Folks China is signaling that there are big problems to come for the entire Globe Their country just abruptly delayed their GDP report. Their President has downplayed the need for Rapid economic growth as their Outlook is worsening and he is warning of quote dangerous storms. unquote. We will discuss everything that you need to know in this video.

We are also going to go over the details on how China may very well default on over 8 trillion dollars worth of debt. What you need to know about that, and the likelihood that that destabilizes the entire global economy. Let's Get Right to Work. And if you appreciate videos like this, make sure to hit that subscribe button and stay informed with us.

Believe It or Not Over 35 percent of our watch time comes from folks who are not subscribed, Folks that don't realize that the best prescription is often a subscription. Okay, so the Wall Street Journal reported this morning quote China abruptly delayed the publication of its third quarter gross domestic product AKA GDP on Monday a day day before it was set to be released. an unusual move as the country's ruling Communist Party stages a key political gathering this week. The quarterly GDP figure, as well as a series of other major economic indicators including monthly retail sales, property sales, and fixed asset investment originally to be slated originally slated to be released Tuesday were marked as delayed on the website of China's national Bureau of Statistics Monday afternoon.

The website also didn't provide a reason for this delay nor a date at which they will actually be released. So here we have China the second largest economy on Earth saying hey, we're not going to give you our GDP numbers, We're not going to give you any of the most important relevant data that would give us an update on a massive, massive player in the global space. And while there is no official reason for the delay as of yet, analysts are suggesting that it has a lot to do with politics. The original publication date would have come at a sensitive time only two days after.

Chinese leader Xi Jinping gave a rousing and confident address at the opening of the week-long 20th Communist Party Congress and China was already warning of lower and lower GDP numbers heading into this. The official Target for GDP growth this year back in March was around 5.5 percent, but by July officials had reportedly begun softening that goal, saying it's a guidance rather than a hard target. That's sort of like when a new year comes and you say I'm gonna go to the gym every single day and then maybe three weeks into January you're like, ah, you know, going every day to the gym that wasn't like a hard target or anything. that was just kind of like guidance and I'm just choosing not to follow that guidance.

But the point is, they were already softening before this release date and in fact, their President in his speech on Sunday he affirmed the country's recent shift away from Rapid growth economically on a GDP basis year over year to a greater focus on National self-sufficiency AKA It seems like he's Preparing People for bad GDP numbers and saying, oh, that's okay because we're not focused on that right now, we're just focused on self-sufficiency whatever that means now. Robin Brooks A chief Economist at Iif and a former Chief currency strategist at Goldman Sachs tweeted this: China's growth in the first half of 2022 was so weak that it leaves the annual average growth for this year at just 0.5 percent. If you assume zero GDP growth in Q3 and Q4 2022, only three countries have 2022 GDP growth that's worse than China Russia, Sri, Lanka, and Ukraine. And obviously, when you consider that two of those are in a massive massive war and are being hit with International sanctions, it's a pretty crazy situation to assume that China One of the biggest growth leaders of the last few decades is all of a sudden underperforming.

Literally every other country China is performing very, very poorly, which if these numbers end up becoming anywhere near true, that may mean that hey, it kind of makes sense that they delayed that because that wouldn't have looked so good at the Party Conference. Now keep in mind, as we've covered on this channel, quite a lot government agencies within the US often have massive curves on the data sets they provide us. Whether that's the CPI, whether that's in employment, and whether that's even in our GDP calculation. So when you look at countries like China which have less transparency in their processes, it's probably reasonable to assume that they have even more of a margin for error there.

AKA They are providing a lot more curving. so when they are going and they are delaying even their curved government created GDP numbers. Well, it's in my view that the numbers can't be too good if it was a victorious report I'm sure they would have been talking about it at this party conference. According to CNN a sweeping Crackdown by Beijing on the country's private sector that began in late 2020 and its unwavering commitment to a zero coveted policy have hit the economy and job market hard.

The property sector has also been bludgeoned, hitting some of the country's biggest home developers. The collapse in real estate, which accounts for as much as 30 percent of GDP has triggered widespread and rare descent among the middle class. in July Chinese Authorities dispersed protests by hundreds of depositors who who were demanding their life savings back from rural banks that had Frozen millions of dollars worth of deposits. The banking Scandal not only threatened the livelihoods of hundreds of thousands of customers, but also highlighted the deteriorating Financial Health of China's smaller Banks So the point of the matter here is: China is being hit with all these economic problems.

Crackdown On the private sector zero virus protocols, real estate bludgeons people are protesting their Capital being Frozen in Chinese Banks and further vulnerabilities coming to the surface. And based on the data that we have right now, this is a country that was one of the biggest growth leaders again and is now seeing the second lowest growth rate in 46 years better only than the 2020 covet numbers. So this is the worst year for China since 2020, and the worst year in the last 46 years when taking out 2020.. according to analysts, the vulnerabilities in the financial system are a result of the country's unfettered debt-fueled expansion in the previous decade and the model needs to change.

