What’s up, everyone! Today I will explain China’s debt crisis.
In the last few weeks, China’s government has
- been seizing bank accounts
- looked to invade Taiwan
- defaulted Evergrande (over $200 billion)
In 2013, China started the Belt & Road initiative. This meant China lent money to other developing countries for infrastructure and business development.
They lent a total of $932 billion!
China lent this money to numerous countries (not all these countries are credit worthy, yikes).
China is lending this money so that when those countries can’t pay their debts, China gets to take all their assets. This is called imperial lending.
With rising interest rates around the world and a global recession, these countries have stopped paying back China.
Additionally, 65% of the money that China is currently borrowing is being used to re-payback interest on old loans!
So, What’s my Point?
- unpaid loans
- Evergrande meltdown
- drastically aging population
All these factors were recently topped off when…
China notified all their deposit holders that their checking/savings accounts were changed to investment accounts, and that the money was either illiquid or had gone to zero!
China then put tanks in front of their banks for protection against protests!
As a Result…
China has further threatened to invade Taiwan.
Like I said in my video, a Wall Street Journalist put it this way…
“Often times a giant that’s being pulled out of the spotlight will sometimes lunge for glory to try and save and preserve its spot in the world economic game.”
Because of China’s debt crisis, I believe we are months or even weeks away from the Chinese bubble popping.
Comment on my video to let me know what you guys think!
That’s it for today!
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DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.