China *JUST* FAILED AGAIN | The Great Reset Depression.

China today announced new stimulus

measures to prop up their economy but

what is the failing of the Chinese

economy going to potentially mean for

the United States and which company

specifically could be hurt the most and

which are some of them we haven't talked

about before let's think about that in

this video but first xbang did agree to

buying DD's Smart Car division aiming to

really eliminate DD from being an

ex-bing competitor and ax Bing's

actually doing pretty well in China

compared to the rest of the stock market

xping is up 70 percent year today

whereas if you look at what's happening

in the CSI 300 Shenzhen Shanghai index

you can see we're basically on a

beautiful downtrend in China a lot of

this downtrend is really driven by well

a the fizzling of the reopening boom

this right here is the beginning of the

year in January where markets reopen

boomed under this impression that

Chinese individuals would go on to

continue to support their economy and

spend money and as that fizzled so did

the stock market leading now for the

first time since 2008 China to introduce

a specific stock based stimulus now this

I thought was very interesting China for

the first time since 2008 halved the

stamp Duty on stock trades by five basis

points going from 10 basis points it's

almost like a commission the way to

think about it right point one percent

to 0.05 so having that and because this

is always sustainable lowering margin

requirements for trading great yes

that's just what we want is more debt

we're already basically in a highly

indebted world and at some point in the

future we'll have to deal with all of

the debt probably not super near term in

the United States though there are those

who believe the debt bubble is ready to

pop now I don't think the signs are just

there yet but yes that bubbles are a

problem and here's China saying let's

just take on more debt to try to prop up

the stock market which did work briefly

in the stock market in China opened up

about five percent but closed up only

about one percent as those gains it

appears were quickly sold this by the

way is pretty much the same thing that

happened back in 2008 when between April

to September of 2008 they cut their

stamp duties they ended up seeing very

short-term boosts in the stock market

but the downtrend usually continued now

after the stimulus measures we saw we

did see oil pop up a smidgen and that's

a big fear that a lot of people have in

America is that oh my gosh if China does

stimulate uh even if they just start

slowly ramping up stimulus it's going to

end up leading oil to Skyrocket and

that'll lead gas prices to go up and

then we'll see more inflation trickle

out through the entire economy in the

United States but oils basically flat

today after after these stimulus

measures so little impact so far and

that's likely because well generally

when China tries to manipulate their

stock market they end up only

temporarily helping things following

making things worse like the reason

evergrand it's worth realizing fell 90

was not because they fell 90 over the

last trading day it's because evergrant

has actually been banned from trading

for 17 months they just finally unlocked

evergrand so if people are you know

showing you how everything's Doom and

Gloom yeah China's economy is definitely

in the doldrums but evergrant didn't

drop 90 in a day it dropped 90 over the

last 17 months and this makes a lot of

sense so the real question though is how

does all this China uh potential modest

stimulus and overall slowdown actually

affect America I mean China's even

trying to slow walk IPOs now to keep

people focused on buying existing stocks

so that way they could prop up the

existing stocks they have and the

existing stock market feels better

ultimately hopefully leading to the

impression that China is doing better

than that actually is when the reality

is it's just not doing great what does

all of this mean for the US

let's think about that so Global GDP is

usually driven heavily by China in fact

the international monetary fund found

that a one percent boost in Chinese GDP

boosts Global growth by one-third of a

percent that basically means China is

supposed to drive one third of global

economic growth and this is really

important specifically for areas around

China think Taiwan Korea South Korea

Japan and other Asian Nations Thailand

Indonesia you name it and why is this

important well it's because Chinese

frequently travel to these destinations

and sped Bonnie and prop up the rest of

these Asian economies but they have less

of an impact on the United States I'm

going to go into exactly which companies

can be most impacted but right now

Chinese are traveling about one-third as

little as they were traveling back in

two thousand 19. so that means if there

were a hundred Travelers in 2019 now

there are only 33. now obviously that's

up from next to zero during the coveted

lockdowns as recently as well basically

November December of last year but it's

nowhere near what we saw in 2019. part

of this is probably because household

wealth has been devastated over the last

three years as China's real estate

bubble has finally started to burst

that's an example of what an over an

excessive amount of debt can end up

doing especially when Regulators finally

reign in how much debt you're able to

take out at real estate companies in

China just exactly what happened

basically real estate companies were

able to take on 110 120 percent debt to

assets that's basically like if you have

a hundred thousand dollar house they'd

let you borrow like a hundred ten

hundred twenty thousand dollars but this

is for the developing side and when

China's like just kidding we don't want

to do that anymore the Ponzi scheme

stopped and all of a sudden the economy

dramatically slowed down down leading to

actually a shrinkage of the consumer's

willingness to spend in China not only

because of the yin and yang so to speak

of China's like now we're stimulating

now we're not leading to this

shell-shock nature of a consumer going

yeah we're just gonna save a little bit

of cash and wait on this one because we

can't trust our own government some of

those similarities in the United States

but big differences being when China

