Bluff Exposed, Regime Overthrown- China's communist regime continued to print money, lending it to everybody that wanted and didn't want it. The giant housing, infrastructure, and manufacturing bubble came to a violent crash when the debts where not paid and inflation forced the authorities to tighten despite massive unemployment. The combination of high inflation and high unemployment in the urban centers took the people to the streets. The Chinese citizens refused to accept state intervention in the economy and their personal life demanding more personal and economic freedom resulting in prolonged civil unrest which almost reached a full scaled civil war. The collapse of the Chinese regime and economy resulted in a colossal bust for commodity prices, albeit temporarily and caused a severe recession in Australia, Brazil, Russia, Argentina, and the Gulf States.
In this article we will show how the ponzi shark loan scheme works and why we think the regime in China will fall. Our research is based on sources INSIDE CHINA
This is how this ponzi scheme works:
Local governmental officials, that are demanded from the government to produce double digit GDP growth numbers give real estate developers permits to build housing projects in return for bribes. They also get bribes in return for allowing the shark loan companies to operate under their jurisdiction. some of them are active partners in shark loan businesses. For example, a party secretary of legal affairs, that controls the public security bureau, which is a court and prosecutor division of government in yongkang city, in zhe jiang province tired to run abroad using a passport in 2009 after he found out he can’t repay 60million Yuan. In li Every scheme has a ring leader who's job is to collect money from all the participants in the ponzi scheme. When some of these ponzi schemes blow up, the party leaders always get bailed out first, and some even ask local business owners to lend them money, and then bail out their own personal fund. After that the ring leader turns himself in and gets protection from the local government.
Most of the funds that are collected in this classic ponzi finance go to local land purchases and real estate development. Part of the funds are used in order to pay back the rolling loan. The short term interest rate in this black market is very high and ranges between 20%-150% annual rate. The sources of the ponzi funds are diverse, as ordinary citizens, banks with corrupted bank officials, and state enterprises play the game.
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A Chinese reader wrote to us about the civil unrest:
“From internet chat room, and the feedback from some breaking news, for instance, the killing of court judge, the killing of police, the killing of school kids, maybe 95% percent feedback are anti government. small scale social unrest are lot, but the local government has been able to kill it at very early stage fast to prevent spreading. In a city in jiangshu province, a middle school student crossed the street, and bumped into the mirror of a car, the driver of the car slapped the face, and his wife cursed the kid very loudly, and he said something he is the leader ( in chinese, "lindao"), thousand local people congregated, block the car, block the police car, block the fire fighter, then the military police is out, it is going on till middle night, no one being able to rescue the driver and quell the crowd.
More Here..(snippet)
A Chinese reader wrote to us about the civil unrest:
“From internet chat room, and the feedback from some breaking news, for instance, the killing of court judge, the killing of police, the killing of school kids, maybe 95% percent feedback are anti government. small scale social unrest are lot, but the local government has been able to kill it at very early stage fast to prevent spreading. In a city in jiangshu province, a middle school student crossed the street, and bumped into the mirror of a car, the driver of the car slapped the face, and his wife cursed the kid very loudly, and he said something he is the leader ( in chinese, "lindao"), thousand local people congregated, block the car, block the police car, block the fire fighter, then the military police is out, it is going on till middle night, no one being able to rescue the driver and quell the crowd.
It seems that the fake economies go on forever.
ReplyDeleteIf they are all ponzi scemes maybe they will never crash.
Only compared to a real economy will the stark contrast of real problems become obvious.
Wheres a real economy?
If this is true, and I suspect it is, as the sheeple never hear or see the real news, it appears the entire world economy will collapse in the near future.
ReplyDeleteYet govt's across the globe continue to spend fake money like its going out of style, the man behind the curtain may be exposed soon.
as a local from china, that is exactly many A share stock investors worried about.
ReplyDeletethe real estate is the life line of china economic growth, and the foundation is built on massive ponzi game.
The market is so scared of interest rate hike.it keep falling
Fake economies cannot perpetuate indefinitely; but it's kinda like eating Big macs, 6 sodas & 2 packs of lucky's everyday - yeah' you'll live awhile; but one day - no warning - BOOM!!!
ReplyDeleteYou take that exact same body; replace the cheesburgers with grass fed Angus, water and one good cigar at the end of a productive day & you have a body that will reach 100.
When the world economy fails ( we are all linked at the hip at this point) it will do so at break neck speed just like the "patient" above - there is no gas left in the tank; no reserves; nothing to fall back on - the heart is shot from all those Big macs - the lungs are shot from all those chenical laced Luckys - the bloodstream has been nuked from all the hormones in that imported beef and you can't move your feet without all of the above,
Therefore; unfortunatly, try as you may, you cannot get out of the way of the bus - which has just run you over while you were looking at it thru eyes that have been non productive for years. I mean - yes they open and close; but there is no glitter, no zest for life and no time to merely gaze at the miricale of life and simply be appreciative.
That is the world economic firestorm that awaits us - no one country can move independant of the other and they are ALL VERY SICK.
Meanwhile countries play footsie with each other while turning the entire planet into one big raging cesspool while trying to one up the footsie game.
No people; in the ultimate game of life we have learned relatively little and are about to pay for it dearly.
it is doubtful china regime will fall. they will crack down hard. they did it before in tiananmen square and back then the economy was far worst then it was today.
