So i think china right now is on the brink of a massive storm and i don't think they have a choice. They're, absolutely in a double-edged sword situation they're damned if they do they damn if they don't and it's coming out of left field. Nobody saw this coming so what i'm referring to, of course, is the ever grand crisis. Now, if you read or listen to mainstream media about the ever grand crisis well, this is basically a ninth grade level.

I mean it's very easy to understand: it's regurgitated, it's shallow. They absolutely don't want to do any actual analysis or work in mainstream media, but why would they they have all these free views? I, on the other hand, i actually want to show you behind the scenes inside the engine what's really going on and why i think the storm i was referring to has already begun. Now, here's the story, evergreen in case you haven't heard about it. It's a chinese company engaged in a lot of different things, among others, real estate development and so far, they've accumulated 300 billion and change of debt, which they seem not be able to actually service.

Basically, in other words, they're screwed, they have a lot of debt. They can't seem to repay it, and now they have basically two choices. One is to go belly up and say: hey or the other go to the government say hey help us, because i mean it's your problem. You know this joke about a guy who owes one million dollars to the bank.

Well, that's his problem, but if that guy owes 100 million to the bank, it's the bank's problem. So this is what i think the evergrand people are basically banking on. Basically, the chinese government saying well, we have to bail you out, but that whole story you already heard on mainstream media in this video. I want to go deeper and i want to show you why i think the company has already started liquidating and nobody's telling you jack about it.

So here's the story just a few minutes ago - and this is what triggered this video i actually opened up reuters and i saw that they have an article, a brief article, a couple of lines just saying: hey a few minutes ago, we found out that evergrand has Started to offer this plan, if you're in their wealth management products - and they owe you money - they offering people to take apartments, car parks office space, basically giving away real estate to people they owe money to, instead of giving them cash, which is by definition, the definition Of liquidation, so reuters just reported about this just a few minutes ago. So there's no denial, not no confirmation from this company, but it seems that reuters kind of did their homework and they found a lot of documents that pointing out to this now check this out. The problem with this situation is as follows: now, if you're dealing with the liquidation type of event, it has a lot of repercussions about the market, we're talking about a company with 300 billion in debt and a lot of trickle-down effects. So, what's going to happen right now, this company is coming up to their pretty much investors and whoever they owe money to and basically saying well here's this real estate which we can't sell.

Otherwise we wouldn't be in this situation. Obviously we can't move this real estate, so would you take this real estate instead of the money? We owe you so obviously, if you were in the shoes of somebody who was owed money from evergrand, you wouldn't take it so easily. I mean, would you take a piece of real estate? Nobody wants to buy. Well, you would, but you would require a serious discount to accept that as a payment, which is exactly what's going to happen.

According to what i read in reuters, it seems to be right now at about the 25, maybe even a little bit more of a discount which they're offering all these assets to these potential people right, and i think the price will keep coming down so people at Some point will actually take real estate if the discount is big enough. They'll take real estate. So, what's going to happen, you have eight billion dollars give or take maybe between six and eight billion dollars of money. They owe to wealth management programs, which is written investors.

Regular joes, like you and me who they owe money to so right now. This plan seems to be going just towards these wealth management clients. So we're talking about six to eight billion dollars of real estate being flooded into the market by evergrand at basically basement bottom prices. Everything is in a huge discount, so they're flooding right now.

The market, with all of this cheap, real estate at floor prices, which is obviously going to crash even more they battle real estate market in china, flooding the market, which already isn't a deep situation with all of these apartments office buildings. Car parks at a massive discount is going to absolutely crush the chinese economy. They can't let it happen. So here is the kicker here's the interesting question, so the chinese government cannot allow this to happen.

What will they do? Is this not proof that the chinese government will bail these guys out, not necessarily because here's the interesting story about the chinese government, they have a political problem. Let's put it this way if they bail out these rich bankers, like the americans did with you, know the american bank system in 2008, they're no better than the americans. Now also, you have to understand in china the whole narrative of the rich against the poor and financial fraud. The government basically is thai.

They can't bail them out without basically looking like a bunch of hypocrites in front of the people they're trying to convince of this equilibrium, egalitarian society they're trying to create it's going to be a counterproductive act. So the government is dying to bail them out, but they can obviously they can't have also this real estate market actually go crashing down. So what will they do? I think what we're about to see in china right now is a very kind of a hybrid situation. So the government will not officially announce a bailout, they cannot politically, but what they'll do - and this is just my theory again - my opinion might be wrong - might be inaccurate - might be the ramblings of mad men, doing research, i'm just speculating so what i think the chinese Government might do here.

Is this hybrid well, they're gon na divide the debt into two sectors? One sector is gon na, be the foreign debt one sector is gon na, be the local debt. Now the local debt they're not gon na bail out everground, but i think they're going to put a lot of heat on the banks on the chinese banks. To basically give extensions, essentially cause every grant to be able to repay this by improving the payment terms. Delaying the payment terms, basically even repaying the loans through these banks directly, so that every grant doesn't have to they're going to do a lot of gymnastics to cause these banks.

Not to say that ever grant is defaulting on these loans. Again, just speculating, and they can do it with a lot of different indirect kind of products. However, they have literally no incentive to do this. For the foreign banks uh one.

It's going to come out and everybody's going to know about it, which is going to blow the lid of this whole theory, but number two. Why would they i mean they've, been very adamant about screwing the foreign investors in china? So what i think they're gon na do is gon na indirectly bail out the chinese money by basically going directly to the banks and the lenders and whatnot and talking to them and making it basically go away and they're going to stiff all the westerners. Everybody who's. Not chinese are going to get stuffed by evergrand and it is what it is, but again i'm just kind of speculating.

Maybe they repay everything, maybe they don't. I don't know, but if china doesn't do anything about it, they just let every grant start flooding the market. With this all this real estate, they have at the massive discount it's going to crush the chinese economy, and then it's not about trickle-down effects. You know people losing jobs and whatnot.

This is going to be a massive dub of real estate. So i think the next week is going to be very interesting because we have a very interesting mexican standoff here. I think evergrand is basically saying they'll start repaying with real estate. Is a signal to the government? Well, if you're not going to bail us out we're going to screw you - and i think it's really interesting to see what the reactions of government will be.

It's very touch and go this week is actually where a lot of these coupons come up. So it's going to be very interesting to see what happens. Let me know in the comments below, if you agree with me, if you disagree with me, if you think i have no idea what i'm talking about, let me know below and i'll see you tomorrow.