China’s MASSIVE Risks To Watch: Crypto, Macro, & WAR!!

If you sit by the river and watch one Day the corpse of Bitcoin will float in Front of you This is a direct quote and it comes from Pan gongsheng the recently appointed Head of the People's Bank of China it's Safe to say that it foreshadows some Changes in China's recent crypto stunts And it's not just crypto either Pan's Appointment comes at a time when the Chinese economy is struggling the Chinese yuan is collapsing and China's Relations with the US are rapidly Deteriorating So today we're going to Tell you everything you need to know About how China could impact crypto Macro and geopolitics in the coming Months make no mistake this is a video You need to see Let's start with a bit of background you Can think of this video as being an Unofficial part 2 to our video from Earlier this year about China's Reopening to bring you up to speed Investors were expecting the Chinese Economy to Boom after pandemic Restrictions were dropped late last year This never happened instead we started To see statistic after statistics Suggesting that the Chinese economy was Slowing down fast mainly through figures Related to Manufacturing now this wasn't Too surprising given that China's Economy is reliant on the consumption of

Goods in the west and westerners have Been heavily buying Services instead it Was only surprising to those who Believed that Chinese consumers would Make up the shortfall this was somewhat Logical given that the country had just Exited almost three years of lockdown There was an expectation that there Would be lots of spending in China in Much the same way as we saw in the West The key difference is that China didn't Provide direct stimulus to its citizens The same way Western countries did China Has also been cracking down on its Housing market the only asset class that Chinese citizens felt comfortable Investing heavily in Lo and behold they haven't been big Buyers lately as a result the Speculative rally in Chinese stocks was Quickly brought to a halt as you can see Chinese stocks had been rallying since Last October and hit a local top in February Since that time they've been in a strong Downtrend and even appear to be painting A nasty Head and Shoulders pattern Now in theory a weaker than expected Economic recovery in China should have Also resulted in a correction for stocks In the U.S and elsewhere this is because The narrative was that China's economic Recovery would be epic and it would Somehow result in lots of consumption

That would increase profits In reality however stocks in the U.S and Elsewhere continued to Rally this was of Course mainly due to other factors such As a rise in liquidity because of the de Facto bank bailouts in March and the AI Boom however it was also due to the Perception that the Chinese Central Bank Would start to stimulate in other words Bad news was still good news because Investors immediately pivoted to Expecting that China would respond to Its economic weakness by printing Massive amounts of money There's just one problem with that Approach and that's that the Chinese Yuan has been collapsing in value too if The People's Bank of China responded by Printing money then it would cause the Yuan to collapse even further Historically this would make China more Investable since it would become cheaper To manufacture Goods in today's world However geopolitical tensions have Limited this kind of investment And to make things worse the yuan is Sitting at a critical level around 14 us Cents as you can hopefully see this is Its lowest value in almost 15 years If it breaks below this level it could Quickly lose another 10 to 20 percent of Its value this would cause chaos in China and issues for the CCP that's why The People's Bank of China or pboc made

The DraStic move of appointing pan gong Sheng as its leader earlier this month To put things into perspective the pboc Had reappointed its two top governors in March this year replacing them both with Pan makes sense once you understand just How powerful this guy is as explained by Macro analyst Western Nakamura pan had Been Deputy Governor of the pboc for Over a decade he actually helped China's Two largest banks go public that is list Their stock on exchanges take a second To consider that four of the five Largest banks in the world are Chinese Pan did the IPOs for two of them pan has Also been the director of China's State Administration of foreign exchange or Safe since 2016. the government arm in Charge of China's Forex Reserves as Director of safe he's overseen the Imposition of China's strictest Capital Controls and the aforementioned Crackdown on Chinese real estate and Last but not least pan is also the head Of China's leading group of Internet Financial risks and Remediation as the Head of this organization he has Overseen the Crackdown on both crypto And tech companies in the country He was The Man Behind the first crypto Crackdown in China back in 2017. Put simply pan is the Michael Barr of China and if you don't understand the Reference I'll leave a link to our video

About Michael in the description now Unlike the low profile personalities Behind the crypto crackdowns in many Other countries pen has been visibly Outspoken about his intentions the quote About Bitcoin in the intro is just one Of many examples Here's another quote from Pan about Traders shorting the yuan in 2018. quote In recent years the pboc and safe have Accumulated Rich experience and policy Tools in dealing with exchange rate and Foreign Exchange Market fluctuations we Have crossed paths with those who Attempt to short the Yuan a few years Ago and we are familiar with each other I believe our memories are still fresh Translation if you try to short the Chinese Yuan I will pump it and you will Get wrecked now before you get too Intimidated Weston pointed out that Pan's posturing is exactly that he's Talking the talk in the hopes he doesn't Have to walk the walk This is part and parcel of China's So-called paper tiger diplomacy Even so pan clearly has a history of Walking the walk when it comes to crypto The caveat there is that pan isn't Anti-crypto per se as Western also Explained pan is only anti-crypto Because he's anti-anything that could Result in capital flight he's against Anything that would allow Chinese

