Smokers and drinkers are topping up bank capital! Moutai acquires stake in Bank of Guizhou to take over 10 rural banks! One bottle of Moutai supports 15,000 in LGFV loans! Deposit insurance only covers 3%! Tobacco tax share is the same as the Soviet Union before prohibition! The greediest nest fills the leakiest hole! The regime cannot quit its addiction to sin taxes!

Bank of Guizhou announced on the Hong Kong Stock Exchange that it will take over the deposits of ten rural banks, dissolve them in place, and package their assets into trusts. Kweichow Moutai Group previously issued a letter of intent to subscribe for new shares in Bank of Guizhou. Tobacco-related funds and the profits of local liquor enterprises are being used on a large scale to supplement the capital of major banks and local small and medium-sized banks, and to fill the debt holes of local government financing vehicles (LGFVs). This reflects the dilemma that local finances are addicted to and sustained by sin taxes, as well as systemic financial risks.

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Observe things as they are and reject fragmented understanding. Yesterday, I saw a particularly ridiculous announcement that also requires everyone's attention. Who issued this announcement? Ah, it was issued by the Bank of Guizhou on the Hong Kong Stock Exchange. What did this announcement say? It said that in this place called Guizhou, ten rural banks will have their deposits entirely taken over by the Bank of Guizhou, while the original entities of those rural banks are dissolved on the spot. Their original assets were also packaged into trusts. Then five days prior, there was another matter: on October 28, Moutai Group issued a letter of intent to the Bank of Guizhou to subscribe for no more than 619 million new shares. These two announcements were issued back-to-back. There is another matter, I don't know if anyone noticed: when the Chinese Communist Party recently injected core capital into the major banks, who provided a portion of the funds? Does everyone still remember? China Tobacco, does everyone remember this? The first time, China Tobacco took out 20 billion; the second time, it took out 60 billion. What are all these? They are addictive liquidity. And their structures are also the same. After these major banks take the core capital, they turn around and continue to buy government bonds. Moutai subscribes to the Bank of Guizhou, and what did the Bank of Guizhou go to do? It went to dissolve the rural banks in Guizhou. I have talked about this matter with everyone before: essentially, it is to cover up the bad assets of the government. Where did the bad assets go? Who the fuck knows, they went into the trusts, didn't they? That is why I call this thing addictive liquidity. Furthermore, these two events are not two separate events; they are a single event, just one involving tobacco and the other involving alcohol. Look at the characteristics of tobacco and alcohol: their demand elasticity is extremely low. Tobacco is still a state monopoly, and the geographical indication for alcohol is still controlled. The gross profit margins of both things are ridiculously high, and this profit can be mobilized with a single administrative decree. Now, this cash flow is being used to fill the capital reserves of these banks. Come on, today let's look at this ledger, and first make clear who took whose equity. The money from the tobacco line is all flowing upward. In the 120 billion private placement of Communications Bank last June, China Tobacco Corporation alone shelled out 4.58 billion. In the 360 billion capital injection plan last September, the tobacco faction gave another 30 billion to Industrial and Commercial Bank and 30 billion to Agricultural Bank. The two rounds totaled 67.58 billion, and all this money went into the major banks. Is this an exception? Not at all. For instance, the tobacco faction's stake in Industrial Bank is about 9.7%. And then there is Yunnan Hongta Bank—just listen to the name and you can tell what is going on. In this bank alone, the three shareholders belonging to the tobacco faction together hold 48.3% of the shares. However, the alcohol enterprise line is the exact opposite: not a single cent of their money leaves the province. Moutai Group already held a 12% stake in the Bank of Guizhou, and after this subscription, it increased to 13.54%. But the Bank of Guizhou is not the only financial equity held by Kweichow Moutai; Moutai also holds a 49% stake in Huagui Life Insurance and a 9.5% stake in Guizhou Rural Commercial United Bank. Wuliangye—ah, Wuliangye is the same. Wuliangye Group holds a 17% stake in Yibin Bank and a 5.5% stake in Sichuan Bank. Luzhou Laojiao Group is the largest shareholder of Luzhou Bank, accounting for about 16%. Ah, has everyone noticed? Tobacco money is fed to the central major banks, while alcohol enterprise money is fed to the small local banks. Is this division of labor still a coincidence? This is completely no coincidence at all! This is a financial version of "whoever's child it is should carry them away." Did the entry of alcohol enterprises systematically occur after fiscal funding dried up? Let me lay out Guizhou's experimental line for everyone. On December 30, 2022, Zunyi Daoqiao, the largest urban investment white glove under the Zunyi government, rolled over 15.6 billion in bank loans for 20 years. This was the first shot fired for national urban investment rollovers. Then, Document No. 35 on September 30, 2023, classified Guizhou among the 12 key provinces. Last year, the province-wide land sale revenue in Guizhou plummeted directly from 174.9 billion to 100.8 billion, a year-on-year slash of 42.5%. Then, last December, Moutai Group contributed 1 billion to top up Guizhou Rural Commercial United Bank and injected another 615 million in capital increase into Huagui Life Insurance. In January and August of this year, the Bank of Guizhou used trust income rights that were as thin as air to take over what? It took over the deposits of two rural banks: Longli Guofeng and Panzhou Wanhe. Then on September 18 of this year, the board of directors of the Bank of Guizhou passed the plan to issue new shares, followed closely on October 28 by Moutai issuing this letter of intent. Then on October 3, ah, the remaining ten banks were wiped out in one fell swoop. You see, the timing of Moutai's entry is stuck right after the land revenue was cut in half, which is also the final deadline of Document No. 35—before that expiration next June. This is the ultimate deadline for urban investment debt, as everyone can see.

