THE BUBBLE THAT BROKE THE CHINESE BANK, 2023-2033

THE NEW BOOK "THE BUBBLE THAT BROKE THE BANK, EXPLORES THE REAL ESTATE CRASH IN CHINA. THE CHINESE REAL ESTATE HOUSING IS THE BUSINESS CYCLE AND THE CONSUMER CYCLE IS NOW BEING CRUSHED!

ON MAY 4, 2019 DONALD TRUMP ANNOUNCED 50% TARIFFS ON CHINESE GOODS. THE CHINESE ARE NOW IN THE PROCESS OF RESPONDING TO THE NEW TRADE WAR. 

   PRESIDENT BIDEN COLD WAR IS BASED ON CHANGING THE ECONOMIC AND MILITARY DYNAMICS OF THE CHINESE COMMUNIST PARTY. THE CHINESE COMMUNIST PARTY HAS FAILED IN GIVING  BIDEN A CHECKMATE. THE RISE OF TAIWANESE NATIONALISM IS THE BIG WINNER.

THE COMMUNIST CHINESE PARTY HAS NO CHOICE BUT TO RESIST THE RESTRUCTURING OF THE CHINESE INDUSTRIAL COMPLEX. THE CHINESE EXPORT MACHINE HAS COME TO A HALT AND A 5-YEAR DEPRESSION HAS BEGUN IN CHINA. CHINA CAN ONLY MOVE IN ONE DIRECTION: INTERNAL CONSUMPTION! THE 2020 PANDEMIC HAS REVEALED THE MASSIVE FAILURE IN CHINA.

THE ONLY MAJOR INVESTMENT FIRM TO DEAL WITH THIS CHANGE IS HONG KONG INVESTMENT FIRM PAG. THE HEROIC AND DYNAMIC LEADERSHIP OF WIJAN SHAN IS NOW MOVING INVESTMENT RESOURCES INTO DOMESTIC INVESTMENTS TO INCREASE INTERNAL CONSUMER MARKETS.

CHINESE COMMUNIST PARTY HAS SUCCESSFULLY DESTROYED THE COMMERCIAL AND INVESTMENT INFRASTRUCTURE IN HONG KONG. HONG KONG BECAME A MEDIOCRE AND POOR PROVINCE. THERE IS NO FUTURE IN HONG KONG.

THE NEW NORMAL FOR CHINA IS ECONOMIC DEPRESSION. THE DREAMS OF WORLD DOMINATION ARE NOW PUT ON HOLD. THE CURRENCY MANIPULATION WILL LEAD TO A CHAIN REACTION OF ECONOMIC RECESSION FOR EMERGING COUNTRIES. THE DECLINE IN VALUE OF THE YUAN DEPRECIATES THE GOODS AND SERVICES OF CHINA AND CREATES MASSIVE CAPITAL FLIGHT FROM CHINA.

THE CHINESE DEPRESSION HAS LANDED IN CHINA!

PROFESSOR LANG XIANPING OF THE CHINESE UNIVERSITY OF HONG KONG HAS  RELEASED A BOMBSHELL ABOUT THE CHINESE ECONOMY; THE CHINESE DOWNWAVE HAS ARRIVED! THE BLACK SWAN HAS ARRIVED IN CHINA!

WE ARE IN THE SECOND PART OF 12 YEAR PROGRAM OF DELEVERAGING CHINESE ASSETS. PROFESSOR XIANPING RESEARCH INTO THE CHINESE ECONOMIC MIRACLE IS NOW UNDER INVESTIGATION BY WORLD ECONOMISTS.

THE EARLY DEPRESSION INDICATORS WERE DISCOVERED BY JIM CHANOS OF THE KYNIKOS FUND IN 2009. CHANOS USED HIS RESEARCH TEAM TO DEVELOP AN EXTENSIVE  CHINESE PROPERTY DATABASE. THE PROPERTY AND CONSTRUCTION BOOM BEGAN IN CHINA IN 1998.

 CHANOS SAW INTERLOCKING CONNECTIONS  WITH UNDERDEVELOPED COUNTRIES SELLING MINING COMMODITIES AND THE CHINESE BUILDING AN INFRASTRUCTURE MIRACLE. EUROPEAN AND AMERICAN COMPANIES WERE USED TO BUILD INFRASTRUCTURE PROPERTIES.

 AMERICAN AND EUROPEAN STOCKS CAN EASILY BECOME STOCK SHORTS DURING THE EARLY STAGES OF ECONOMIC DEPRESSION. THE CHINESE HAVE CONTRIBUTED 1/3 OF THE WORLD GDP. THIS IS NOW GONE!

