Skip to content

As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest

Tyler Durden
Zero Hedge
Aug 3, 2010

Submitted by Israel’s Financial Expert

China’s Shark Loan Ponzi Finance- As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest

Local governmental officials that are demanded from the government to produce double digit GDP growth numbers give real estate developers permits to build housing projects in return for bribes. They also get bribes in return for allowing the shark loan companies to operate under their jurisdiction. Some of them are active partners in shark loan businesses. For example, a party secretary of legal affairs, that controls the public security bureau, which is a court and prosecutor division of government in Yanking city, in She Kiang province tired to run abroad using a passport in 2009 after he found out he can’t repay 60million Yuan. Every scheme has a ring leader whose job is to collect money from all the participants in the ponzi scheme. When some of these ponzi schemes blow up, the party leaders always get bailed out first, and some even ask local business owners to lend them money, and then bail out their own personal fund. After that the ring leader turns himself in and gets protection from the local government.

Most of the funds that are collected in this classic ponzi finance go to local land purchases and real estate development. Part of the funds are used in order to pay back the rolling loan. The short term interest rate in this black market is very high and ranges between 20%-150% annual rate. The sources of the ponzi funds are diverse, as ordinary citizens, banks with corrupted bank officials, and state enterprises play the game.

This month, another Shark Loan Ponzi Scheme Collapsed in Huang Qiao Town In Jiangshu Province

China daily economic news reported:

Huang Qiao Town which is located in Taixing County, Jiang Shu Province is known as “No 1 town in North Jiangshu” According to the article, a few months back, expensive cars were roaming over the streets. But now after the collapse of a giant ponzi scheme supported by 9 so called “Mark Organizations” (local name for shark loan ponzi schemes), many cloth shops, and barber shops (in China, many so called barber shops are in fact brothels) are closed, and the expensive cars are gone. Town residents are posting their shops and cars for sale to pay back shark loans.

The collapse of this ponzi scheme at the town level, is a sign that even the bottom part of the hierarchy of the Chinese society was exposed to these schemes. This exposes the pervasivness and seriousness of the shark loan problem. more and more local participated in this get rich quick frenzy since normal business profits wages simply are not enough to make ends meat.

The collapse was triggered by the actions of one of the female ring leaders that turned herself in after she found out she can’t afford to pay the high interest rate anymore.

Though all the “ Mark Organizations’ are run by independent ring leaders, their funds are connected . As a result, after the exposure of her failure, 9 ring leaders are now under police custody. The locals even have a song for this shark loan frenzy:

People die for money

While birds die for food

They cracked down on the loan sharks

And now tens of thousands are in panic.

According to reports, 80 percent of families in Huang Qiao were involved, and major ring leaders include government officials and their relatives, housewives, teachers, shop owners, home decorators, and barber shop owners (a nickname for brothel owners)

Some interesting anecdotes regarding this scheme:

1. As Local houses were all sold out, the ring leaders went to Shanghai, Nanjing, and Jiangyin to “flip flop” real estate(Buy and sell real estate in less than 1 months in order to make a quick profit)

2 One ring leaders has 19 residence estate all over china, with total value of 20 million

3 Expensive cars roaming the street

4 Gold purchases

5 local Gambling, drug, prostitute flourish.

6. The bidding procedure for “Mark Organization meeting”:

“Mark Organization Meeting” is basically an auction. During the meeting, the participating bidders will compete by promising high interest rates. The final winner is the man who offers the highest interest rate. He then will use the collected funds to speculate in the real estate market, or lend the money to real estate developers, home buyers and basically anyone in need for a loan. One everything works out, the local get their money back with the promised interest…

This a link to an audio of a recoding made of such an auction.

You can read more (with the use of google translate) at this link of a local Huang Qiao Internet chat room that as a ponzi scheme topic. Please notice that news coverage is strictly controlled and censored, so not everything that is quoted in this article will appear in the forum.
You can read even more at this Huang Qiao Local forum. Many posts have been deleted, but even from what is left there is evidence of , local riots and gathering, demanding government help.

