gold news

 and so that is the process that they used to sort of cheat the world system but this is also the reason that over this time period where China was manipulating back in the 80s and 90s this is where all of the manufacturing left the United States and went over to China they bought all of those jobs by manipulating the global economy could those be storm clouds brewing for the global economy well you know over the past couple of weeks it seems like it's all coming down to China but to get a really good perspective of what's

going on let's take a look at the past couple of weeks of the incoming news so this was back in August 14th these are not in exact chronological order but the hits keep coming and we're not talking about like the greatest hits here these hits are like blows in a boxing boxing match for China's economy its July report card missed expectations and it altogether emitted youth unemployment stats from the announcement so what do you do in China if you've got bad news you just pretend it doesn't exist at the

same time Biden issues an executive order restricting U.S investment in Chinese Tech so uh just when they need a whole bunch more foreign cash flooding in to help bolster the economy a little bit of that has been cut off not a lot U.S stocks slide amid banking fears weak China data moving on China slides into deflation as consumer Factory prices drop so consumer prices and Factory prices then this one's good China sneezes but will the rest of the world catch a cold now the reason it's good is they've got

some great data here here is China's dashboard of disappointment the reason this is great at least as far as I'm concerned is this gives you a broader perspective this goes back to the beginning of this century and so what we have here is year over year growth if the line is at zero it means it you know it may have gone up 10 percent last year and then it didn't go up at all this year so when it falls it's not necessarily really bad news it's only if it falls a lot or if it falls below the

zero line that means you've actually got contraction so the industrial production has been the amount of increase year over year has been falling to some reasonable rates actually 3 0.5 well you know a six percent growth that was great for China then because they are one of the uh worlds they're they're an engine for the world a big driver retail sales they've fallen down to zero growth this is really bad news property investment real estate uh and real estate development uh and investment accounts

for about a third of their GDP it's it's just a huge proportion and it has gone negative so we're looking at um eight point well you know it looks like it's a almost yeah eight point four percent contraction now at 7.7 uh fixed asset Investments also falling uh there was one okay and here are some of the rate Cuts uh that are going on uh this is the rate cuts for covid so the the covid crash and then they did some more rate cuts and more rate Cuts in 22 but now they're doing rate Cuts again

uh moving on China asks some funds to avoid net Equity sales as markets sink so they're asking uh mutual funds not to sell so that the market won't tank uh and then China Shadow Bank misses dozens of payments sparking protests so you know uh you've you've got deposits at a investment in a shadow bank and they're supposed to be paying you every month interest or a dividend or something like that and they miss month after month after month and you get mad and all your neighbors get mad so you arrange a

protest but then the police show up at your door and have a little visit with you and say you know well your protest may have some negative consequences and so you decide not to do it so they actually are visiting investors at home to stop these protests China's housing slump is much worse than official data shows uh Country Garden this is one of the biggest developers in China is in danger of default rivaling ever Grand ever Grand uh well let's just move on because I think ever Grand is next China

ever Grant the world's most heavily in indebted property developer just filed for chapter 15 bankruptcy project protection what is chapter 15 chapter 15 is actually a U.S bankruptcy protection that is uh for uh foreign companies that uh owe U.S denominated assets you know that that owe a debt to U.S debt holders and so there's about I think it's 19 billion that they owe uh in U.S denominated debt here so they've filed in the U.S they actually uh defaulted in 2021. uh Global Investors dumped Chinese Securities as

state supports as state support hopes fade so this asking the mutual funds not to sell well maybe that didn't work out so well uh China urged BuyBacks at starboard companies as markets tumbled okay starboard China's starboard are the 30 largest firms on the Shanghai exchange and so they're asking those companies to do stock BuyBacks so as people sell that stock goes somewhere back you know goes back into the company and the price of the stock doesn't drop well that can be a good uh strategy if

it works but if they buy it back and the stock tanks anyway which it probably will it's a bad strategy so is it working well I don't know let's take a look this is the long you know when I opened this chart I think it was set to one month and you go oh my God this looks like it's falling off a cliff but then you know you take a look at the big picture this goes all the way back to December 1980 and so we're looking at the entire bull market here of the Shanghai exchange as far as we've got

data going back and it looks like a really good Trend I mean if you look at the lows you can almost draw a line underneath them and this latest pullback does not look that bad but take a look at this if you're a technical Trader you've got shoulder here then you've got a head and then you've got another shoulder developing and all that has to do is go down and break the neckline you draw a line between these two lows and it's predicting if you flip the head upside down it's predicting a move down

and somewhere in this area of support so but Shanghai stock exchange isn't the only Stock Exchange here's Hong Kong and this looks a lot worse Hong Kong put in its peak back in January 2018 was the peak for Hong Kong and it has been pulling back over the last five years here it's it's not looking very good China's surprise move on loan rates shows banks are under pressure China growth hopes fade after modest rate Cuts so the rate cut turned out to be not enough to impress the public in

