Global Real Estate Implosion: Coming to USA
Imagine you wanted more money and success, but instead of providing any value to earn that money, you just kept taking out new credit cards, one after another, and maxing them out as fast as you could. How do you think that would end? Would you call that a playbook for success? Or failure?
This is exactly what is happening on a global scale!
Countries printing money as ‘economic stimulus’ are no different than a person drowning in debt. It’s not real growth. It’s a complete illusion!
This level of irresponsible over-leveraging is a road to ruin in both cases. People go bankrupt…and countries collapse.
This is the failed playbook that both China and the US are operating on…the entire world in fact! This is why the Global Economic Reset is inevitable. And this is why gold in your possession is imperative.
I’ll show you more signs that are becoming crystal clear, and why China’s failing economy is an indicator of what is now on its way to the US
CHAPTERS:
0:00 Breaking News on China
2:03 Producer Price Index
6:59 Chinese Home Sales
8:40 Lack of Consumption
13:58 Credit Market
17:10 Spot Gold Market
SLIDES FROM VIDEO:
TRANSCRIPT FROM VIDEO:
Hey everyone. I know I had other plans, but the shocking developments in China over the last 24 hours could not wait. So brace yourself. China’s 10 year yields are plummeting at an alarming rate signaling an economy on the brink of a catastrophic implosion. This is an emergency you won’t want to miss and hit that like button and subscribe because I’m bringing you the shocking details right now. What caught my attention this morning is the fact that China has now announced that they are no longer going to report on youth unemployment. Why? Well, because it’s the youth that start revolutions and they don’t want us to know just how bad it is in China because China’s financial situation is so dire that they’re pleading with investments funds to stop being net sellers of stock. And also in their shadow banking sector, they are warning them not to sell products. It’s so important that you realize how this impacts you because we are all incestuously intertwined and you gotta ask yourself, Hmm, do you think our own government would ever keep things like this under wraps? The video is about to play. Sit back, jot down your questions. We need to talk about this some more. Coming up.
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I’m Lynette Zang, Chief Market Analyst here at ITM Trading a full service physical, gold and silver dealer specializing in custom strategies. And you have really better have a strategy ’cause things, the whole breakdown of the global economy is heating up and China could very well be that flame.
Let’s just dive right in because guess what, China can you believe this slides into deflation as consumer factory prices drop. Wow, for the first time since 2020, we certainly know what was happening in 2020. Take a look at this. That black line is CPI. So official inflation, thank you. And PPI, the massive drop in PPI, that’s Producer Price Index year-over-year. And we know if prices at the producer level are going down. Well yeah, it’s also going to show that your CPI is down. But here’s the reality. They need to accelerate all the government spending, raising government debt and do coordinated monetary and fiscal easing to break this debt deflation trap, right? So let’s see. We’ve got a problem with debt and the whole world has the same problem with debt and what is the solution? More debt. Well, let’s think about that. Has that worked? I mean, good God. Look at, look at Japan they’ve been doing it since the early nineties. All of this stimulus, all of this debt has it really stimulated the economy? No. So insanity is doing the same thing over and over again and expecting different results and the whole flipping world is doing the same thing. But I’m not really sure that they actually expect different results or that they’re speeding that up.
China sends finance experts to tackle regions debt. So how did they do this? Well, Beijing raises pressure on provinces to deal with bloated balance sheets as the economy stumbles. Because in order to make it look like China was growing and growing and growing, they were building cities with nobody to inhabit them. We know that we’ve talked about it so long, but the reality is, is it does not matter whether you are a government, a corporation, or an individual. The laws of economics works the same. You would if you continue to take on that credit card debt at some point that you’re gonna have trouble repaying it. So you’re just gonna be accumulating interest and compounding interest. And number two, somebody’s gonna say, Nope, no more credit. And we’ve already seen globally that’s central banks, which is what used to happen in a failed economy, are having to buy back the debt, the new debt that the governments are issuing. So guess what? Even governments have their credit limits. And you could see in this particular graph, which you know, starts out in 2000 and it’s not a whole lot of volatility. And by the way, that is when China’s currency, the yuan pegged to the US dollar and we built out the US corporations, built out the manufacturing sector in China. And you can see how it became more and more volatile because it is no longer pegged. Now China’s currency is free floating against the US dollar once they got lifted off. China’s new loans in July dropped to the lowest level since the global financial crisis. And that again goes all the way back to 2000. Well what does that mean? That means that demand is slowing. The enormous debts accumulated by China’s provinces have become an urgent problem for policymakers as they try to end the country’s long reliance on a debt fueled infrastructure binge to drive economic growth. One Goldman Sachs estimate puts the total local government debt pile at 13 trillion, including the liabilities of the off balance sheet entities known as local government financing vehicles. So yeah, when you first go and get a credit card and you go shopping, it looks like your economy is doing really well, but at some point you always pay the piper. And by the way, that is merely a guess because all of that off balance sheet, so much of that is hidden, nobody can see. And that’s true in China. And oh by the way, that’s true in the US as well. And so the question is, had they hit their limit?
