09/17/2026
I listened to a video blogger this week - an independent reporter who had just visited China. He explained EXACTLY why China's domestic economy is imploding.
Chinese consumers are TOO FRIGHTENED to spend money. The Chinese consumer has money. China is still a manufacturing juggernaut. Hundreds of millions of Chinese workers still take home a paycheck every month.
They just don't spend it because they are too worried about the economy, or they are worried that Xi Jinping will attack Taiwan. As a result, no longer do Chinese consumers go out, eat in restaurants, and spend money in shopping malls.
Because consumers aren't spending., a great many industries are contracting. They are laying off workers, and the remaining workers are getting big pay cuts. Unfortunately for many Chinese workers, the struggling company doesn't even pay them. They are expected to come to work everyday, work long hours, and accept empty promises, instead of paychecks.
Employed Chinese workers see what is happening to the economy, so they are hoarding their money against the time when they too might be unemployed... or the country is at war. It's a classic DEFLATIONARY SPIRAL. [Such spirals are very difficult to reverse. They keep economists up at night.]
Suppose a US company has been in business for 20 years. They have tons of experience. They make a good product. Now suppose they suffer a temporary downturn and need money. They go to the bank, but the bank says, "I'm sorry, but you lost money last year."
These are the borrowers who come to Blackburne & Sons. We arrange a private money first mortgage based on the equity in their buildings. Assuming the loan pays as agreed, our investors earn 10% to 12% interest. For our investors, there is lot of risk; but we have been doing this for 46 years. https://hubs.la/Q04xKmG_0
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