China will be the first domino to fall in the global economic collapse

China's economic collapse seems imminent, according to experts, sounds good for us, right? Not so fast -- our greatest economic rival might take us down with them.

I like to think I have the greatest analogy for huge economies collapsing. Think of it like people doing cannonballs into a pool. If a little kid named Afghanistan takes the plunge, big deal, no one's gonna feel that. However, if a morbidly obese individual named China does a cannonball, it might not drown everyone but it'll definitely ruin their day.

I suppose I should've been more conventional with a domino analogy, especially since that was in the title of this article, but I digress.

So, what am I referring to? Well, there are several points to address with China's economic woes.

China’s second largest property developer, Evergrande, is $300 billion in the hole — that we currently know of.

Evergrande, as previously stated, is China’s second largest property developer. They are already deemed to be in default on $22.7 billion in foreign loans and private bonds, and this is just a tiny fraction of their total liability still said to be in excess of $300 billion. Also as previously implied, that number could be way higher now, but China isn’t known for their transparency on anything negative coming from their country. Example: Covid. But seriously, can you believe these boneheads have also just raised the debt ceiling on developers like Evergrande? So yeah, $300 billion is likely chump change compared to the real figure.

5 banks in China have went bankrupt, and this alone threatens to take down their entire banking system with rolling bank runs resulting in widespread insolvency.

China tends to use a lot of flowery language to describe their dilemmas, gaslighting through omission and rhetoric, and often the American media does the job for them. I won’t beat around the bush - they went bankrupt. Freezing deposits means they’ve already burned through that money, and they’ve used tanks to prevent bank runs. And since I’m not on the Chinese payroll like other journalists, I don’t intend to lie for them to soften the blow. You need only take a look at our past right here in the U.S. to see what happens when a few banks go kaput — it tends to cause a chain reaction, like during the panic of 1907. China has since agreed to repay some of the money owed to people who lost their life savings in this criminal scheme, but the payments are often only a small fraction of what those people lost.

Construction on new property developments has halted.

Lending further pain to the real estate industry in China, they’ve halted untold billions in new construction. According to Bloomberg's Kristy Hung, Construction halts could affect 4.7 trillion yuan ($695 billion) worth of homes in China, and as much as 1.4 trillion yuan ($192.2 billion), representing 1.3% of China's GDP, would be needed to finish all these unfinished real estate projects.

34.5% of all property development income came from presold properties that don’t exist yet.

Chinese property developers delved too greedily and too deep, creating a market for the presale of houses not even built yet so massive that 34.5% of all their income came from presales. Income that was then used to self-perpetuate their presale business model by selling more homes that don’t exist yet with said income. Can you say ponzi scheme? Chinese homebuyers could learn a lot from early access video games — once developers have your money, they don't feel a lot of incentive to finish the product you paid for since the money's already in the bank for an unfinished product. This practice boggles the mind, but people in China believed so strongly in their real estate market that they opted to roll the dice for the promise of future profits by assuming the risk on themselves for a house that the developer has not even built yet, contrary to the traditional model of actually building the houses and selling them once they’re completely finished in order to deliver an actual product for the money paid for said product. Crazy, I know.

Chinese homebuyers who were slighted by these criminal practices from property developers are now refusing to pay their mortgages.

It turns out, people don’t like it when they pay for something and don’t get what they paid for, so now Chinese homebuyers are withholding payments until their homes are built. I’m no economist, but I can see how this would be utterly devastating for China’s banks and property developers alike. Banks won’t offer mortgages if they’re not certain said mortgages will be paid, and very, very few homebuyers are going to be able to pony up 100% of the asking price on a home. This is how real estate markets die, right here. In fact, this is how economies die. Remember that whole ‘insolvent banks’ thing? Yeah, this will only exacerbate that. And this is no longer isolated to just the first 900 petitions on social media, the mortgage boycott has expanded to include 301 projects in 91 cities.

China is actively doing all they can to suppress social unrest, and they’re being extra shady about it.

This one isn’t so much numerical as it is indicative of a tyrannical regime trying to keep the ride going just a little bit longer. China’s social credit score nonsense is well-known by now, but did you know their Covid-19 protocols require verification of health codes to travel and be in public? They used this against someone to stop their protest of the banks holding onto deposits they’d frozen and refusing to allow withdrawals, as mentioned previously. That’s not dystopian at all. We all remember how roaring the economy of Oceania was in 1984, don’t we?

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So how will this affect us? Well, for starters, despite us hating each other, we also depend heavily on each other for trade. In 2021, we imported $504.9 billion in goods from China. Economic woes will reduce output on China’s end, leaving us bereft of products we rely on receiving from them. That will cause prices to go up, and it’s a two-way street because we export all sorts of products to China as well, $151.4 billion in goods in 2021, to be exact. That’s also a trade deficit of $353.5 billion — which will only make things harder for the working class, as trade deficits tend to contribute to wage stagnation. This will work in concert with soaring demand and faltering supply, and demand-pull inflation will only grow. All of this will worsen our already rampant inflation rates despite Creepy Joe Biden’s insistence to the contrary.

And do you remember those foreign bonds I talked about companies like Evergrande owing on? Guess who owns them? That’s right. China and the U.S. are intertwined with each other more tightly than Pepe LePew on that black female cat that kept getting paint on her tail. Economically, at least.

I am of the opinion, though, that those bonds are the least of China’s concerns, as they have many debts they can call in to help pay down their own. It doesn’t make them look good in the eyes of foreign ratings institutions but if push comes to shove, China has a lot of countries that owe them a debt, as well. Via their “ball-and-chain” initiative — I mean “belt-and-road initiative” — they’ve forced many countries who are desperate for lucrative trade deals to help pull themselves up by the bootstraps. According to the World Bank, China is owed 37% of all debt payments in 2022 from poor countries, amounting to $13.1 billion. In a crisis, those will be the first debts called in and those nations will suffer massively as a result.

The shadiest part of China’s foreign lending practices is how they intentionally hide key details of the deals behind non-disclosure agreements with the nations they make these deals with, so information on these loans isn’t readily available. They could be demanding repayment in child organs at black market rates, for all we know. But on a more serious note, this means that, should a global crisis hit as a result of their fall, it’s going to leave many fires burning that can’t be immediately put out because they’ve made it harder to do so intentionally.

And it isn’t just poor nations that China is holding a debt over. Us here in the U.S. owe them massively, as well. As of October 2021, China owns 3.68%, or $1.065 trillion, of our national debt that they have acquired by buying U.S. Treasury bonds, once again acting in place of a banking institution to indebt other countries to them. The setup with all this is clear — China is holding a gun to our heads and saying that we will all go down with them unless we continue to turn a blind eye to their reckless fiscal policies, among other crimes, in order to allow them to maintain their ascent via infinite economic growth to eventually enslave us all, even as they make moves meant to run counter to our own in this time of economic difficulty.

On August 15th, China shocked the world by cutting key interest rates and even withdrawing cash from their banking system — a baffling move considering they basically stole money from their citizens and have only agreed to repay a tiny portion of it, already. This move was done to jumpstart credit demands seeing as people are slightly wary now after the property crisis I mentioned previously. Carrot-on-a-stick tactics to try and keep the crazy ride going a little longer. Anything to get people back to dealing with the banks that just stole from them. This is China basically being the remorseful husband after beating his wife again, trying to regain her trust until his next fit of rage.

This is a quagmire of massive proportions, and China won’t suffer alone — we’ll all be going through the bumpy ride right along with them, just like the whole world felt the sting in 2008 from our greedy banks here at home.

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