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The Evergrande (“EverSCAMMED”) fiasco is nothing more than a classic Bernie Madoff Ponzi scheme involving property developers and greed-driven investors who chased high returns while forgetting about the existence of risk. (Every generation, it seems, must learn this painful lesson the hard way…)
Like all successful Ponzi schemes, Evergrande’s rise to become a global Fortune 500 business hinged on it finding a steady supply of new suckers to hand over their money as “investments” in the Evergrande scheme.
Buoyed by a flood of incoming investment money, Evergrande churned out entire “ghost cities” of apartment buildings across China, selling the ludicrous idea that these apartments would serve as retirement assets for the millions of Chinese citizens who “invested” in their construction. As long as the buildings kept going up — and the bond payments were made on time — everybody convinced themselves they were getting rich.
Madoff isn’t merely rolling in his grave… he’s laughing.
Because it’s the same Madoff scandal, all over again, but at a significantly larger scale. The Evergrande Ponzi scheme involves at least $300 billion dollars in direct debt, rippling into potentially trillions of dollars in total exposure around the world (among banks and institutional investors) due to leveraged investment instruments and the ripple effect of non-payment (i.e. default).
The collapse has only just begun… and China’s FAKE economy is in real trouble
Ponzi schemes collapse when people demand to get paid back for their “investments” but the schemers can’t ensnare enough new investors to fund the previous ones who want out. As Bloomberg reports (see chart below), Evergrande owes $669 million in interest debt payments over the next 3 months.
According to recent news out of China, it looks like the government there is going to help cover Evergrande’s debt payments to local bond holders (i.e. institutions in China) while stiffing foreign bond holders.
This is a surefire recipe for causing the financial default to spread internationally:
One look at the debt obligations chart above should lead to the instant realization that Evergrande is going to default… and foreign debt holders are going to be left high and dry. Even if the Chinese government covers all the individual local investors and their WMPs (Wealth Management Product investments), it’s clear that hundreds of billions of dollars in foreign-held debt is going to be written off at some point (probably soon).
Even worse, Evergrande is just the tip of the iceberg.
“The whole Chinese property market is on stilts,” investment expert Jim Chanos told the Financial Times. “…[A]ll the developers look like this. There’s lots of Evergrandes out there in China — Evergrande just happens to be one of the biggest.”
That means U.S. banks and institutions that invested in Evergrande are going to suffer catastrophic losses. Hence the ripple effect begins, and the non-China investors who had exposure to all this suddenly find themselves unable to make their own debt obligation payments for their own leveraged borrowing.
Why would we not be surprised to discover that banks and institutions around the world borrowed cheap money to invest in Evergrande where they could bank on far higher returns? (Where do you really think all the Fed money printing money goes, anyway? A significant portion is invested by banks in higher interest rate projects around the world, like Evergrande.)
The bottom line result is that Evergrande’s collapse will almost certainly set off fiscal contagion. The debt implosion will likely spread, and if regulators aren’t able to expertly navigate the magnitude of this collapse, it may turn into an avalanche of failed institutions and banks around the world in 2022.
This won’t be instantaneous, of course. Even an avalanche take time to gather speed and momentum. The first big collapse has been ignited and has begun to spread, but much like a tsunami, it travels mostly unseen until it reaches foreign shores, at which time the oceans rise up and dump their catastrophic results in anything that stands in the way.
Today’s Situation Update podcast explains more of what’s happening with Evergrande and the risk of contagion that may, over time, cause catastrophic losses among global investment institutions and banks:
Brad Harris from Full Spectrum Survival has also offered this warning about what happens next with the Evergrande collapse:
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Mike Adams serves as the founding editor of NaturalNews.com and the lab science director of an internationally accredited (ISO 17025) analytical laboratory known as CWC Labs. There, he was awarded a Certificate of Excellence for achieving extremely high accuracy in the analysis of toxic elements in unknown water samples using ICP-MS instrumentation. Adams is also highly proficient in running liquid chromatography, ion chromatography and mass spectrometry time-of-flight analytical instrumentation. He has also achieved numerous laboratory breakthroughs in the programming of automated liquid handling robots for sample preparation and external standards prep.
The U.S. patent office has awarded Mike Adams patent NO. US 9526751 B2 for the invention of “Cesium Eliminator,” a lifesaving invention that removes up to 95% of radioactive cesium from the human digestive tract. Adams has pledged to donate full patent licensing rights to any state or national government that needs to manufacture the product to save human lives in the aftermath of a nuclear accident, disaster, act of war or act of terrorism. He has also stockpiled 10,000 kg of raw material to manufacture Cesium Eliminator in a Texas warehouse, and plans to donate the finished product to help save lives in Texas when the next nuclear event occurs. No independent scientist in the world has done more research on the removal of radioactive elements from the human digestive tract.
Adams is a person of color whose ancestors include Africans and American Indians. He is of Native American heritage, which he credits as inspiring his “Health Ranger” passion for protecting life and nature against the destruction caused by chemicals, heavy metals and other forms of pollution.
Adams is the author of the world’s first book that published ICP-MS heavy metals analysis results for foods, dietary supplements, pet food, spices and fast food. The book is entitled Food Forensics and is published by BenBella Books.
In his laboratory research, Adams has made numerous food safety breakthroughs such as revealing rice protein products imported from Asia to be contaminated with toxic heavy metals like lead, cadmium and tungsten. Adams was the first food science researcher to document high levels of tungsten in superfoods. He also discovered over 11 ppm lead in imported mangosteen powder, and led an industry-wide voluntary agreement to limit heavy metals in rice protein products.
In addition to his lab work, Adams is also the (non-paid) executive director of the non-profit Consumer Wellness Center (CWC), an organization that redirects 100% of its donations receipts to grant programs that teach children and women how to grow their own food or vastly improve their nutrition. Through the non-profit CWC, Adams also launched Nutrition Rescue, a program that donates essential vitamins to people in need. Click here to see some of the CWC success stories.
With a background in science and software technology, Adams is the original founder of the email newsletter technology company known as Arial Software. Using his technical experience combined with his love for natural health, Adams developed and deployed the content management system currently driving NaturalNews.com. He also engineered the high-level statistical algorithms that power SCIENCE.naturalnews.com, a massive research resource featuring over 10 million scientific studies.
Adams is well known for his incredibly popular consumer activism video blowing the lid on fake blueberries used throughout the food supply. He has also exposed “strange fibers” found in Chicken McNuggets, fake academic credentials of so-called health “gurus,” dangerous “detox” products imported as battery acid and sold for oral consumption, fake acai berry scams, the California raw milk raids, the vaccine research fraud revealed by industry whistleblowers and many other topics.
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