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The Pin Prick That Could End The Bubble

The Pin Prick That Could End The Bubble

The Pin Prick That Could End The Bubble

Takes Only A Tiny Pin Prick To Pop The Ballon

George Gammon Posts A Black Swan Alert

We could see a 50% correction in no time! So now we’re looking at a new one and maybe a much more scary and realistic pin prick than the others.

The Pin Prick That Could End The Bubble



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the pin prick to end the bubble well the
everything bubble is bubbling and the
black swans that could prick this bubble
they’re all around all it takes is just
a tiny pin prick and it could all
unravel we could see a 50 correction in
no time and today we’re looking at a new
one and maybe a much more scary and
realistic pin prick than the others it’s
an FTX crypto fraud type of scenario
that’s unfolding in China and it’s a 500
billion dollar hole that could cause
more damage in the US and Japan than
China itself so in this video I’ll break
down how this all got set up how China
grew so fast the fallacy that fell into
as they developed I’m gonna break down
the size of this new pinprick
threatening the largest debt bubble in
history and how just maybe they let it
all happen and why so let’s go
all right welcome back if you’re new to
the channel my name is Mark Moss I make
these videos to change the way you think
about money because almost everything
you’ve learned is wrong almost
everything you see you read it’s all
misleading it’s all missing information
it’s missing it’s lacking context but
don’t worry we make these complex
subjects easy to understand and
actionable now we’re talking about a
pinprick that could potentially unravel
the largest asset bubble the everything
bubble that we’re in today and we’re
talking about it being over in China now
China’s facing all types of problems
China’s facing a new financial crisis
that might make all the other potential
threats look tiny and this involves the
collapse of a shadow bank called
zongrong International trust which is a
shadow bank with many investment schemes
and which for years was viewed as one of
the top Financial groups in China but
now it appears to be nothing more than a
massive fraud like uh FTX only much much
bigger and it has a potential total loss
of 500 billion dollars but
I’m getting ahead of myself let’s go
back in the story and Trace how we got
here all right now the story of China’s
explosive growth from Farmers to cities
over the last 50 years from 1978 to
about 2008 has been the global example
of China’s rise to challenge the United
States during this time China’s GDP
exploded from less than 150 billion in
1970 to over 3 trillion in 2008. this
puts China’s average annual growth rate
over 10 percent per year during this
period and at the same time over 600
million people were able to go from
horrible poverty living in the country
on the farms and into cities and at
least earning a somewhat stable living
even if it was a very low income living
and it was an increased standard of
living from what they had now between
2000 and 2008 China became the factory
to the world as you know manufacturing
almost everything from the most basic of
things like uh clothing textiles all the
way to the most high-tech things like
high-tech cars computers and things like
that now this growth and the shift from
the country to the cities kind of caught
the whole world by surprise as most
economists thought a move like this
would have been impossible but you’re
able to move an economy from the low
income to the middle income and get the
ball rolling like this jump start they
thought once the middle income status
was reached then the path to becoming
High income was just a matter of time
this is what economists called the
takeoff Theory But as time has now shown
us that theory seems to have been wrong
and as a matter of fact potentially dead
wrong and in fact what we have now seen
over and over is it’s actually
relatively easy to move an economy from
the low income to the middle income all
you need is a bunch of really cheap
labor a little bit of urban
infrastructure some very basic education
and of course you need some foreign
capital and boom with all those
ingredients you can turn an economy into
a manufacturing Powerhouse we’ve seen it
over and over and over but the catch is
that this manufacturing is mostly
assembly based it’s the technical work
it’s the assembly it’s the labor now if
you’re a Marxist you think that labor is
the value right and the workers are the
ones making the money but if you’re a
business owner you know differently you
know that the labor is only one small
piece of the equation so for example the
iPhone like this which is predominantly
made in China in fact about 90 percent
of these iPhones are made in China but
the assembly the part that’s done in
China the assembly value added by the
Chinese workers is only valued at about
six percent of the sales price so what
about the other 94 you ask where does
that value come from Well turns out the
other 94 percent of the value added
comes from the United States The
Invention the patents it comes from
Japan with the gorilla glass it comes