China China's Central Bank steps up in defense of their in mimby so now we're talking about a currency crisis an exchange rate crisis so they're going to defend the renminby renminby is their currency like saying U.S dollars when you hear the term you won that's like saying cash or bucks it's slang for REM membi so China targets Yuan bears with most forceful fixing guidance and so let's see how that's working out well here's the long-term chart and it really you know

looks they're trying to stop a devaluation I guess in the Chinese currency when this goes up it means the Chinese currency this is how many Chinese Yuan you receive for 1.1 US dollar and it used to be you have to look up here this is the uh the the way this chart work it works anywhere I put my cursor on it it's giving you a readout and that readout isn't the exact uh exchange rate for that date this is so we go back to the beginning of this chart and you see that it was at 1.59 so let's just say 1.6 you won for a dollar

and then as you can see we have a perfectly free marketing here uh this is what a free market looks like you know uh and and it went all they devalued their currency through Market interventions uh and made it fall to the point where one dollar would buy you about 1.7 Yuan so I'm going to take a little detour here to a really old presentation that I've been giving since somewhere between 2010 and 2013 was the first time I uh presented this uh particular presentation on how uh one country can sterilize currency inflows

and the reasons why so there's China there's the U.S and we're going to explore the trade between them so here is a retailer in the United States that uh wants to sell something to a U.S consumer and they sell that that iPhone to the US consumer and now Walmart has dollars but they've got a shortage of iPhones so they call up the factory in China and they say hey we need some more iPhones the factory produces another iPhone and they pay for those the iPhone with US Dollars this creates a little

bit of a problem for China and here is why in order to pay all of their employees and get those dollars out into circulation in China what they are that that business is supposed to do the bank is supposed to put those dollars onto the foreign currency exchange the Forex and buy you one and that way this business can pay the workers in China and those Yuan are in circulation however I if they do that there is a glut of dollars on the Forex and a shortage of Yuan and supply and demand sort of rules

everything so if you've got too many dollars the value of the dollar goes down the value of the one Rises and what happens is trade goes back into a natural equilibrium that it is supposed to be at but China doesn't want that they want their population put to work that was the big problem in China after coming out of the I believe Mao died in 76 and so after coming out of Communism the thing was to get the Chinese population put to work to make them happy that's how you stay in office

without an overthrow is uh to keep the population happy and fed but China doesn't want this uh trade to go back into balance they need a cheap U1 so that their exports to the us so that their goods in the U.S are really cheap and so that their imports from the U.S are expensive so that it's Chinese work workers that are put back to work not the U.S workers so this is how the U.S lost a lot of its manufacturing base instead of doing this trade on the Forex what China would do is the People's Bank

of China steps in People's Bank of China takes those dollars from that local business and the way they do it is they print you on and they buy them from the local business so those brand new you want go into the banks but then uh the uh us comes up with a bond and instead of putting these dollars on the Forex The People's Bank of China sells those dollars to the U.S treasury the U.S treasury spends them into circulation and now those dollars that left the U.S a little while ago on this trip come

right back into the U.S not causing inflation because they're gone for a little while then they're back then they're gone again uh however in China they're printing brand new currency to replace the uh dollars that they did not put on the Forex so there's this buildup of bonds at the uh people the foreign currency Reserves at the People's Bank of China and the build up of yuan in the uh out in circulation in this process repeats and repeats and repeats and uh the growth of uh of both currencies happens

but it happens with bonds and you want in circulation mostly and so that is the process that they used to sort of cheat the world system but this is also the reason that over this time period where China was uh manipulating back in the 80s and 90s this is where all of the manufacturing left the United States and went over to China they bought all of those jobs by manipulating the global economy uh so let's move on from this I don't even uh I think yeah there we are uh this is their total currency reserves uh

excluding gold and you see that it topped at about four trillion dollars and the vast majority of this they don't want to buy any more U.S treasuries and so this is a flatlined now but all of this was all manipulation of the global economy so with China's here's Zero Hedge with China's economy on the verge of collapse the pboc a pboc central Banker that's People's Bank of China central Banker calls for helicopter currency he doesn't know the difference between currency CN money but he's

calling for them to print currency uh you you know if if money has to be a store of value that means you can't just make it up out of nowhere suddenly uh and it shouldn't vanish suddenly uh anyway and that's one of the three PRI Aristotle defined this that the three primary functions of money are that it must be a medium of exchange a unit of account and a store of value and any thinking Economist any legitimate Economist has backed him up on that store of value ever since Aristotle