This entire timeline is completely seamless, and it is not the first time the Moutai Group has provided a blood transfusion to the Guizhou provincial treasury. In December 2019, the Moutai Group transferred 4% of its equity in Kweichow Moutai to the Guizhou State-owned Assets Supervision and Administration Commission for free. Then, in November 2020, the Moutai Group issued 15 billion yuan in corporate bonds. What was 8.6 billion of that used for? To buy equity in Guizhou Expressway, and the remaining 6.1 billion was used to pay off debts for Guizhou Expressway. At that time, Guizhou Expressway's total debt had already exceeded 290 billion yuan. So, do you see it now? The Moutai Group has long ceased to be just the parent company of a liquor enterprise; it is the second account for the Guizhou provincial treasury. How much money is in that account? Kweichow Moutai paid a total of 56.8 billion yuan in taxes last year. How exaggerated is this 56.8 billion? Nominally, it is equivalent to 86% of the fiscal revenue of the entire province of Guizhou. In other words, one liquor enterprise accounts for nearly 90% of a province's fiscal revenue. Because the fiscal revenue of Guizhou province is only around 60 billion yuan, what Guizhou really holds in its hands is the dividends from Moutai. Kweichow Moutai paid out 65 billion yuan in dividends last year, and the Moutai Group, holding 54.4% of the shares, took away 35.4 billion yuan directly. Meanwhile, the total money turned over by all state-owned enterprises under the province in a year? The total profit was only 16.27 billion yuan. Therefore, the only trump card the whole province has to pull out cash to put out a fire is this one.

Let's look at these ten village and township banks. The announcement provided ten names and the shareholding ratio of Guizhou Bank, but that's just a number—the total registered capital is 1.952 billion. And then, there is nothing else. Data such as the total assets of each bank, non-performing loan ratios, deposits taken over, trust trustees, and the layering of income rights—none of these items were disclosed. So, we can only analyze the tactics by looking at the first two pilot cases. These two are the Longli Gefeng and Panzhou Wanhe mentioned earlier. When they were taken over, the principal and interest of their deposits were 1.913 billion and 1.784 billion respectively. The method was exactly the same: dump all the old assets of the village and township banks into a trust, and have Guizhou Bank take over all the deposits. However, they didn't receive a single cent in cash. What did they use to offset the debt? They used over 1.8 billion in trust shares to offset it—in other words, they used thin air to offset the debt, because who the fuck knows what assets are actually inside that trust?

What's even more absurd is that the announcement explicitly states that this trust has no maturity date and no guarantee for covering the shortfall. If other creditors happen to win a lawsuit halfway through and demand their share, Guizhou Bank's stake will directly shrink. What does this mean? It means that while Guizhou Bank nominally covers all the depositors' money, what it gets in return is not cash, but a trust income certificate. How much is this certificate worth? I don't know, because there's no data. We have to wait until the trust is liquidated to find out. But when will this trust be liquidated? There is no time frame. Estimating based on the scale of 1.7 to 1.8 billion for each of these two, I estimate the total deposits for all ten banks are between 15 billion and 30 billion.