ReplyDeleteChina is not America. While the collapse of a Ponzi economy and property bubbles is tolerated by the American people convinced by being once beneficiaries of the advantages of “Free Trade” for a once industrially dominant country and even the losses of capitalism socialized for the taxpayer to pay without real protest as even its middle class is economically looted as its assets and pension savings are devalued. Unemployment expands for millions In the US in order to “save the system” and who knows where this will end, But it is the only system they know, this support for and faith in even imploding Capitalism may not be the case in China, where the people have an actual experiences in very recent years of the differences between capitalism and socialist industrial development and the benefits it brings.
ReplyDeleteUnder Mao there was generally slow, but steady economic development and incremental improvement in the peoples living standards as an industrial base was created for further improvement and the land was socialized in communes. Under Deng China was turned into a capitalist economy with backing from a state capitalist sector under a socialist signboard “Socialism with Chinese Characteristics”. The first step in changing from socialism to capitalism was to destroy collective ownership of the land to create individual land titles or “family farming” privatization. In an agricultural peasant society, this laid the economic basis for capitalism at the local everyday level for the vast majority the peasantry. The basis of any speculative Ponzi property bubble in America, or in China, is also dependent on land ownership titles. Deng promised that “some (including land speculators) would get rich first” in capitalist development and the rest of the people would soon follow in a sort of Reganite ‘trickle down” effect. Despite the pictures you see of huge pretty sky scrapers in Shanghai and Beijing, this kind of “development” of high priced million dollar apartments for the rich is meaningless to the ordinary people and most peasantry who still earn on average less than 2 or less dollars a day.
In short they have not enjoyed “rich American’ lifestyles at all, as promised by Dengist “communist” / capitalist development and the commodities they produce with cheap labor are now exported in an export of wealth economy. But China like the earlier U.S., is at the “Robber Baron” stage of capitalist monopoly development.
If that economy then implodes into years of depression after only thirty years of capitalism by widely expanding the existing poverty, they, in their hundreds of millions may be tempted to return to Maoist socialist economic development as a way out !
Can the new rich and their “communist” Party stop that with a police state?
I doubt it. Maoism also teaches military guerilla warfare against landlords and land speculators and that too, is a recent national experience still within living memory!
It makes little difference whether money is gold backed ,or paper, as long as it facilitates circulation and exchange of commodities. China has its own “non floating” paper currency ( not linked to gold /silver or the US dollar) recognized as sole legal tender in China ,the Yuan or Renminbi. The value of that paper money, may be easily abused by government and its value inflated away, by excess printing of currency.
ReplyDeleteThose interested in the printing of fiat Paper currencies and inflation creation scams may be interested in how the State in China has developed a “hidden” income source for itself in addition to normal tax revenues by creating inflation and devaluing the Yuan. China is an export economy 40% or so of the commodity wealth its people create is exported in exchange for Dollars or for currencies that can be exchanged for Dollars.
Some Marxists, would say its wageworkers are exploited for surplus value /profit. That its Chinese cheap labor wageworkers are paid less in wages for their labor time than the value their labor power creates and the surplus value is exported.
A first exploitation of workers in exported wealth production according to Marxists... Whatever.. Capitalists as the “good guys” say otherwise .But ,whatever is the source of the profits of the mostly foreign owned multinationals manufacturing the commodities , the profits are realized when the commodities are sold overseas and a part of the cash
Including the cost of the raw materials used up plus any Chinese profits then flows back to China for investing in the next round of production and commodity wealth export. .These dollar or other currencies flowing into China , are swapped by the government for printed Yuan, the only legal tender and the value of the ‘hard currency”
dollars is thereby removed and prevented from circulating in China ‘Sterilised”.
The cost of this currency swapping is a steady inflationary effect on the Yuan, as more Yuan is injected into the economy by the government to circulate instead of the billions of “swapped” imported dollar value circulating .
This is a second DOUBLE exploitation of the whole people through an inflationary tax on the peoples currency. . The swapped dollars are then invested for interest or dividends as vendor finance in purchasing US Treasuries, Fannie and Freddie property bonds or Euro treasuries or the like paper. Billions or trillions equal to the countries total foreign earned dollar import incomes are invested offshore . For example as is well known in US government treasuries as socialist ‘aid” helping American imperialism pay for its deficits for wars and militarism. There is a great fear by the Chinese that the value of trillions of dollars in Chinese savings invested as “aid” in western paper and bonds will be inflated away by the U.S.and the Wests printing presses.
Whether that Chinese States investment income earned from the now trillions in Foreign investments of the state and Sovereign wealth funds is being used primarily for the benefit of the Chinese people ,or to corruptly benefit only the rich ruling Elite and its “Communist” party officials directing these funds for them, is difficult to say. But corruption in Chinese capitalism as with American banksters like Goldman Sach
is notoriously widespread .
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Chinese yuan being revalued against U.S. Dow futures soar. Everything is peaches.
ReplyDelete"Chinese yuan being revalued against U.S. Dow futures soar. Everything is peaches. "
ReplyDeleteExept for the Americans when even those still with a job income can only afford to buy their clothing ,shoes and some food commodities ,when they are created by near slave level paid cheap labour workers.
Some americans may finish up barefoot and shoeless because they cannot now afford chinese sneakers.
Thats jobless "recovery"!
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ReplyDeleteScary stuff
ReplyDelete