From this thread, that was written in Feb 2010, it is clear that some residents were worried for a while. It asks the government to crack down on the loan sharks, but apparently no action was taken. To understand how pervasive these shark loan schemes are in Huang Qiao, please read this local internet BBS forum poll, were 44 reported that they participated in the ponzi schemes by themselves. The pool mentioned that only those who directly participated in the “ Mark Organization Meeting” by themselves shall say yes, if only relative and family member participate, they shall count as no.

Big Danger of Civil Unrest

The first sign was a murder in “Tai Xing” ( Huangqiao is a town of Tai Xing city, the murder’s home town). Apperantly, the owner of the Kindergarden were massacre occoured participated in a ponzi scheme.
The locals in this province are outraged and they are trying to organize protests and riots against the government and the ring leaders of the ponzi schemes. Many posts in the forums are attempts by locals to organize demonstrations. Since the internet is heavily censored in China, many victims of the schemes are posting these letters on every street corner in the town. They demand that the government will take action, and that the ring leaders will be put in jail. They of course demand their money back as well…
The ring leaders are trying to calm things downs, by handing out letters to local residents and posting them on street corners.

Bellow you can see the letters that were written by the residents and the ring leaders.

As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest HQ local post3 As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest HQ local post5 As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest HQ local post1As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest HQ local post4 As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest HQ local post2

The local government fears civil unrest, and has posted this warning on every street corner.

As Ponzi Schemes Collapse the Chinese Government Fears Civil Unrest china government

A translation of the letter:

To the residents of Huang Qiao

Currently, the collapse of the fund chain has become a hot topic of all over town. A small minority of people with the intention of trying to disturb social stability, are stirring up the water, and are using the governments name to start rumors in order achieve personal benefits. In order to clarify the truth, the town government issues this open letter:

1. Huang Qiao Shark Loan ( Mark Organization Meeting” ) is a private matter, it is illegal, and the interest is not protected by law

2. People who participate need to expect to lose money.

3. All Mark Organization Meetings will be closed and all the debts will be settled peacefully, by negotiation, in order to minimize the loss.

4. The police will get involved in certain Mark Organization meeting, when the ring leaders are reluctant to pay

5. The public security agency will harshly punish those who are trying to stir up social unrest, spread rumors, cause “muddy water”, and make trouble for the government and social stability.

To get updates on China’s Shark Loan Ponzi Finance please FOLLOW US.

For more articles on the subject please visit China Shark Loan.

Related Posts with Thumbnails

Posted in Finance & Economics, Internet, Politics.

Tagged with , , , .

0 Responses

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.

Some HTML is OK

or, reply to this post via trackback.

Support #altnews & keep Dark Politricks alive

Remember I told you over 5 years ago that they would be trying to shut down sites and YouTube channels that are not promoting the "Official" view. Well it's all happening now big time. Peoples Channels get no money from YouTube any more and Google is being fishy with their AdSense giving money for some clicks but not others. The time is here, it's not "Obama's Internet Cut Off Switch" it's "Trumps Sell Everyones Internet Dirty Laundry Garage Sale". This site must be on some list at GCHQ/NSA as my AdSense revenue which I rely on has gone down by a third. Either people are not helping out by visiting sponsors sanymore or I am being blackballed like many YouTube sites.