Because their home sales, which is a big driver of the Chinese economy, like huge, even more than the US, dropped most in a year as the slow down work. Sinces sales of biggest developers dropped 33.1% from a year earlier. Slump is a blow to cash strap builders in this economic recovery. This is a huge big deal because those developers depend on new money. It’s a Ponzi scheme, it’s all a Ponzi scheme. The whole fiat system’s a Ponzi scheme. But these developers are counting on that new money to pay for the old money. So when you see a drop like this, it is a very, very big deal. And that economic boom that they expected once they lifted the lockdowns really has not materialized. Existing policies have so far failed to sustain a housing rebound, putting the government’s 5% annual economic growth target at risk. My goodness, home prices have resumed falling while property investment continues to shrink. Here you can look at it in a different way because the local authorities, so government authorities are counting on the revenues that they got from land sales to prop up their books and keep hidden all of that debt. So yikes, we’ve got a double whammy. We’ve got the developers and we’ve got the local governments.
I think we’ve got a big huge problem. Or China does. China’s stalling economy puts the world on notice because if China sneezes, the whole world gets a cold because we are all incestuously intertwined. As China’s economy flashes indications of decline, the consequences pose perils for countries around the globe because over the past decade, China, now listen to this data here, China has been the source of more than 40% of global economic growth. 40% the US is 22% and the EU is 9%. So China has been what’s made the global growth appear to be okay. They provided 40% of the global growth after this last decade. Long the centerpiece of a profit enhancing version of globalization China has devolved into the ultimate wild card in a moment of extraordinary uncertainty for the world’s economy. We are all in trouble no matter where it starts, it’s going around the world. Their trade plunges more than forecast in a blow to recovery. And that recovery after the lockdowns simply did not materialize. I mean, exports dropped 14.5% year over year in July and imports fall 12.4% much deeper than what was expected. This is what it looks like. Okay? So the black line are exports, the red line are imports and they are both dropping precipitously. Shipments to the US plummeted 23.1% in July according to the customs data exports to other markets in including Japan, South Korea, Taiwan, Asean, the EU, Brazil and Australia. All dropped by double digit percentages too. What do you think that’s really telling us? It’s telling us and showing us that demand around the world is falling, that deflation around the world is growing. And guess what? There’s only one way to fight deflation. That’s with inflation. It makes it really simple. It’s not like you got a thousand choices. You don’t, you have one. And all of this impacts global tax revenues. Yes, it impacts China’s tax revenues, but it is an indication for the whole world that we are all in frankly deep doo-doo.
But hey, let’s come out with a new consumption plan. Let’s try and inspire more people to go out and buy houses, which is where most of Chinese wealth is held. And hey, don’t you remember the protests? Right? So, but it’s doing little to boost growth. Yeah. Here’s China’s retail sales flat line. Now keep in mind too that China has been working on transitioning into a consumer driven economy. The US started that transition in the twenties. China started that transition in the 2000s. And oops, that went off a little bit. But promoting consumption is currently the key to restoring and expanding demand. Isn’t that interesting? People’s ability and expectation on consumption is still rather weak and the infrastructure and environment for consumption need to be improved. So what do governments do? They try and create programs where they target and they pinpoint because they think they have so much control, but ultimately because there are more of us than there are of them. So there’s more of the public than there are of the governments and the central banks. We really have control. And as we’ve reported over and over again, China in many way the population because they are the most controlled, are doing silent protests. So this lack of consumption could be part of that silent protest, just like refusing to have more than one child because it’s way too expensive and hey, they had a one child policy for a long time, right? But how do the Chinese protest? It’s hard for them to do it visibly. So they do it invisibly. And maybe this lack of consumption, this not going along with what the government wants, is telling us that. Because when you have a consumer driven economy, you gotta have the consumer consume. And I don’t care where you are. We are definitely seeing that in the US too.
