Chinas Economy Is On The Verge Of Collapse

Chinas economy might be much worse than many thought. What started gaining attention to all of this was the great collapse of the house business Evergrande back in 2021. Since then there's been a coverup to show face and it's only getting worse and worse.

With headlines now of Chinese homebuyers withholding mortgage payments for unfinished projects, a protest outside of banks demanding their savings money which turned violent and locked up many, housing developer crisis and more.

The Rise

China has been hammering it out as of the last few years in a all out effort to overtake the USD as the leading worlds currency. So far they have done a pretty decent job of it with US imports over 20% coming from China

Is Issue

With that many short cuts and shady tactics have taken place not only on its people but also from companies and businesses. Just as the government is trying to screw over the man it seems like businesses are starting to

The Collapse

It's speculated the China could very well default into a great depression within the next one to six months. This speculation comes from the following news and insights we know about the businesses, people and government there.

At the core of it all real estate once again is at its core. Just like the USA had a real estate bubble it seems like China is currently in one and that bubble has burst big time.

In 2018 and 2019 investors including every day people with some extra month invested into real estate, bought second properties and even started investing into buildings that were not even built yet in speculation that it would be cheaper to buy it now then it would be later. The thought was also it could always be sold later for a profit. Well once that starts happening we all know where that eventually turns right? A VERY over bought system with a ton of supply and a lowering demand.

To throw more on to the fire...

Builders

Builders have been speculated that they took investors funds and only started to build a property at a slow rate and then move a large portion of those funds out of the country. This caused a drastic slow down in building further driving up prices while builders seem to cash in the huge amounts of cream at the top into potential safe havens outside of the country.

Just take a look at stocks like Sunac China Holding Limited or Evergrade it starts to paint the starting of a very very bad mix.

Chinas banking system

The way most banking systems in the world work is what is called fractional banking. Here in the US a bank is required to have 10% of all funds on hand at all times while the other 90% the bank can loan out or do whatever they want with (for the most part) to further build capital. To me this is what is know as a modern day loan shark that is some how legal.

Well China once had this same policy however because of the boom and to try and grow the economy even faster they decided to lower that 10% required for banks. This now means many banks are sitting on far less than 10% of peoples money on hand to give back to them.

Think of it this way. Citizen A puts $1,000 into the bank. The bank then keeps $100 of that on hand a liquidity while $900 is loaned out or put into other what should be stable investments. For instance if you don't pay back your loan your car or house go to the bank.

And they say crypto and trading crypto is the real issue lol

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