It's not just Google/YouTube defunding altenative chanels (mine was shut), but Facebook is also removing content, shutting pages, profiles and groups and removing funds from #altnews that way as well. I was recently kicked off FB and had a page "unpublished" with no reason given. If you don't know already all Facebooks Private Messages and Secret Groups are still analysed and checked for words related to drugs, sex, war etc against their own TOS. Personally I know there are undercover Irish police moving from group to group cloning peoples accounts and getting people booted. Worse than that I know some people in prison now for the content they had on their "secret private group". Use Telegrams secret chat mode to chat on, or if you prefer Wickr. If you really need to, buy a dumb phone with nothing for the NSA/GCHQ to hack into. Ensure it has no GPS tracking on it and that the battery can be removed. These are usually built for old people to get used to technology storing only a set of numbers to call. However they have no games, applications to install or other ways people can exploit the computer tracking device you carry round with you most of the day - your smart phone. If you are paranoid ensure that you can remove the battery when travelling around and do so to prevent GPS tracking or phone mast triangulation. Even with your phone in Flight mode or turned off, it can be turned on remotely and any features like front or back cameras, microphones and keylogging software can be installed to trace you.

So if your not supporting this site already which brings you news from the Left to the Right (really the same war mongering rubbish) then I could REALLY do with some..

Even if it's just £5 or tick the monthly subscription box and throw a few pound my way each month, it will be much appreciated. Read on to find out why.


Any support to keep this site would be appreciated. You could set up a monthly subscription for £2 like some people do or you could pay a one off donation as a gift.
I am not asking you to pay me for other people's articles, this is a clearing house as well as place to put my own views out into the world. I am asking for help to write more articles like my recent false flag gas attack to get WWIII started in Syria, and Trump away from Putin. Hopefully a few missiles won't mean a WikiLeaks release of that infamous video Trump apparently made in a Russian bedroom with Prostitutes. Also please note that this article was written just an hour after the papers came out, and I always come back and update them.

If you want to read JUST my own articles then use the top menu I have written hundreds of articles for this site and I host numerous amounts of material that has seen me the victim of hacks, DOS plus I have been kicked off multiple hosting companies, free blogging sites, and I have even had threats to cease and desist from the US armed forces. Therefore I have to pay for my own server which is NOT cheap. The more people who read these article on this site the more it costs me so some support would be much appreciated.

I have backups of removed reports shown, then taken down after pressure, that show collusion between nations and the media. I have the full redacted 28/29 pages from the 9.11 commission on the site which seems to have been forgotten about as we help Saudi Arabia bomb Yemeni kids hiding in the rubble with white phosphorus, an illegal weaapon. One that the Israeli's even used when they bombed the UN compound in Gaza during Operation Cast Lead. We complain about Syrian troops (US Controlled ISIS) using chemical weapons to kill "beautiful babies". I suppose all those babies we kill in Iraq, Yemen, Somalia and Syria are just not beautiful enough for Trumps beautiful baby ratio. Plus we kill about 100 times as many as ISIS or the Syrian army have managed by a factor of about 1000 to 1.

I also have a backup of the FOX News series that looked into Israeli connections to 9.11. Obviously FOX removed that as soon as AIPAC, ADL and the rest of the Hasbra brigade protested.

I also have a copy of the the original Liberal Democrats Freedom Bill which was quickly and quietly removed from their site once they enacted and replaced with some watered down rubbish instead once they got into power. No change to police tactics, protesting or our unfair extradition treaty with the USA but we did get a stop to being clamped on private land instead of the mny great ideas in the original.

So ANY support to keep this site running would be much appreciated! I don't have much money after leaving my job and it is a choice between shutting the server or selling the domain or paying a lot of money just so I can show this material.

Material like the FSB Bombings that put Putin in power or the Google no 1 spot when you search for protecting yourself from UK Police with "how to give a no comment interview". If you see any adverts that interest you then please visit them as it helps me without you even needing to give me any money. A few clicks per visit is all it takes to help keep the servers running and tag any tweets with alternative news from the mainstream with the #altnews hashtag I created to keep it alive!

However if you don't want to use the very obvious and cost free ways (to you) to help the site and keep me writing for it then please consider making a small donation. Especially if you have a few quid sitting in your PayPal account doing nothing useful. Why not do a monthly subscription for less money instead. Will you really notice £5 a month?