WORLDWIDE RECESSION: Will China’s Economy Continue to Shrink Pulling the World into a Recession?

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this meeting is being recorded good

morning good afternoon good evening

folks michael zuber one rental at a time

talking with a 10 year veteran of wall

street how you doing taylor

doing great thanks for always having me

this is so much fun oh dude i have i

have a blast every time i have no idea

if anybody watches our videos but at

least i have a good time

and we have no idea what each other

going to say we just go back and forth

and rave and it seems to work out there

you go there you go well hey something i

wanted to talk to you about because uh

you know you’ve you’ve traded money ran

money before is

i guess i’ll ask it this way first how

important is following at least at some

level what is going on in china uh you

know the second largest economy

out there um historically speaking has

been something you watched you don’t

really care you know tell me about how

you consider china

oh i mean economics at the end of the

day are what drives markets and you know

stocks et cetera being very small pieces

of those markets but nonetheless

economics are what drive it from a

top-down perspective and to your point

the second largest economy in the world

is china and they are this blossoming or

has been throughout the past decade or

so two decades have been this blossoming

middle cap middle class that’s driven

so much in the way of demand et cetera

they’re obviously a huge labor supply to

the world um they are hugely hugely

impactful and a piece of the supply

chain to the entire globe hugely

important yeah i think that i agree

right it’s it’s

especially as i’ve always looked at them

casually is kind of the

right or wrong to me they’ve always been

kind of that manufacturing engine right

as i was coming up they were like the

cheap labor now obviously it’s gone

elsewhere as middle classes come up but

now let’s fast forward to 2022

and china


i got to tell you i look at some of the

and again their command and control

central you know central planning all of

that stuff president xi jinping

yes xi jinping he has made some

very interesting decisions that i think

has crushed the middle class crushed the

economy and frankly he’s up for his

10-year leadership later this year

i mean he whether it’s covid or or what

he’s done to the real estate market or

what he’s done in the stock market i

don’t know where you want to go first

we’re going to talk about all three


i don’t think we the rest of the world

have fully felt the impact of china

going backwards i think they’re

retreating from what you said the

blasting i think they’re going backwards


no doubt no doubt his predecessor and

his name is escaping me but his

predecessor was much more of an open

economy thinker um xi jinping is much

more of a nationalist and so he is a

let’s close the doors let’s focus in

internally internally on how we’re going

to run the economy and he does not like

capitalism so think about old cold war

days like things are playing out in the

same function where you see china taking

a step massively in one direction

obviously russia is along their side and

then the western world is shifting the

other way and diabolically different

views of the world i mean look at jack


jack ma

so he he steps up and makes some

comments against the government more in

a capitalistic tone and he goes missing

for six months what happened to jack ma

where is he he’s gone and he resurfaces

six months later and so i mean their

tone is obviously very much so

towards the government-centric

rant economy than that of everything

that we’re used to seeing yeah i think

is it called the greater society


again yeah

something like that yeah yeah i think i

think i think it i think that is their

moniker basically basically everybody

everybody goes up there’s not the

you know the one percent as we would

call it here in the state so correct

yeah it’s um it’s pretty interesting to

watch and again i they’ve gone backwards

in so many so i think they’re a

punishing entrepreneurship

i think that is happening would you

agree with that statement

oh i i i mean case in point look at jack

ma again yeah he speaks out and it talks

about the the efficiencies of capitalism

and the ability for people to fight for

a better life for themselves

we have to go back to the adam smith

conversations et cetera but at the end

of the day you know everything comes

from the

person in a capitalistic society ability

to make their own way and make outsized

growth based upon that

is really what spurs on innovation and

growth and that’s why our country has

been the economic leader that it has

been whereas others have taken another

approach we want to share wealth and um

i hate to say it and

this is i’m not hugely political one way

the other but you cannot point to an

economy and say here is a really good

case in point for socialism or

you know communism whatever it might be

fascism whatever extreme you want to

look at here’s a great point as to how

this works you can’t find one well again

in the moment the decision is made to

punish entrepreneurship it may feel good

it’s kind of like rent control yeah it

feels good the first couple of years but

there’s all these other impacts so what

does this mean for china it means all of

the entrepreneurs the future innovators

are going to leave

they’re going to flee

some legally some will just get out any