 CHANOS BEGAN TO ANALYZE THE ECONOMIC ANOMALIES THAT DID NOT MAKE ECONOMIC SENSE. CHANOS'S TEAM SAID THAT CHINA WAS ON A 'TREADMILL TO HELL" AND THE STOCK MARKET WAS LIKE " A PIG ON LSD".

HE FOUND THAT 60%  OF INVESTMENTS WERE IN FIXED ASSETS. THERE WERE TOO MANY GHOST HOMES AND PROPERTIES IN CHINA.

CHANOS'S TEAM PUT TOGETHER A CORRELATION BETWEEN BUBBLE INVESTMENTS IN REAL ESTATE AND COMMODITIES. CHANOS BEGAN HIS SHORT TRADING STRATEGIES BASED ON THE BUBBLE ECONOMY. HIS SHORT STRATEGY IS BASED ON SHORTING THE INPUTS TO COMMERCIAL PROPERTY.

 HE PREDICTED THE FIRST STAGES OF THE COMING DEPRESSION. HE REASONED THAT EVENTUALLY, THE CHINESE ECONOMIC MIRACLE WILL RUN INTO THE BRICK WALL OF THE CONSUMER CYCLE. 

THE BUSINESS CYCLE IS NOW SHOWING DEPRESSIONARY INDICATORS. THE BLACK SWAN INDEX AND CBOE SKEW INDEX BOTH SIGNAL AN UNPREDICTABLE EVENT CREATING THE TRIGGER EVENT.

 IN, 2009, CHARLENE CHU DISCOVERED THAT THE CHINESE BANKS WERE PART OF THE SHADOW BANKING SYSTEM. SHE FOUND THAT THE CHINESE BANKS EXTENDED $ 15 TRILLION TO THE CHINESE SHADOW BANKING SYSTEM. THE BANKS ARE FUNCTIONAL ZOMBIE BANKS WITH ZERO LIQUIDITY.

 THIS EXPLAINS THE LOW COST OF CHINESE BANKING STOCKS. THE CHINESE BANKS ARE IN A STATE OF COLLAPSE. THE CHINESE BANKS ARE STUCK IN A ILLIQUID MARKET. THE BANKS COULD FREEZE UP THE CHINESE ECONOMY FOR A SHORT PERIOD OF TIME.

DR. ANDY XIE, AN INDEPENDENT ECONOMIST HAS ARGUED THAT CHINA  IS A " GIGANTIC MONETARY BUBBLE THAT HAS CORRUPTED VIRTUALLY EVERY CORNER OF THE ECONOMY".  ANDY XIE ARGUED THAT IT IS LABOR COMPETITIVENESS NOT SPECULATIVE BUBBLES THAT CREATES ECONOMIC STABILITY. 

ANDY XIE WAS SHOCKED BY HOW THE GOVERNMENT HAS CREATED AN 'IRON TRIANGLE' OF GOVERNMENT OFFICIALS, BUSINESSMEN, AND SHADOW BANKING TO TRANSFER WEALTH FROM THE POOR TO THE RICH. THIS WAS EXPLORED IN THE BOOK THE RED ROULETTE. 

  

 THE DOWN WAVE FIRST WAVE STARTED IN JULY OF 2018. IT  WILL LAST THROUGH 2033. PRESIDENT TRUMP HAD TRIGGERED A TRADE WAR WITH CHINA. THIS WAR BEGAN THE DELEVERAGING OF THE CHINESE ECONOMY.  THE STOCK MARKET WILL TURN CHINESE STOCKS INTO AN AVALANCHE OF WORTHLESS CHINESE EQUITIES. 

CHINESE WILL BE OPERATING IN REVERSE TO THE ENTIRE WORLD ECONOMIC WORLD ORDER. THE MAJOR ECONOMIC BLOCKS WILL BEGIN A 20-YEAR PERIOD OF RE-INFLATING THEIR ECONOMIES. THE CHINESE WILL BE DEFLATING THEIR ECONOMIES FOR 20 YEARS. CHINESE ECONOMY IS CURRENTLY BASED ON THE SWISS CHEESE OF HYPERINFLATION AND DEFLATION.

 IT IS IMPOSSIBLE FOR THE CHINESE TO PROVIDE WORLD LEADERSHIP IN THIS TYPE OF ECONOMIC ENVIRONMENT. THE UNITED STATES WILL PROVIDE WORLD LEADERSHIP AND BECOME THE DOMINANT WORLD PLAYER. AMERICAN AND EUROPEAN ALLIANCES WILL BE HIGHLY SUCCESSFUL. THE NEW PROXY STATE OF UKRAINE WILL STOP PUTIN'S EMPIRE FANTASY.

