It’s so obvious, at least to me, that China is on the skids economically, and this is brought out by the current edition of “The Epoch Times,” which is an excellent weekly paper. As I have said in past columns, I believe China will go the way the Soviet Union did. Every one thought the Soviets were so strong, were going to take over the world, and having a good go at it, when suddenly, with no warning, they were gone, 19 years ago. Utterly bankrupt. They had no concept of basic economics; kept spending without limit, with un-backed paper money, till finally the interest was more than the income, and that was it.
The current Epoch Times has a full page spread on rickety China, with the bold 64 point headline reading, “CHINESE ECONOMY TEETERING ON THE BRINK OF COLLAPSE.” The following are direct quotes from the article, which has to be several thousand words in length, but a few quotes will enlighten skeptics, many of whom think China is wealthy and cannot fail.. “According to Chinese media reports, about 69% of outstanding loans to China’s private enterprises defaulted in the first three quarters of 2020. For example, Brilliance Auto Group failed to repay 1 billion yuan to its bond holders in October. The Liaoning state-owned enterprise, Shenyang Shengjing Energy was also in debt default. Henan state-owned Yongcheng Coal and Power Company defaulted on a 1 billion yuan bond. Furthermore, Ziguang Group, China’s largest semiconductor group and the third largest holder of Semiconductor Manufacturing International Corporation, China’s leading chip maker, is also on the verge of default.
“China’s debt market confidence, has been overshadowed by various types of default, and the panic has been spreading. A clifflike decline in financing has led to a break in the chain of subsequent refinancing funds that might trigger a systematic financial failure. Beginning in 2019, China’s (communist) elite, began going after big money and exercising control over private capital. The Chinese Communist Party (CCP), has tightened control over large private companies such as Alibaba, Tencent, and JD.com that have a broad and powerful influence in the country. The CCP intends to significantly reduce the financing channels for private enterprises to issue bonds, to ensure that the public can only choose bonds issued by the CCP’s state-owned enterprises. After the CCP implemented the National Security law in Hong Kong, and openly violated the city’s “One country two systems,” law, it will only cause foreign investors to further lose confidence in investing in the city. On November 12, Donald Trump issued an executive order, prohibiting U.S. companies and individuals from investing in 31 Chinese enterprises owned or controlled by the Chinese military, on the grounds of national security.”
To me, China’s economy today, is similar to giving an unlimited credit card to a stupid person, and telling him or her there’s no limit. China has spent trillions of yuan in Greece, Spain, Germany, and Africa, among other places, wooing the governments and waving their credit card at them. It happened here three times already, but we weren’t a communist nation, which is the equivalent of having an IQ of 85 probably. U.S. money became worthless about the time we won the Revolution against Britain, with help from the French, and in the War between the States, both the North and South’s money went to zero. The current U.S. dollar, ‘backed by the full faith and credit of the U.S. government’ has lost over 95% of its value and purchasing power in as many years, and the buck’s final resting place will maybe be in Arlington Cemetery, which was originally Robert E. Lee’s home, as a final insult to that monumental man. What a disgrace. The CCP, showing its utter lack of any even basic understanding of economics, has shoved aside private enterprise and shoveled virtually worthless yuan into state owned businesses which are run by useless bureaucrats, and lose trillions of yuan each year. Foolish spending on military and every other conceivable thing, will eventually finish China’s un-backed paper money. At least Our government and military don’t own businesses, which no government or military should. The Swamp is doing its very best to destroy our freedoms and economic health under Trump, but I am certain that if Biden actually becomes president, he will finish it. Store wealth in gold and silver, and buy nothing made in China, or Vietnam, which is also communist. I strongly feel that no communist nation is capable of ever becoming economically stable, and will fail far faster than a nation which at least semblance of freedom left, as does ours.
P.S. I AM NO REAL ESTATE AGENT, BUT I DO HAVE A WONDERFUL CLIENT, WHO IS DIABETIC AND LOSING HIS SIGHT. Bill has 38 acres he would like to dispose of and he has not listed it. From his description, it might be a good buy if you ever wanted to build a Colorado vacation cabin or own a secure piece of land. He’d like to get $80,000 for it. My toll free number is still hooked up. 1-888-786-8822. If you might be interested, call me, and I’ll give you his phone number and you can talk about it. I love this guy. He lost his wife a few years ago, and lives by himself in the house he has owned for many decades.
– Don Stott
-don@coloradogold.com