from South Korea and they’re
semiconductors and 26 other countries
that Supply critical components and
parts now of course yeah sure China
assembles the phones but they did not
invent them they didn’t create them they
didn’t create the high-tech inputs they
didn’t provide the value now when it
comes to jump starting an economy you
have a few levels to get across so
typically a low-income country is
considered to have about five thousand
dollars of annual income per capita not
a lot the middle income countries begin
at about ten thousand dollars per year
per capita and the high-income countries
begin around 20 000 annual per capita
income and of course they have no
ceiling it’s unlimited right and for all
the talk we hear about China being the
second largest economy in the world
which it is what does that really mean
the second largest economy in the world
on an aggregate basis sure it’s the
second largest but you have to realize
that the United States has about 330
million while China has 1.4 billion so
when we calculate it on a per capita
basis it actually drops from the number
two position all all the way down to
number 77 in global rankings and it goes
right between Equatorial Guinea and
Botswana now on a per capita basis U.S
income is six times greater than China
so so much for China taking over the
world at least for now so the challenge
isn’t to go from a low to a middle
income country the real challenge for
China or any other country that’s doing
this is how to break out of the middle
income trap and reach the high income
status and this is the most difficult
part it’s extremely hard to do in fact
the only countries that have been able
to make this leap so far is Japan South
Korea Hong Kong Taiwan and Singapore the
list of countries Stuck in the Middle
income track along with China it’s a
long one Malaysia India turkey Thailand
Brazil Mexico Argentina Russia Chile and
others they all provide massive amounts
of cheap technical labor but it’s not
the higher level inputs that’s needed
for real wealth so how could a country
make take it from middle income to high
income status well if you’re a
capitalist you already know you have to
create massive amounts of value so for
China and these other countries the way
out of the middle income trap is to
develop their own high technological
intellectual property that can then be
applied by themselves or licensed out to
other middle-income countries which will
basically pay other licensing fees for
the technology they need to grow it’s
the only way you must deliver more value
now only when you develop your own
technology are you able to move to
higher value added in your manufacturing
and you can earn fees from others so the
key to forecasting Chinese growth in the
years ahead is therefore in technology
which is why the bite Administration has
been sending China back to the Dark Ages
by restricting their access to
microchips we’ve talked about this in
other videos in the past we’ll link it
up here and in the show notes down below
it’s also a big reason why the fight
over Taiwan is happening right now so
the question is can China develop its
own technology ahead of other Advanced
economy competitors and create the high
value added industries that come with it
so far the outlook here hasn’t been very
good for China even though they’ve taken
all the IP from all the companies that
work in China they still have shown very
little or no capacity to invent or
produce an areas such as advanced
semiconductors high capacity aircraft
medical Diagnostics nuclear reactors 3D
printing AI water purification and
virtual reality projects that China does
have on display that are Advanced such
as the bullet trains that run you know
almost 200 miles an hour they’re done
with technology that’s licensed from
Germany or France or with stolen IP and
Technology China’s produced major
technological advances but it’s done so
in non-sustainable ways including
massive amounts of excessive debt and
theft of intellectual property China’s
done little Innovation on its own the
stolen technology channel is being shut
down by bands on like I said the
advanced semiconductor exports to China
sanctions on the use of 5G systems from
Huawei even China’s ability to import
high-tech semiconductor manufacturing
equipment as a path to developing their
own semiconductors has been cut off
through export bans from the US and the
Netherlands the second hurdle to growth
in China is its over Reliance on
investment to drive GDP now a country’s
GDP account consists of consumption plus
investment plus government spending plus
the differences of exports minus Imports
so investment can be a really good way
to drive an economy forward assuming
a big assumption that the investment is
carefully Chosen and the Returns on the
investment exceed any financing costs
like an actual real investment but this
has not been the case in China now most
developed economies are at about 50 to
70 percent of total growth with
investment being around 25 percent in
China consumption is only 25 percent of
GDP while investment is 45 so massive
amounts almost double the amount of
Investments net exports are a large
percentage of that but the problem is
while that might sound good China’s
