Financial instruments, also known as “commercial paper” and “blank note”, are instruments that are not based on commodity transactions and are issued exclusively for the purpose of financing.
Financial instruments are unsecured and have no recourse to investors. Financial instruments also do not reflect real material turnover and are issued only for the purpose of obtaining funds.
Mr. Guo Wengui has repeatedly pointed out in live broadcasts that financial instruments are one of the means by which families of Chinese Communist Party kleptocrats use the power and monopoly they hold to rob the Chinese people of their wealth. The frauds of financial instruments eventually empty the people’s pockets and cause the bankruptcy of banks before triggering a financial storm.
The most important thing about financial instruments is the endorsement of the credibility of enterprises. However, in Communist China, this is a note from the person in power. The enterprise has credibility if the person in power says so. Under this situation, the enterprises in China are willing to collude with those in power by issuing so-called purchase contracts. Since the banks are also in the hands of the Chinese Communist kleptocratic families they will do whatever those kleptocrats ask. The consequence is that the party issuing the financial instruments first walks away with money and then defaults them by various means. The resulting financial losses borne by the banks causes them to increase the ratio of their bad debts, or even go bankrupt. And the ultimate loss is borne by the Lao-Bai-Xing, the old-hundred-names.