Now, here is the interesting part: how is this closed loop actually recorded in the books? Let's break it down step by step. For example, suppose you go buy a bottle of Feitian Moutai. The distributor pays Guizhou Moutai 1,269 yuan according to the contract price. Moutai records this as operating revenue, and then Guizhou Moutai distributes the profit to the Moutai Group. Last year's total dividend was 65 billion, and multiplying that by its shareholding, which is 54.4%, the parent company, Moutai Group, received about 35 billion in dividends. This is recorded as investment income. Moutai Group then takes 619 million to subscribe to new shares of Guizhou Bank. After the capital injection, Guizhou Bank's share capital and capital surplus—the core Tier 1 capital—increased by 619 million. The regulatory bottom line for core Tier 1 capital is 7.5%, so 619 million divided by 7.5% equals 8.25 billion. This is the amount of additional loans Guizhou Bank can issue after supplementing its capital. Who does it lend to? As of the end of June this year, Guizhou Bank's loans for leasing and commercial services totaled 118 billion, accounting for 30% of its total loans. But those in the know understand what this industry is—isn't it just a shell for local government financing vehicles (LGFVs)? And what do the LGFVs do with the new loans? They pay off old loans. The ratio of Guizhou's debt-issuing LGFVs using new loans to pay off old ones is as high as 92%; basically, not a single cent is left over. According to the risk classification for such extended loans under Document No. 35 and Document No. 134, the risk rating can be temporarily downgraded. Until when? Until next June. In other words, during this period, Guizhou Bank's non-performing loans on the books are frozen. Capital is not consumed. Then, at the end of the year, Guizhou Bank will pay a dividend of 0.06 yuan per share. Based on the subscription price of 1 yuan, the dividend yield is 6%. This money flows back to Moutai Group, and Moutai Group then pays the state-owned capital gains to the provincial treasury. After this whole cycle, the same 1 yuan of cash is recorded five times in the books: once in retail sales, once in Moutai's revenue, once in the provincial treasury's comprehensive capacity, and finally, once each in the bank's capital and the LGFVs' long-term debt funds. Furthermore, the bank's lending funds alone have been leveraged 13.3 times. It's like you spent 1 yuan to buy liquor, and they managed to conjure up 17 yuan in scale on their books.

How did they bypass the regulatory red line? According to the rule of "two participations and one control," Moutai already held 12% of Guizhou Bank and 9.5% of Guizhou Rural Commercial Union Bank, hitting the upper limit for equity participation. Therefore, they had no choice but to keep filling this old pit. As for the requirement that equity investment must use self-owned funds, Moutai certainly had the money. How did Moutai handle this rule? Last September, Moutai used its left hand to borrow a special loan of 2.7 billion from the Agricultural Bank of China to defend its own stock price, while using its right hand to subscribe to bank shares with its own-raised funds. Fucking awesome, right? Let's look at the five-year lock-up period. If the trust were to be liquidated, it would take at least three to five years, and debt collection would take eight years. This five-year lock-up period simply delays and covers up the time when the thunder explodes and losses have to be recognized. But where is the real big backdoor hidden? It is hidden in Article 65 of the Administrative Measures for Related-Party Transactions. What is this? This is an exemption the Chinese Communist Party created for itself to run a legal trust. How does it stipulate? It says that mergers and acquisitions between state-controlled enterprises are not considered related parties. What does that mean? It means the Department of Finance holds 20% of Guizhou Bank's shares, but since they are fucking government organs, they are not considered related parties. Moreover, provincial-level urban investment companies and Guizhou Bank, even though they are all managed by the provincial government, are also not considered related parties. The master switch rule—stating that related credit extension cannot exceed 50% of the total net assets—is completely fucking bullshit to them, just a piece of decoration. The Hong Kong Stock Exchange is even more fucking hilarious. Moutai holding more than 10% of the shares makes them a related party, so these fucking pricks had to put on a show and abstain from voting at the shareholders' meeting on November 18. Who the fuck are they acting for? Fuck, didn't the Department of Finance's 20% votes still get cast? Fucking 69% of the shares in the room are wearing the same pair of pants, these are all fucking oil-blocking shares, and you could pass it with your fucking toes, so these people don't need to step on the red line at all. Article 65 directly whitewashes this dirty business. What is the provincial government doing here? Well, passing money from the left hand to the right hand. In their words, they are two independent legal entities. Red lines are meant to tie down ordinary people, while their own dog hole was fucking opened long ago.

So what on earth was Moutai's 619 million used for? Let's look at the data. Guizhou Bank's core tier-one capital adequacy ratio plummeted directly from 12.24% at the end of 2024 to 10.94% at the end of June this year. This is public data; as for the actual situation, only fucking heaven knows. Calculated by par value, this overall issuance intends to raise 2.9 billion, which can boost Guizhou Bank's core tier-one capital back by 0.6 to 0.7 percentage points. Moutai's 619 million only contributed 0.14 percentage points. But if the bad debts of those 10 rural banks and Sanjin Trust are to be calculated by looking through the risks according to the rules, conservatively taking the median deposit of 20 billion, and assuming loans account for 70%, it would consume 1.5 billion of core tier-one capital. Moutai's 619 million can't even fucking cover 40% of it. Therefore, this money is not for Guizhou Bank to issue more loans; what is it for? It is entirely used to pad the buffer for deferring the losses of rural banks. Some people might ask, why not take the deposit insurance route?