Citizens to get their money out of the Yuan in the event of say a 10 to 20 Crash in its value obviously pan also Has a history of walking the walk when It comes to protecting the Yuan hence Why he now holds both of the pboc's top Positions Believe it or not but Pan's defense of The Yuan could do serious damage to the Stock market I'll explain why in a Moment first we need to talk about Crypto as I mentioned a few moments ago Pan is only anti-crypto because it Facilitates capital flight out of China Which is what pan wants or rather needs To stop as part of his mission to Protect B1 given that the yuan is Currently weak this means there's a high Likelihood that pan will take a swing at Crypto the good news kind of is that pan Has already pummeled the crypto industry In mainland China so there isn't much More damage he can do there the bad news Kind of is that Hong Kong has recently Been embracing crypto and since it's Basically a part of China this means it Could soon reject crypto instead This would be unprecedented and yet Entirely predictable if you watched our Video about Hong Kong's crypto adoption You'll know that it only began in October last year you'll recall this is When Chinese stocks were starting to Rally it's also when the Chinese Yuan

Was starting to recover from a recent Low now this is significant because it Suggests that Hong Kongs and China's Crypto adoption could ultimately be Dependent on the strength of the Chinese Yuan If the one is strong crypto is safe to Adopt because it won't result in much Capital flight but if the yuan is weak Capital flight becomes crypto's primary Use case Here's where things get interesting Tethers usdt is reportedly a popular Tool for wealthy Chinese citizens Looking to move their money in and out Of the Mainland according to protos one Of tether's blog posts actually cited Quote evading Capital controls as one of Usdt's primary use cases a now deleted Sentence you'll be shocked to hear the Only question is how much usdt is being Used for this well we may have found an Answer in our video about stablecoin Market caps Tether CTO Paolo Arduino mentioned that Around 40 percent of the demand for usdt Was quote offshore dollar Holdings some Percentage of this is probably related To Capital flight Here's where things get concerning Tether and its sister companies are Reportedly based in Hong Kong if tether Has any significant operations in Hong Kong this puts usdt within Arm's Reach

Of CCP agents like pan who want to knock It out Again this assumes tether has Significant operations there if they do The CCP will know about them That's because one of tether's largest Shareholders is or rather was Zhao dong A Chinese citizen who helped tether Launch its Yuan stablecoin Zhao was arrested for money laundering In May 2021 so the Chinese authorities Have him if he knows anything they know It too put simply Zhao could be the Sam Bankman freed of China and if you want To explore that rabbit hole I'll leave a Link to our video about ftx's secret Bank in the description now even if Tether's operations are beyond the reach Of the CCP trons operations are Certainly not for context more than half Of the usdt in circulation is on the Tron blockchain and Tron has very close Connections to China these Myriad Connections are mostly outside the scope Of this video but I'll give you one Tron founder Justin's son recently Bought the Hobie cryptocurrency exchange From its founder Leon Lee according to Bloomberg Leon has close ties to China's Central Bank and according to decrypt The CCP runs quote regulatory nodes on The huobi Chain again this is just the Tip of the iceberg In Sum there's a risk that the pboc

Could crack down on crypto under its new Leadership Hong Kong's recent crypto Adoption means that tether Tron or both Are possibly within Pan's reach if he Hits either of these entities the crypto Market could be in a lot of trouble but He probably won't unless the Yuan Weakens further still the fact that the Pboc issued a one billion dollar fine to Alibaba just a few days after pan took Up his post doesn't Inspire much Confidence in crypto's supposed safety For reference Alibaba was fined for Money laundering violations something The pboc could easily apply to any Crypto project or company But let's suppose that pan manages to Pump the Yuan now there's only two ways He can do this the first is by raising Interest rates this would only crash the Chinese economy even more so that's off The table The second way is by selling pboc Reserves to buy Chinese Yuan this is Where the macro comes in for those Unfamiliar central banks around the World hold large amounts of reserves Consisting of multiple assets mostly U.S Government debt AKA U.S bonds this is Because U.S bonds earn a yield and a Very liquid meaning they can be bought And sold in large quantities without Impacting the price Depending on your Source the pboc holds

