The Chinese people have very few places to invest their savings. As you can see below, real estate has been the favorite hidey-hole for stuffing the mattress. But it has long been an open secret that Chinese real estate is nothing but an ever-expanding Ponzi scheme. Such schemes tend to work well, right up to the point where they collapse into dust.
But China-wide, property sales are down 36% as of September. New capital is the only thing that keeps this turkey in the air. When the people start suspecting that the air is leaking out of the bubble, it will be a rush for the door.
China economic expert Michael Pettis sheds a great deal of light on China’s plight. It’s just getting started.
It was said to be “too big to fail.” We were told by David Goldman last month that the crisis was over! But now we are learning that Evergrande is currently scalping bond-holders to the tune of hundreds of $millions, and it is just getting started defaulting — The contagion is spreading to other Chinese developers, banks, and beyond. Listen for the falling sound of dominoes.
Under Xi, China is a living hell. The western sellouts who cheerlead for China remind me of the type of media sluts and others who touted the USSR right up until its collapse.
China depends upon a facade of viability. When that facade wears away, the dragon will lose its crucial overseas enablers. Perhaps, China will then take a good hard look at itself.
While Huawei is touted by CPC cheerleaders and skirt-clingers as an original Chinese product, real people understand that such is far from the case. Huawei is built upon stolen technology, and will continue to be. The minute Huawei (and China) stops stealing is the minute the whole pyramid scheme falls down.