 THE CHINESE LEADERSHIP WILL BE SHOCKED BY THIS ECONOMIC REALITY. ALL OF THE CHINESE INTERNATIONAL ALLIANCES WILL EXPERIENCE ECONOMIC DEPRESSION

 THE CHINESE ECONOMY WILL BE PUTTING ON FIRE SALES. THEIR GLOBAL ASSETS WILL BE SOLD VERY CHEAPLY AND ANTIQUES. CHINESE WILL HAVE LEARNED A PAINFUL ECONOMIC LESSON ABOUT DEFLATION.

 THE SECOND PHASE WILL BE FROM 2023 TO 2024 AND THE LAST PHASE WILL BE FROM 2026 TO 2033. IN 2016, $540 BILLION HAD LEFT THE CHINESE ECONOMY. THE DEPRECIATING YUAN WILL CREATE A FIXED CURRENCY RESERVE PARADOX.

THE FOREIGN CURRENCY RATE SHOULD BE $1.00= 15 YUAN. THE YUAN IS OVERVALUED AT THE CURRENT RATE.

 THIS WILL CREATE A DRAG ON THE WORLD ECONOMY DUE TO THE FACT THAT CHINA WILL HAVE A REAL GDP OF 4% FOR 12 YEARS!. SLOW GROWTH WILL IMPACT COMMODITIES AND INTERNATIONAL TRADE.

 THE CHINESE SATELLITE EMERGING NATIONS WILL BEGIN A LONG-TERM DELEVERAGING. 

PROFESSOR XIAN PING DEPRESSION RESEARCH DISMISSES THE CHINESE COMMUNIST PARTY IDEOLOGY WITH FACTS:

1. THE CHINESE ECONOMY IS IN DEBT OF $28  TRILLION DOLLARS. THE CHINESE HAVE $3.3 TRILLION IN RESERVES. IN 2016, THE CHINESE ARE LOSING $540 BILLION IN FLIGHT CAPITAL. THESE RATES HAVE DOUBLED IN 2023.

2. THE REAL INFLATION RATE IS 16.2% 

3. THE INVENTORY IS AT AN EXCESSIVE CAPACITY OF 50.77 %. ANOTHER INDICATOR IS THE CHINA COMPUTERIZED FREIGHT INDEX (CCFI) WHICH SHOWS A 25% DECLINE.

4. THE REAL GDP IS AT 2%.

5. THE CHINESE TAX RATES FOR INDIVIDUALS ARE AT 51.6% AND 70% FOR BUSINESSES.

6. THE CHINESE ECONOMY IS USING BUBBLE ASSETS FROM PROPERTY, CARS, LUXURY GOODS, ANTIQUES, AND ART FOR QUICK PROFIT. THE LIQUIDATION OF THESE ASSETS WILL BRING GREAT BARGAINS FOR AMERICANS.

7. CURRENTLY 70% OF CHINESE GDP IS BASED ON INFRASTRUCTURE CONSTRUCTION. THE SERVICE SECTION IS GROWING AT 13%  AND ADJUSTED FOR GOVERNMENT STATISTICAL DISTORTION SERVICE IS AT 5%. THE REAL ESTATE CRASH IS DRIVING THE CHINESE ECONOMY. 

8. THE STOCK MARKET COLLAPSE OF $ 10 TRILLION DOLLARS. 

9. THE CHINESE GAMBLING COMMUNITY IN MACAU WILL COLLAPSE WITH A 70% DOWNWARD PRESSURE ON GAMBLING STOCKS. THE AMERICAN GAMBLING CORPORATIONS HAVE TO BE WATCHED FOR FURTHER STOCK DECLINES.

10.  THE ECONOMIC INEQUALITY IN CHINESE SOCIETY. THE CHINESE HAVE

EXTENSIVE INCOME INEQUALITY RESULTED IN FLIGHT CAPITAL. THERE ARE 200 MIDDLE-CLASS CHINESE  WORTH $28.3 TRILLION DOLLARS OF CHINESE MONEY.

ACCORDING TO WANG XIANGWEI, 2013 WAS THE BEGINNING OF THE FINANCIAL REFORM CREATED BY THE COMMUNIST PARTY. THIS RESULTED IN THE ARREST OF WU XIAHUI AND XIAO JIANHUA. THIS HAS LED TO THE NEW PROPOSAL OF ALLOWING A $10,000 WITHDRAWAL FROM CHINESE BANKS.

MOREOVER, WANG XIANGWEI HAS DOCUMENTED THE RISE IN THE HIGH NUMBER OF SUICIDES AMONG CHINESE OFFICIALS. GENERAL YANG DEATH HAS SENT SHOCK WAVES THROUGHOUT THE COMMUNIST PARTY.

