Yet another Bank Run in China! -- The Chinese Financial System is Melting Down !

Bank run here, bank run there. Bank runs everywhere. First, it was Baoshang Bank, and then it was Bank of Jinzhou, then it was China's Heng Feng Bank and again a fourth prominent Chinese bank, The Henan Yichuan Rural Commercial Bank. Today yet another Chinese bank has found itself scrambling to prevent a collapse: Yingkou Coastal Bank experienced a bank run. The Bank was forced to stack bundles of yuan notes high behind the counters of its branches earlier this month, as the northeast China lender fought off a run on deposits while onsite government officials battled rumors of a funding crunch. Yingkou experienced the second bank run in China in the last two weeks alone. Rumors about the bank’s deep financial crisis spread online, triggering a run on deposits on Nov. 6 when a Reuters witness saw piles of cash behind counters at six city-center branches. Yingkou had no choice but to engage in what we have hence dubbed a self-destructive "doom loop: to help repair the damage and to keep the deposits from being pulled, the bank hiked its already high deposit interest rates to entice depositors." Gotta wonder why Bernie Madoff didn't try the same thing and offer people 1500% interest to stop the redemptions. Bank run here, bank run there. Bank runs everywhere. Welcome to The Atlantis Report. As reported by Reuters, Yingkou was the latest small bank to have its deposit-reliant funding base undermined by a flash mob of "running" depositors, spooked by the funding crunch that led to the shock state-led rescue of regional lender Baoshang Bank first which in turn prompted a cascade of small bank bailouts. To avoid an almost instant death, Yingkou had no choice but to engage in what it is known as a self-destructive "doom loop: to help repair the damage and to keep the deposits from being pulled, the bank hiked its already high deposit interest rates to entice depositors. Alas, by doing so, the bank - which can not possibly find investing opportunities to offset the higher deposit rates - has just accelerated its eventual insolvency. Bejing will send truckloads of cash and soldiers. The depositors will get some of their cashback while the Governor of the Bank will be shot, and the corpse left outside Head Office for a couple of days. All this should be a warning to anyone wanting to take on new debt. Income, jobs, even basic necessities cannot be guaranteed in such a fragile system. The current smaller banking industry is fragile due to its high leverage and poor liquidity management. Smaller banks need to be treated carefully and problems rectified as they emerge, such as corporate governance, to avoid contagion risks. This comes as no surprise to anyone who has been paying attention. China runs an export-based economy. The CCP plays a simple but highly profitable game: maintain an impoverished workforce of several hundred million that will work for say $1.00 per hour. That doesn't sound like much- and it's not. But multiply that by 500 million workers. Impoverished Chinese have the combined power to bring in 500 million dollars per hour into the Chinese economy. As such, China never has and will never have any incentive to see worker pay and quality of life increase- or the CCP would lose its primary asset and competitive advantage. There is no way that China is growing at 6%. There is no way that the U.S. tariffs aren't wreaking havoc. There is no way that Hong Kong's chaos isn't hurting up their financial system. The thing with bank-runs is, they usually accelerate before there is a lockout. I'd be surprised if any bank has coverage of anything more than 1% of its total exposure. The total deposits of China's banking system are more than twice the deposits of the American banking system. A problem in the Chinese economy is even worse than a problem in the American economy. The Chinese know the Ponzi scheme very well. Fly-by-night operators were common enough among the Chinese diaspora in Southeast Asia. I also expect a capital flight from this region, via Malaysia and Singapore. The Bernie Madoff Bombs will be going off faster and faster, where the Communists will no longer be able to control them. Every vital industry in China has ten times the capacity needed to supply the world. They are running out of space to build any more empty cities, and now they have a trade war with the U.S., and even 1000's of non american manufacturers are leaving as well. They have 500 million peasants who live in poverty and have no future. And they are wasting large amounts of money on building a military and pissing off every one of their neighbors. Their vaunted currency reserve will disappear from stopping the frauds from taking down the system and from officials taking their cuts and running as fast as they can for the exits. The game is just about over. Bank runs are one of the last signs that they are finished. The Chinese economy is going through real tough times. It resembles U.S. before the 1929 Great Depression. Before 1929, America was the world's most significant production power. That was driven by credit growth and the additional production capacity. Thereafter, the U.S. stock market collapsed. At present, we notice that the Chinese economy is slowing down and inflated with high loans, especially after the 2008 financial crisis and has an excessive production capacity. Jack Ma Says U.S. – China trade war could last 20 years . Today, all the world stock markets are already watching the situation between China and America, worrying about a possible the stock market crash. Jack Ma says China's trade tension could last 20 years. That means a disaster not for only the U.S. but also for the whole world economy. Going back 5 or 6 years, I used to talk to these Chinese investors in San Marino, California . They would tell me what business their family was in, or their uncle, or their father, etc. I would without exception think, how in the hell did you just pay cash for two houses in San Marino! Which they were willing to brag about. Later, I realized,San Marino and other California Chinese hotbeds were just giant money-laundering operations by people who probably borrowed $20 million or so from a "bank" in China for some shadow development project they skimmed. China should ask America to liquidate the U.S. assets of these crooks and repatriate that money back to the actual hard-working people in China. When a society lacks prudence, what happens is that society collapses or goes into chaos. It’s not a coincidence that the average lifespan of a fiat currency is only 27 years. I don't want to sound apocalyptic, but if you are in the last 20% of your working life, you don't want to find out you worked all those years for a currency that is more or less backed by thin air. Rollover your 401K to an IRA that allows holding physical gold and/or bitcoin. The markets can be irrational more than you can be solvent. So this will all end badly but because both countries can keep printing money this can go for a while longer. But it will all end terribly. A systematic global crash. The financial crisis is inevitable, not just in China but everywhere else. This may be the beginning of that crisis or merely a hint at what the start of the real thing might look like. Last I heard, China still has a yuan printing machine in good working order. Let's see how they handle this. Bank run here, bank run there. Bank runs everywhere. The whole world economy teeters on a house of cards. This is the beginning of the global crash.











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