first said it but I want to show you something down here because it's interesting um hence uh the only thing that could truly shock and awe markets would be outright helicopter drops of currency direct to households and businesses in order to stimulate Dead on Arrival Chinese consumption because all their consumption you saw the retail year over year growth in the earlier article impossible to say impossible you say after all China has nearly 300 percent debt to GDP and only the terminal economic basket case that is Japan is

higher this is a Bloomberg article this is a Bloomberg writer and he's wrong and you see here that uh when you add up household debt non-financial corporates now why is it non-financial corporations because Financial corporations like Banks debt is an asset not a liability that's you know they own mortgages they own U.S treasuries and that's their asset if a non-financial issues corporate bonds that's owed back uh here's the government debt so the green is the sovereign debt that is owed by

China's citizens the yellow is corporates the blue is households now I want to show you a page of this is a chart from page 88 of chapter I believe this is chapter six of the great gold and silver Rush of the 21st century the data here comes from JP Morgan and iif I can't remember what that is right now but here is Japan at uh six years when you add so that writer just compare third total debt to sovereign debt of other countries so yes Japan is only has higher debt than the total debt of China

as sovereign debt but they're actually all of these countries you know there's six years of GDP that that uh that the chip that Japanese and Hong Kong owe somebody uh and then Singapore Canada Great Britain Sweden Euro area Norway USA and South Korea are all ahead of China but yes China has more than 300 percent total debt to GDP not sovereign debt so that writer from Bloomberg needs to brush up on some economics Reddit cold why Xi Jinping is letting China's economy flail and this article is great

not because of the article but because of some of the pictures it has in it back in 2013 I went to China to film for an episode of hidden secrets of money that that never aired we never finished putting it together but we visited the ghost cities in China now the ghost cities that I visited back in 2013 have been filled but they they looked like this back then you know there was areas that were deserted these have been deserted longer and these are going to fail this time because China is going

into economic contraction but they build an entire city of empty places and they uh they pre-sell all of these apartments and this is the reason that it's such a huge percentage of GDP in China the real estate sector is because instead of investing in the stock market most people will own two three four five ten twenty apartments and yeah some of those are rented out but these developers like evergrand come up with a rendering and a model and they have a big sale of these apartments that are

going to exist someday and believe it or not there's one of these right down the street here in Puerto Rico I'm getting emails from a realtor I dealt with in the past and they're selling a building and when I walk past that address it's an empty lot with a sign says that there's a building coming but it looks real you go to the the Realtors website and there are photos and you can fly a drone up in the air and you can take a view of a picture of the view that that apartment is going to

have you put in an apartment that's completely furnished and everything and it looks like you're buying something that already exists when it's Pure Vapor uh so this is from that article uh the same so these two um all of these weeds and everything this is abandoned all of these buildings are empty uh and we visited places like this like I said take a look at this one uh the legend of sea project in Ningbo Ningbo uh this is country garden and Country Garden is like the one that has missed payments and they are the one

that is next on The Chopping Block as far as danger of default uh their the danger of bankruptcy and so Chinese experts suffer the worst fall since the start of the pandemic and according to Bloomberg a hard Landing is here for trade roiling World Export Champs okay so this chart black is 2022 blue is the first half of 2023 annualized so you can see that Mexico has gained in exports Canada lost a little bit but China is down 25 year over year that is something pretty horrific and if you go to page 82 of the great gold and

silver Rush of the 21st century I explain how uh trade recessions these you can see there's these periods of time where around the world a whole bunch of diverse economies sort of have semi-synchronous recessions and what's Happening Here is these were used to be transmitted by trade the U.S would have a recession and then somewhere between six months to three years later a bunch of the U.S trading partners would then have a recession why because the U.S isn't buying as much from them during

our recession and then we recover and start buying more and they recover and that is what's there's the Reagan double dip recession it was called and how it transmitted and if you look at this it happened before all of these reset sessions and then it causes the the slowing of our buying their goods causes their economy to slow down but then with the global financial crisis in 2008 it became a super synchronous event why because it's transmitted around the world through all of these derivatives

and then with covet it became a hypersynchronous event the next one it doesn't matter where it starts if it's a big country like China or if it's uh you know the next recession when the next Crisis starts it's going to spread and it will be Global and you need to prepare yourself now I want to thank you for watching and you know you're going to see an update on this in the coming weeks and showing how exchange rates and crises and uh and Import and Export causes one Society to be in the

spotlight for a decade or to and then that Spotlight moves on to the next one so I want to thank you for watching we'll see you next time