 THE CHINESE HAVE REACHED NEW LEVELS OF INCOME INEQUALITY. THE 2015 PER CAPITA INCOME IS ABOUT $14,000.00 PER PERSON.  THE CHINESE ECONOMY WILL REACH THE GINNI FACTOR OF 50%  BY 2020.

 THIS  WILL RESULT IN A LONG PERIOD OF DELEVERAGING OF ASSETS AND INCOME.

MANY UPPER-INCOME CHINESE HAVE DEVELOPED  A SERIES OF FLIGHT CAPITAL STRATEGIES TO ESCAPE THE COMING DEPRESSION IN CHINA. THEY HAVE DEVELOPED 20 WAYS OF GETTING CAPITAL OUT OF CHINA. THE COMING COLLAPSE OF THE YUAN IS NOW IN FREE FALL. THIS MAKES THE MONEY WORTHLESS FOR CHINESE INVESTORS. 

11. THE CHINESE SHADOW BANKING SYSTEM HAS CREATED A MASSIVE $ 30 TRILLION CREDIT BUBBLE USED TO FINANCE THE PROPERTY MARKETS. THE CREDIT BUBBLE IS NOW READY TO POP AND CREATE A PROPERTY DEPRESSION IN CHINA.

 THIS IS VERY SIMILAR TO THE 20008 AMERICAN SUBPRIME GRAVEYARD IN THE HOUSING MARKET. JIM CHANOS HAS EXTENSIVE DOCUMENTATION ON THE TRUST INSTRUMENTS USED TO FUEL THIS PROPERTY BUBBLE. 

CHANOS' ANALYSIS IS OUTSTANDING ON THE MISMATCH OF SHORT AND LONG-TERM CREDIT OBLIGATIONS. WHAT HAPPENS WHEN THE ROLLOVER COLLAPSES? THIS ISSUE WAS TAKEN UP IN THE FICTIONAL FILM ROLLOVER!

THE ONLY IMMEDIATE SOLUTION TO THE CHINESE MIXED MARKET ECONOMY IS TO DEVELOP INVESTMENT STRATEGIES FOR SLOW GROWTH AND DEFLATION EXPECTATIONS FOR CHINA. WHERE IS THE CHINESE SMART MONEY?

 THE CHINESE INVESTORS ARE NOW INVESTING IN UNSAFE BONDS, PROPERTY, AND ART. THE SHANGHAI CHOGYANG INVESTMENT COMPANY MUST DEAL WITH THE REAL ESTATE CRASH AND SHADOW BANKING INVESTMENT TRUSTS. THIS FUND MANAGES $3. 15 BILLION AND IS DEALING WITH CHINESE INVESTORS THAT HAVE INVESTED IN  PROPERTIES IN FIRST-TIER CHINESE CITY BONDS WHICH  ARE UNSAFE. 

 THE REAL QUESTION IS THAT THIS MAY BE A VERY DANGEROUS STRATEGY. THE QUESTION OF MASSIVE DEFAULT IN CHINESE BONDS IS OFF THE CHINESE INVESTOR RADAR.  THEY ARE INVESTING IN THE WRONG BONDS IN THE WRONG COUNTRY!

THE SHANGHAI YAOZHI ASSET MANAGEMENT IS USING THIS SAME FORMULA FOR MANY CHINESE INVESTORS.

 MANY CHINESE ARE TURNING TO VARIOUS LIFE INSURANCE AND ANNUITY PRODUCTS SOLD BY THE SHANGHAI LIFE INSURANCE. CURRENTLY, YIELDS ON 5-YEAR BONDS ARE ABOUT 4.53% AND ARE DOWN FROM THE HIGH OF  5.60% FOR BONDS.

  

CHINESE INVESTORS ARE GOING INTO THE SHENZHEN AREA ACROSS THE BORDER FROM HONG KONG TO INVEST IN PROPERTIES. MANY ARE USING SHANGHAI ZHIYUAN REAL ESTATE AGENCIES TO BUY INTERNATIONAL PROPERTIES FOR FUTURE INVESTMENTS. 

  SOTHEBY'S IS MARKETING ARTWORKS BUT THIS IS USUALLY AN INFLATION INDICATOR AND MAY BE A BAD INVESTMENT FOR CHINESE INVESTORS. THEY ARE CURRENTLY IN THE ART AND ANTIQUE BUBBLE IN CHINA. 

THE CCP HAS CREATED A NEW POLITICIZED ECONOMIC AGENDA:

1. NO FOREIGNERS

2. NO TECHNOLOGY-SHARING

3. NO PRIVATE CAPITALISM

4. NO LAYING DOWN

5. NO RUNOLOLGY