Let's talk about the debt crisis they are in because this is really the big thing that you should be worried about right now because this could affect the rest of the world Quote: About eight trillion dollars of debt has piled up from so-called local government financing Vehicles Lgfvs, which China has used to pay for infrastructure projects and spur growth since the Great Financial crisis. Bonds issued by these Lgfvs, however, are at risk of defaulting and pose another threat to president Xi Jinping as he pursues an unprecedented third term at the 20th National Congress of the Chinese Communist party which began on Sunday If you take this at its face value, the second largest economy in the world is at risk of defaulting on trillions and trillions of dollars worth of debt. Charlie Can't the government just bail them out? I'm sure the Communist Party would just bail out their Banks since they basically control them anyways. Sure, some analysts are same at quote to avoid a full-scale financial crisis that spills over to China's broader economy.

s P's Zoo Believes government intervention is likely the problem, though is that a big reason that China has grown so rap rapidly over the last 20 years and beat a lot of other countries is because of the extreme levels of debt they have taken out. But now that debt has already been taken out and the Chinese economy is stagnating if not Contracting at a rapid pace and so sure you can print more money, you can borrow more, and you can try to bail things out. But at the end of the day, if your economy isn't moving, if it's not moving at all and people can't work, what good does that do? It just creates bigger crises down the road and this is where it gets a little bit freakier because if you actually look at the behavior of the CCP under Gigi ping, then you start realizing that hey, they actually don't care that much about bailing out or intervening into different financial markets and credit markets. Quote: China has a record of tolerating defaults and bankruptcies under President XI as part of a long-term goal to increase the efficiency of state-owned companies.

As recently as late 2020, China saw a string of defaults following the post-pandemic stimulus. China is saying if a bank has lent too much and it can't get paid back and it can't pay its debts, hey, let it fail. Let it die. Let it take everything down with it.

Who cares? Things need to fail in order to make the whole system more efficient. Analysts here are saying that China they may actually tolerate the default on trillions and trillions of dollars of this debt, a crisis that would almost certainly leak into the rest of the global economy going over to U.S Equities. You wouldn't have known that anything was wrong today. Today was another very volatile Green Day similar to the one we saw last week that got erased the very next day.

Pretty green across the board, even International equities and including China Very, very green and certainly very strong numbers today in each of the major indices. and I Don't know if this particular run is going to hold or not, but what I was saying in yesterday's video is that I believe there's about a 70 chance that we get a bear Market relief rally within the next two or three weeks. The reason is because Q3 Earnings are coming out, but they are on a quarter where businesses still had pricing power AKA Businesses were able to pass on increased input costs to Consumers and thus it shows that when you get the reports, businesses were still able to have somewhat decent numbers. in Q4's reports, though you're going to see less and less of that, and especially in Q1.

But right now, if you think about it, markets think they've de-risked they've sold off a decent amount, but not as much as they should, but a decent amount. And I think the long and steady trajectory that we're on right now, which includes slower and slower business. I Think that people are going to look at that slow drop instead of a fast drop and they're going to mistake that as progress. They're going to mistake that as oh hey, it's not as bad as expected.

The analogy that I would make about this current market is: imagine you're on a plane and it's going down fast and then analysts stop and say, wait, hey, at least the plane is still in the air at this moment, right? Bullish. Yes, the plane is in the air, it's still flying, but it's going down fast and we could see where it's heading. But the problem is that analysts are looking at it from the perspective of oh, wait, no. Actually, the plane is still in the air even though it looks like it's going to hit a very, very, very hard.

Landing While it is still in the era right now, so you might as well buy back it. but remember, if you look overall, follow the trend: where is the plane heading? Is it heading for a soft Landing a hard Landing or a complete crash? You let us know down below. One of the things that really sort of reiterates what I just said and is very, very ironic is the situation with Bank of America's earnings and statements. Today the CEO came out and set the latest spending and savings data show that the U.S consumer is healthy.

yet that same bank just last week forecasted that we will see 175 000 jobs lost per month starting next quarter, which is a rate that is about half as much as the great Financial Crisis and could very quickly belong to levels that surpass the great financial crisis if this actually comes true. The premise that Bank of America projected is quote a hard Landing rather than a softer one and this was the head of U.S economics at Bank of America and they told this to CNN in an interview just a week ago from today. So here they are basically saying week over week we are heading for a terrible environment. But right now things are fine.

We don't see any problem with the US consumer and then the question is, well, okay, how can both things be true at the same time and it comes from the perspective of that plane, right? The way that things can be true is, hey, the plane is still technically flying even as it's going downhill. So you could say hey, the plane is still in the air, it's still on. tens of thousands of feet in elevation. But it's like, where's the trend heading And the trend seems to be heading into the damn ground And amidst all the green and rebind I Pulled up the Berg of Bloom this morning and the headline read: forecast for recession in next 12 months hits a hundred percent.

The latest recession probability models by Bloomberg Economist Anna Wong and Elizabeth Winger forecast a higher recession probability across all time frames, with the 12-month estimate of a downturn by October 2023 hitting 100 up from 65 for the comparable period in the previous update. So there's probability models here saying that the chance of a recession by October 2023 was 65 percent. Now it says a hundred percent. This is what that looks like on a chart you could see the red line is the sighted model.

It's now at a 100 recession probability something we haven't seen since. right before the coveted pandemic, and right before the FED pivoted on tightening in 2019, right? It actually also accurately predicted the 2008 crisis and the.com bust. The reason it just pump to 100 while quote. The deterioration in the Outlook was driven by a broad-based worsening in the economic and financial indicators used as inputs to the model.

Main variables: Inflation Central Bank Policy economic growth shocker, right? Those are getting worse. Who could have thunked that? Meanwhile, we continue to make new records in the options chains. Last week, Traders bought 19.9 billion dollars worth of puts to open. They bought only 6.5 billion in calls to open.

This is the biggest proportion of puts versus calls that we have ever seen in history, so take that as you will. Anyways, that gaps off today's video. Make sure to let us know your thoughts down below. If you want to get 40 off our ZIP Trader you program and lifetime access to the program, make sure to check out that link down below and put in coupon code flash40 before the code expires on October 21st which is this Friday have a good one folks and I will see you in the next video.

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