“Look into my eyes, deep into my eyes…”
From January 4, 2010
By now, everybody seems to know that China has a giant housing bubble. It is clear that artificially low interest rates and massive money printing by the government is fueling this bubble. But few know about the engine behind the monuments bubble- A giant shark loan ponzi scheme.
Angry crowd gathered in the street of Jishou city , in this city, 85% of households participated in the illegal fund scheme!
This is how this Ponzi scheme works:
Local governmental officials that are demanded from the government to produce double digit GDP growth numbers give real estate developers permits to build housing projects in return for bribes. They also get bribes in return for allowing the shark loan companies to operate under their jurisdiction. Some of them are active partners in shark loan businesses.
For example, a party secretary of legal affairs, that controls the public security bureau, which is a court and prosecutor division of government in Yanking city, in She Kiang province tried to run abroad using a passport in 2009 after he found out he can’t repay 60million Yuan. Every scheme has a ring leader whose job is to collect money from all the participants in the ponzi scheme.
When some of these ponzi schemes blow up, the party leaders always get bailed out first, and some even ask local business owners to lend them money, and then bail out their own personal fund. After that the ring leader turns himself in and gets protection from the local government. Read more…>>
And few noticed!
From 15 July, 2011
How does a massive ponzi finance scheme in China translate to a stronger $USD? Winston Wolfe connects the dots… JS
This news out of China is disturbing:
It is a scenic jewel, a hamlet of hill-hugging chalets, elegant church spires and ancient inns all reflected in the deep still waters of an alpine lake. Hallstatt’s beauty has earned it a listing as a Unesco World Heritage site but some villagers are less happy about a more recent distinction: plans to copy their hamlet in China.
Deja Vu all over again!
After taking photos and collecting other data on the village while mingling with the tourists, a Chinese firm has started to rebuild much of Hallstatt in Guangdong province, just 60 kilometres away from the Hong Kong border, hoping to attract wealthy mainlanders, “homesick” expatriates in Hong Kong and tourists. The project had drawn a mixed response from residents in the original village. Read more…>>
“To be rich is divine, comrade sucker!” Chou En Lai
From 1 December, 2011
We have already seen Chinese ghost cities, rickety buildings, and a construction spree that makes our own unionized labor force seem positive antiquated. Time to add empty malls to the list. The latest confirmed sighting of Chanos’ “treadmill to hell” Zerohedge…>>
From 26 June, 2012
Start at 7 minutes if you’re pressed for time!
“China will have whatever GDP growth number the government wants, even if the numbers do not add up.” Jim Chanos