But on top of all of that, hmm, stress is building in China’s 12 trillion on shore. That means the credit market in China. Well that it is like when, right? They reported this back in July. And guess what just happened? China’s finance or recently happened. China’s finance giants missed payments and alarm regulators and the markets. Oh. So not a month later we’re seeing the results of that. This is on Zhongzhi, a shadow bank. A shadow bank which we have all over the world. It’s a big problem because they are not under the purview of regulators, right? So all of this is also off balance sheet. Nobody really, really, really has a crystal clear picture on what a threat the shadow banks are to the system. But I’ve reported on this in the past from the BIS and the IMF. They know this is a big problem. So, so this shadow banker, the shadow banks in China are even expanded further and it combines characteristics of commercial and investment banking. So deposit taking banks and speculation taking banks, risk taking banks, private equity. So we’re going to issue this stock as well as wealth management. Mm-Hmm. Hmm mm Too much power in one place I’m thinking. But this property crisis, this is what I’m telling you, everything is interconnected has spread to the trust industry, which is where all of the shadow banks live. So the question is, has contagion begun? The biggest problem now is how to isolate the risks associated with Zhongzhi group so that it doesn’t cause confidence of the entire trust industry to collapse. All Ponzi schemes require new money and confidence, right? If the situation continues to worsen, expect the scale of the risks to be no less than when a leading property developer defaults because that is a loss of confidence. No more new money and they’re trying to pull out the old and boom, then that’s cut off. ’cause If you don’t hold it, you don’t own it. I don’t care where you are in the world, a total of 106 trust products, ’cause it’s easy to create them from nothing. They’re just contracts. It’s all counterparty risk worth 44 billion yuan defaulted this year through July. So a little bit more than half a year according to data provided by use trust, real estate investments accounted for 74% of that value. And we know that real estate has been hugely inflated all around the world.
Now what you’re looking at here is the spot gold market. They can create as much gold as they want to. As we know that China has been buying gold hand over fist. But look at what’s happening in the manipulated spot market. But boom, there is your cup formation? Has it broken out yet? No, it has not. But will it? Yeah, ultimately it will. You have a series of higher and higher lows. And in the meantime, what has the Chinese central bank been doing? The Chinese government been doing? Well, there you go. These are the China’s gold reserves and they have been accumulating gold because at the end of the day, whoever holds the gold retains their power. ’cause They retain their purchasing power. All the rest of it evaporates by divine.
Looks like a shift could be near to me. But make no mistake, China is, has fallen into deflation. One way to fight it is via inflation. One way for you to protect yourself is physical, gold and silver in your possession.
Because if you don’t hold it, you don’t own it. So if you have not yet started your gold and silver strategy, click that Calendly link below, talk to one of our specialists, create your own strategy. This is what we specialize in. And it’s based upon those patterns that have repeated for thousands and thousands of years. And you need more than gold and silver. This is your foundation, your wealth insurance, but you also need Food, Water, Energy, Security, Barterability, Wealth Preservation, Community and Shelter. And you can find that on Beyond Gold and Silver, where we help you create the food security, all of that whole mantra list. And we try and meet you wherever you are. So if you’re new at it, we’re gonna meet you there. If you’re an expert, join us. Join our community, join the Thrivers community, where like-minded people come together to help each other.
And please remember, we are all in this together. So if you haven’t yet, make sure you subscribe. Leave us a comment, give us a thumbs up and share, share, share. Because ignorance does not make you immune. It just leaves you vulnerable. And we saw what’s happening in Japan. We’re watching what’s happening in China. We saw what’s happened in recently in Argentina. These are all warnings. Please heed them and get yourself into a position where it just doesn’t matter. You have your gold, you have your silver, and you have everything else that you need to sustain a reasonable standard of living. So keep in mind, wealth shields are made of physical gold, physical silver in your possession. And until next we meet. Please be safe out there. Bye-Bye.
SOURCES:
https://www.ft.com/content/20e82fb4-681d-4f41-934c-d64be061351c
https://www.ft.com/content/e9e8c879-5536-4fbc-8ec2-f2a274b823b4
https://www.nytimes.com/2023/08/11/business/china-economy-trade-deflation.html
https://www.bloomberg.com/graphics/china-credit-2023-07/?sref=rWFqAg1Y
China Finance Giant’s Missed Payments Alarm Regulators, Markets – Bloomberg