way they can so you’re going to see

china not be the innovation engine

they’ve been the last couple of decades

and that will have ramifications without

question and unfortunately for them a

knock-on effect of that is they might

then become the low-cost labor supplier

for the world instead again right they

may go backwards second they have chosen

to punish uh so i’ve actually been to

china my wife is from taiwan we have

family over there so i’ve been there i


uh they had a couple of decades of

building basically ghost cities i have

been there i have been in a 20 or 30

story building that looks finished from

the outside that is concrete on the

inside no wiring no plumbing


so they have chosen to

redline lenders and home builders

and they’ve essentially crushed real

estate i believe their real estate

prices are falling now that’s not being

reported transactions are certainly


chinese don’t have 401ks they don’t have

pensions per se

except in the government

for most families it was a lifetime of

savings and they bought a home

if they were lucky enough they bought

two that second home was not a rental

it was a savings account they didn’t

rent them out they didn’t they didn’t

finish them

it was their

asset that that would take care of them

in retirement and they’ve just destroyed

them they just destroyed the middle

class and we saw this six months ago in

a very early starbucks report where they

stopped buying starbucks coffee followed

on by a nike report where they stopped

followed on by quarters later the same

thing so their consumers

uh are retrenching like never before i

believe the chinese economy will have a

negative not four percent growth which

is unheard of low for them i think it

might go negative but they won’t report

it because again i was going to say you

aren’t going to see it no you’re not

going to see it it won’t be reported but

it’s happening

uh over there what do you think yeah

yeah that’s that’s the thing with with

chinese economic data is that you’ve

always had to find tooth comb it because

you can’t just take it at face value

they say they grow about eight nine

percent et cetera and when you start to

back things out and look at things from

the accounting perspective that we do

it’s like

a lot like five and a half percent to us


yeah that’s a very that’s a very

interesting interpretation of the

general ledger yeah so do they just out

of curiosity when you were there and you

were in these buildings or or one of the

buildings whatever it may be do they try

to keep people out of them is this

something oh for sure yeah

yeah i mean i mean so again my wife

speaks the language we have friends and

family there right so we we were given

i don’t know i don’t know if it was

behind the scenes look but we were taken

where we should have gone we were

foreigners we probably shouldn’t have

been there

and it was it was it was

it i mean i’ve never been to chernobyl

but i’ve seen the pictures where it’s

like it’s like like there’s a park and

there’s like toys laying it’s kind of

felt like that it’s like i’m

it’s this is this is it was really

really weird and it doesn’t look like

mario pole in russia right now because

it’s not bombed now no it’s actually

relatively nice it’s just a ghost town

it looks i mean from the outside it

could have been new york city

as soon as you got past the skin it was


they’re like 40 done there’s a lot left

to do

that’s got to be an eerie eerie feel it

was bananas it was weird it was weird so

again i think i think china again i

think we’re going to see a worldwide


uh meaning worldwide negative gdp growth

as we sock out

uh dollars right because again the uh

the central banks from around the world

pumped about two trillion dollars into

the market in 2021

this year it’s estimated that world

banks will extract half a billion

however that’s a 2.5 bill trillion

dollar swing

right that’s got to come out of

somewhere i don’t see

we just got to get through the pain is

my opinion and i don’t think china will

be spared

yeah yeah and and it’ll be interesting

to see this and we talked about this for

a second but like they’re entrenching

themselves right now with russia and

they haven’t made a a full-on play to

move towards russian thinking or

supporting them in the war which if they

do that from a monetary standpoint or a

troop standpoint that will be economic

disaster is an understatement as to what

that will be for the chinese economy

what’s the the difference between what’s

going on with russia and china is that

china is a massive export economy

correct whereas russia is not as much of

an exporter county yes they export

energy so when we cut the ties to them

that’s an energy problem for them which

is 10 percent of their economy or

something like that but when you look at

it from china’s perspective if we were

to start to cut ties with them

and sanction them that would be a

massive massive massive hit because they

are so reliant upon their export economy

yeah it uh

that’s exactly why she won’t do it she

will not yeah

it would be economic suicide suicide

yeah it would be it would be a problem

well this has been a lot of fun i love

love speaking with you and see what’s

going on again where can people find you

yep follow us at life goal investments

on instagram we’re on all the platforms

but we’re most constant on instagram so

again it’s at life goal investments

awesome thanks taylor

you’re the man michael thank you

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