The Big Picture - China 1Two videos that show the Incredible state of Chinese Real Estate. It appears that much of the Chinese economy has been built upon a Real Estate Ponzi Scheme, creating astronomical Real Estate prices, and construction quality so shoddy that the buildings start to fall apart immediately. And, even more astounding, a huge percentage of these newly constructed buildings are unoccupied, including ‘ghost cities’, newly developed cities with virtually no one living there.
Jim Grant - an interview with one of Wall Street’s legends. He’s talking about the US Economy, gold, of which he is a big investor in and thinks is a key holding, now, and Evergrande and China.
https://thesoundingline.com/jim-grant-evergrande-is-a-systemic-risk-but-inflation-is-biggest-risk/
————————-
Another Video is from these two young expats who lived in China for a long time, and created videos from there. Both are married to Chinese women, and have a long history of living in China. The guy with the short hair is from South Africa. He no longer lives in China, but, he is now ‘hunted’ by the Chicoms (they try to find out where he lives), because his videos embarrass the Chicoms. This particular video shows the appalling shoddy quality of Chinese modern construction.
https://www.youtube.com/watch?v=lKbLB_T-IjY
What does this have to do with NFG?
I think it is becoming obvious that China’s economy, a centrally controlled communist system which allowed private enterprise, but corralled it into directions the Chinese Communist Party demanded, had massive misdirection of resources, compared to real economies where the market determines the use of resources.
With China’s MASSIVE real estate bubble now coming undone, how does this effect China, and the world wide economy?
It looks as though the Chinese economy is unraveling, as President Xi creates his own ‘Little Red Book’ that chairman Mao imposed upon China, with XI, trying to recreate Chinese society. Xi starts to TRY to deflate the Real estate Mega Bubble WITHOUT deflating the Chinese economy (probably an impossible task, given the huge percentage of the economy that real estate comprises of the Chinese economy, coupled with the unbelievable valuations of Real Estate, shoddy quality of this real estate, and the vast amounts of unoccupied properties).
I don’t know the answer, but the unraveling of the Chinese economy is going to be a big part of the total puzzle of what the years ahead will involve. The real estate debacle in China is just part of their problems. And, they are dead set on taking over Taiwan, and, thus, you can’t rule out more tensions from China arising from the Communist Chinese threats toward Taiwan, including the possibility of an actual invasion of Taiwan. This may be the distraction the CCP (Communist Chinese Party) may need to distract from a disastrous economy, and demolished real estate sector, which is many times the percentage of the Chinese economy compared to Western nations, and many times the valuations which exist in the Western nations, along with terrble quality of these properties, such that many will likely need to be bull dozed.