Anywhere between 800 billion and one Trillion dollars of U.S bonds making it The second largest holder of U.S Government debt outside of the US the First being Japan In Practical terms this means the pboc Has up to one trillion dollars it can Use to support the Yuan this is done by Selling U.S bonds for US Dollars and Then using those US dollars to buy Yuan This is what's meant by a currency Intervention and it's exactly what China Did late last month There's just one problem and that's that If the pboc sells too many U.S bonds it Could cause their prices to drop given That U.S bonds are the highest quality Collateral for loans in the financial System a big drop in U.S bond prices Could cause serious Market instability Not only that but selling U.S bonds also Causes interest rates on those bonds to Rise now if you watched our video about The debt ceiling deal you'll know that The US government has been selling U.S Bonds to refill its bank account at the FED logically this is also creating cell Pressure for U.S bonds that's why the Treasury has been focused on selling Short-term U.S bonds called bills this Is in part because the demand for U.S Bills is higher than for U.S bonds and In part because too much selling of U.S Bonds would cause issues for U.S banks

FYI commercial Banks hold lots of U.S Bonds on their balance sheets too it's The losses on their U.S Bond Holdings That have caused the recent banking Crisis that's why it's fascinating that Treasury secretary Janet Yellen recently Flew to China it's believed that this Was purely for geopolitical reasons Which was probably the case at the same Time though it's possible if not likely That the topic of the pboc selling U.S Bonds came up when she met with pan After all if pan walks the walk on Defending the Yuan this time around it Could cause a round two of the banking Crisis in the U.S plus serious Volatility in stocks and other assets Chances are that Janet offered to lend The pboc U.S dollars which it can then Use to buy you one via the Federal Reserve swap lines judging by the Headlines following Janet's visit However it didn't go too well this Suggests that if Janet did give an offer Along these lines the pboc didn't accept It that's because this offer likely came With lots of conditions that the pboc Didn't like if this is indeed the case Then it sets the stage for geopolitical Conflict which naturally brings me to The geopolitical component of the pboc's Change in leader I'll start by saying That geopolitics is above the pay grade Of the entire coin Bureau team so

Consider this to be pure speculation on Our part that said there seems to be a Race to the bottom between China and the US on trade restrictions for example the US recently announced that it was Considering extending restrictions on AI Chip exports to China China retaliated By restricting the export of rare earth Minerals used to make AI chips to the US The US followed suit by announcing that It was considering Banning in China from Accessing U.S Cloud Computing Services From our perspective U.S restrictions on Trade and investment in China are going To intensify in the coming months in Large part due to the disagreement about The pboc's approach to protecting the Yuan that's because of the Practical Effect that these moves could have on The economies of both countries China selling lots of U.S bonds could Create problems for the U.S economy and The U.S restricting trade and investment In China could create problems for the Chinese economy in principle China has The upper hand because its trade Restrictions could do just as much or More damage to the U.S economy in Practice though this would truly be a Race to the bottom for both countries Because their economies are Fundamentally intertwined if the U.S Economy suffers the Chinese economy will Suffer and vice versa it seems the real

Question is which economy can suffer Enough to win before there's a Full-scale revolution well the answer Really depends on your perspective on The one hand the US is more politically Divided than it has ever been and Additional economic hardship will only Worsen this on the other hand the US Government has the power to print U.S Dollars that it can use to buy whatever It wants It's a similar situation with China on The one hand China is inherently Unstable due to its centralized Authoritarianism and its closest allies Are more unstable countries namely Russia on the other hand Russia's Resources and China's productive Capacity means they can make anything That money can buy never mind that China Has also taken over large parts of Africa more about that in the Description Now as far as we can tell there are two Possible outcomes too this emerging Geopolitical conflict the first is that The multi-polar world that's starting to Form comes to fruition with China Russia And their allies in the global South Separating economically from the US EU And their allies in the global North Given how connected the global economy Is a full separation is arguably Impossible

This means that countries will Constantly be stuck between deciding Which of the two they need more the US Dollars to buy Commodities or the actual Commodities themselves In this case the decision depends on Position countries that have their own Commodities or are close to countries Who have them will be the first to get Off the US dollar Countries that don't have their own Commodities or aren't close to countries Who have them will likely stick to the US dollar for as long as they can that Is until it goes to zero like all feared Now the consequences of this Dynamic are Likely to be kinetic which we're already Starting to see as you might have Guessed that's the second possible Outcome to this geopolitical instability Not a World War but many conflicts in Different regions namely regions where U.S dollar countries border commodity Countries The elephant in the room of course is China and Taiwan and you can use the Link below to find out why a flare-up There could be imminent What a time to be alive And that's all for today's video folks If you learned something new let me know By Smashing that like button if you want To keep learning subscribe to the Channel and ping that notification Bell

If you want to help others learn share This video if there's something you need To impart drop a comment and if you Happen to hold crypto and are looking For a safe place to keep it or a cheap Way to trade it head on over to the coin Bureau deals page it's got the biggest Discounts on the best hardware wallet And up to forty thousand dollars of Bonuses and airdrops on the best crypto Exchanges link is in the description Thank you all for watching and I'll see You next time my name is guy and this is Goodbye


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