investing double the amount into their
GDP the problem is that much of that
investment is completely wasted it
consists of large white elephant
infrastructure projects such as the
Nanjing South train station made with
high marble walls and 128 escalators
that are mostly empty they’ve also
constructed entire ghost cities you’ve
heard about one after the other almost
to the horizon
also mostly empty this infrastructure
binge is financed with debt that’s now
both unpayable and now it acts as a drag
on real growth in other sectors of the
economy China’s trapped it’s in an
infrastructure and debt dead end with no
way out and there are many other
headwinds to Chinese growth in addition
to the middle income trap and now the
debt trap these include declining
demographics we’ve talked about this
they have an aging population Decades of
a one-child policy has put them into a
dangerous demographic trap they have a
geopolitical problem corruption extreme
income inequality and the rise of
President XI as the next Mao Zedong
right but there’s something much bigger
much more dangerous that’s going on and
this includes a much bigger danger to us
as well because it includes the risk of
a complete Financial panic and new
corporate failures that make the
notorious ever Grand situation collapse
look tiny all right now China is not
only slowing right now but it may may be
on the brink of a financial and economic
collapse that will reverberate around
the world and that’s because what
happens in China doesn’t stay in China
it’s critical to understand that what’s
happening in China today is more than a
Slowdown it’s more than a credit crunch
it’s much closer to a full-scale
financial collapse now I know what
you’re thinking the Chinese government
can just intervene with massive fiscal
stimulus right yeah they can but that’s
simply increases the already massive
debt burden kicking the proverbial can
down the road but a bigger question and
maybe a better question is do they even
want to what are the odds that President
XI just lets the system break down
knowing that most of the losses will
actually fall on the U.S investors and
Japanese Banks if president XI takes the
approach the damage will not be confined
to China in fact it would quickly spread
to Europe Japan and the United States
the damage in the US may be greater than
the damage over in China sort of a
strange kind of net benefit to China now
this comes at a time when the U.S Europe
and Japan are facing their own headwinds
we have a banking crisis reduce
commercial lending declining
manufacturing Contracting world trade
and this is despite consumers remaining
somewhat strong at least for the moment
so a Chinese collapse would be a force
multiplier that might throw the world
into a Global Financial panic in fact as
I said China’s facing the new financial
crisis that may make the others look
small and as I said at the intro it
involves the collapse of a shadow bank
called zongrong International trust now
zangong is not a pure play property
developer like evergron was Nor is it a
bank instead it’s what we call a shadow
bank now with some property development
activities but many other investment
types of schemes as well now for years
zongrong relied on its reputation as one
of the top Financial groups in China yet
it’s now been revealed that assets taken
in as wealth management products were
just just transferred to corporate
headquarters and used for various
speculations not connected to any
specific wealth management goals now in
this respect zongrong resembles as I
said this notorious FTX crypto fraud in
which they took billions of dollars of
customer funds and then diverted them to
their own type of speculation and spent
all the money now above all zongrong is
non-transparent and very lightly
regulated which has resulted in a
complete lack of accountability as the
firm fails it’s become impossible for
Regulators to respond appropriately
since they really have no idea what’s
going on inside the company Chinese
authorities have established a task
force to study possible contagion of
course the contagion has already started
which shows how behind the curve
Regulators are now I can’t say with
certainty how large the losses from
Zhong wrong will be although a total
loss of up to 500 billion could be on
the books taken into account shareholder
Equity wealth management products and
direct account now could president XI
and the CCP decide to let it collapse if
so Chinese stock markets Could Fall by
as much as 50 or more as a result but
the damage could be even worse in the
U.S Europe and Japan now this is one of
at least a dozen Black Swan events that
we can see on the horizon the question
is will this come to our shore and are
you prepared let me know in the comments
down below what you think about this
potential pin prick of this everything
bubble that we’re in and if you’re
prepared in the comments down below of
course as always give me a thumbs up if
you liked the video if you don’t you can
give me a thumbs down that’s okay but at
least tell me why and no I wasn’t paid
by China or the US to make this video as
I’m sure you’re going to leave in the
comments down below it’s ridiculous
that’s what I got today to your success
I’m out