conducts stimulus it's usually for the

stock market or businesses not for

consumers but what does this all mean

for the United States well consider this

Wells Fargo put together a hard Landing

estimate they estimated that a 12.5

percent shrinkage GDP shrinkage in the

Chinese economy over the next three

years would end up shaving off of the

U.S economy

just 10 basis points in 2024 see a lot

of fear-mongers on YouTube or otherwise

right now are making the argument that a

collapse in China is going to destroy

the United States but it's worth

remembering that never has the United

States gone into a recession because of

an external Force it's always been an

internal force and if the reality is

that we end up having a 12.5 shrinkage

in China over the next three years yes

Global growth will slow pressure on oil

and commodities will slow but U.S growth

may not that could actually be the best

case scenario for America and that you

have deflationary forces while at the

same time you're actually avoiding

hopefully a recession in the United

States or you have a very shallow one at

that as the 10 2 yield curve implies

Wells Fargo went as far as saying that

in 2025 maybe our GDP would be impacted

by about 20 basis points because of a

Slowdown in China what's more important

is probably exactly which companies

could be most affected by this slowdown

in China

and to understand this we've got to

think some thoughts here in terms of

imports and exports so when it comes to

the United States selling junk to China

only 7.5 of our U.S exports actually go

to China a lot of this is like

electrical machinery and Manufacturing

equipment as well as some compute

equipment that goes to China only 7.5

percent it's a small portion

now we certainly import more from China

than we export to them but that actually

helps as if China is facing deflation

which based on their PPI numbers they

are now all of a sudden we actually have

a Tailwind to consumers in our Market

now there are particular companies

though that do rely on China more now

some particular companies we've already

talked about we know 20 25 of Tesla's

revenues come from China that's going to

be problematic same thing about 25 to

maybe uh 28 for companies like Nvidia

and AMD relying on China that's

important but Nvidia and AMD suggest

that they're going to be able to

navigate the sanctions Wars and Tesla is

turning around to try to use China as an

inexpensive export Market basically for

vehicles for the rest of the world but

what's another company that might

actually be at risk that we haven't

talked about yet well it could be

apple apple relies on about 20 percent

of its revenues from China but not just

revenues and Supply chains China

according to Bloomberg in a recent

analysis put together by them has been

at the quote heart of Apple supply chain

making up as much as 80 percent of the

company's manufacturing footprint now

recently over the last year we've seen

probably last couple of years but we've

seen some of that manufacturing Reliance

moved to Vietnam in India and this is a

big shift that a lot of companies might

end up following moving production away

in this Reliance away from China which

ultimately just hurts China more but in

the short term apple is expected to

potentially not only see a revenue hit

from Chinese consumers maybe not buying

the latest iPhone or whatever from Apple

but also an expense increase as Apple

will re-establishes supply chains in

other areas now don't get me wrong

nobody thinks we're going to move away

from China over overnight and China will

probably do whatever they can in their

power to make sure companies stay in

China but it's not just Apple it's also

companies like Nike and Under Armor

luxury goods expected to get hit next

like lvmh or caterpillar thanks to less

development that are all getting hit

thanks to weaker demand from China so

considering exposure to China and your

portfolio was very important and history

suggests that buying the dip at the

first signs of some light stimulus

measures in China don't actually yet

break the downtrend you really have to

go through a real bottoming out process

this is where a lot of folks believe

that uh-oh we might actually end up

getting a real set of pain and a real

punch in the face with China's economy

and maybe that can actually lead the

Federal Reserve in the United States to

conduct some kind of easing in fact that

is sort of the mainstream thesis right

now that any pain that China Anna

creates for the US will just be on the

good note deflationary and worst case if

it actually started hitting us a reason

for the FED to cut along with the

deflationary impulse this is really

interesting that yes there are major

issues in China and with China's economy

but the actual implications of China

affecting the United States might be

much more limited than is generally

believed most of the time the China's

doom and gloom videos do well on YouTube

because people believe it'll lead to the

great reset of the US economy but again

historically that's never happened

before historically we ease away damage

from Chinese pain I mean it's the same

thing it's one of the contributing

factors people say to Jerome Powell's

easing in December of 2018 after the

Trump China trade war and ultimately

it's a deflationary impulse for us which

removes what the FED is most concerned

about

in terms of an actual economic impact

they're going to be some companies that

have an outsized impact like again Apple

Tesla and some of the other

manufacturers in China but ultimately

the pain in China something we're going

to watch very closely but is it heavily

impacting what I expect will happen to

the U.S economy not at all

congratulations man you have done so

much people love you people looked up to

you which I say yes meet Kevin where

does this mean we are in the economic

cycle should we be thinking about buying

real estate should we be thinking about

buying stocks I have a background in

real estate as a real estate agent real

estate broker real estate investor a

stock market investor and fund manager

why not advertise these things that you

told us here we'll try a little

advertising and see how it goes always

great to have you on Kevin path right

there financial analyst and YouTuber

meet Kevin