Is This The End of China's Economy? #shorts #china #finance #youtubeshort

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In China, social unrest has broken out as a result of frozen deposits totaling almost $6 billion. To put an end to the demonstration, thousands of police were sent in. Following the protest, tens of thousands of Chinese homeowners refused to make mortgage payments totaling up to $300 billion. 301 projects in 91 cities apparently no longer receive mortgage payments. China is going through a recession similar to that of 2008, but much worse. The CCP is feverishly attempting to control the escalating unrest as a whole societal rebellion grows. Significant tension has been disclosed in internal government meetings, and it appears that it will only grow worse. China's social upheaval has exposed several weaknesses in the nation, and the consequences will ultimately have an impact on the rest of the world.

Recently, over 400,000 Chinese people had their bank deposits frozen. Depositors were simply refused when they attempted to withdraw cash from an ATM. People became panicked when they were unable to even withdraw their own money. A vast fraudulent scam that went on for more than ten years led to the bank freeze. Despite repeated attempts by the CCP to restrict them, protests against the bank freeze have gained widespread attention on Chinese social media. Even though the bank freeze only affected five specific institutions, the Chinese government estimates that hundreds more are at risk. Following the bank demonstrations' viral success, societal discontent was felt practically everywhere in the nation.

Several big problems were revealed during a recent internal government property discussion. Construction on 300 million square feet of land has been paused. Local governments can no longer bear the strain. A property fund of 200 to 300 billion yuan is said to be insufficient. Property sales are down 20%. Building starts are down 30%. China's current mortgage uprising is maybe the worst of them all. Because Chinese homeowners are failing to pay their mortgages, banking officials have devised a plan to allow citizens to put their mortgage payments on hold.

The total amount of outstanding mortgage payments is 2 trillion yuan ($300 billion). The issue with both the mortgage boycott and the bank freeze is that a domino effect is on the verge of occurring. Five banks failed, which spread to 20 banks, then 100, and finally the whole financial system. This is because the Chinese banking system, like practically every other country's financial infrastructure, is based on fractional reserves. When a person puts $1,000 in a bank, the bank does not keep that $1,000. Instead, the bank will hold $100 as reserves and lend out $900 in order to earn interest. The $900 lender will then spend $900 on goods and services.

The bank will now lend $810 while keeping $90 in reserves. The $810 lender will then spend $810. Someone will be paid $810 and will deposit it in the bank. As a result, the bank will lend $729 while keeping $81 in reserves. This cycle will continue indefinitely, causing the bank to be leveraged up to ten times. Because the lending is multiplied several times, this is known as the monetary multiplier effect. The money supply in the case we looked at started at $1,000 and gradually climbed to $10,000. The multiplication effect caused $9,000 to appear out of nowhere.












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