The Deposit Insurance Regulations state very clearly that in cases of takeover, revocation, or bankruptcy acceptance, compensation must be paid within seven working days. Guizhou simply refuses to follow this path. Why? We only need to look at the deposit insurance fund balance disclosed by the People's Bank of China to understand. From 2020 to 2023, the total funds of this insurance fund hovered between 55 billion and 105 billion yuan. Meanwhile, I estimate the total deposits of rural banks nationwide to be between 1.8 trillion and 2.2 trillion yuan. Moutai, you're so fucking awesome, why don't you swallow all ten of them at once? Isn't it because you can't swallow them all? The deposit insurance coverage of the Chinese Communist Party can only reach about 3 to 5 percent. This little bit of money might barely be enough to compensate one bank, let alone an entire province. What's more? If you follow the regulations, the word bankruptcy must appear, whereas if you take the path of dissolution plus trust, the announcement only needs to use institutional exit and succession, which sounds a bit more decent, right? What's even more ruthless? The trust postpones the confirmation of losses to the liquidation date, which allows the current non-performing rate and uncovered portions to remain completely motionless. This is accounting. I share this method so everyone knows it has no other meaning. After learning it, modify it a bit and go fool the tax bureaus of the Chinese Communist Party. Come on, let's deceive each other. Squeezing juice from an iron pipe, you fool me and I fool you. It is said that there are currently 962 rural banks remaining nationwide. If this template is copied, the deposit insurance fund will be fucking useless. Let's talk about pricing again. In late October, Guizhou Bank's H-shares were 0.94 Hong Kong dollars, which translates to about 0.81 RMB. At what par value did Moutai subscribe? It subscribed at one yuan per share, which means it was about 23 percent higher than the market price. Multiply this premium part by 619 million shares, and that's about 120 million yuan. This is the explicit part of a one-time transfer payment. You can buy H-shares on the Hong Kong stock exchange that can be sold at any time, with this price and these conditions. Yet Moutai refuses to buy them, and instead fucking insists on buying domestic shares that carry a 23 percent higher premium and cannot be touched for five years. See that? This choice itself is a fiscal action, completely not an investment. Okay, the closed loop is clear. Is this upstream cash flow sufficient? Large-scale baijiu production dropped from 13.58 million kiloliters in 2016 to 3.55 million kiloliters last year, a drop of more than 70 percent in ten years. The revenue of nineteen listed baijiu companies in the first three quarters of this year was 260.9 billion yuan, a year-on-year decrease of 7.4 percent. The wholesale price of Feitian Moutai dropped from 2,220 yuan at the beginning of last year to 1,485 yuan last December, rose back a bit to 1,690 yuan on October 4 this year. Where is the most ruthless figure? In contract liabilities. Guizhou Moutai's contract liabilities—meaning the advance payments made by distributors—were 8 billion yuan at the end of last year, and plummeted to only about 2.1 billion yuan by the end of September this year, a 74 percent drawdown in nine months. Under what conditions do distributors stop placing orders and paying? Let's do the math, and it becomes clear. The delivery price of 1,260-something plus rent and interest puts the breakeven line between 1,450 and 1,550 yuan. Once it falls below this figure, selling a bottle means losing money on a bottle. Last December it crashed to 1,485 yuan, already stepping over the life-and-death line once. However, to put it bluntly, the Moutai Group still receives 35.4 billion yuan in dividends a year, and the subscription cost is less than 620 million. Even if dividends were cut by 98 percent, it could easily afford this money. Therefore, the breakpoint of Guizhou's closed loop is not where Moutai's cash is. Where is it? It is that the bad debts of the rural banks will devour the principal of Guizhou Bank, and Moutai's money is merely being passed over to act as a cushion. Because Guizhou Bank itself is fucking unable to protect even itself. Now let's think another layer higher: who paid for this upstream buffer money? Smokers and drinkers paid for it, right? This leads to an even more fucking malicious question: how the fuck can a regime be so fucking shameless? On the one hand, it preaches bullshit like Healthy China 2030, and even fucking brags about suppressing the smoking rate to 20 percent! While shouting slogans telling you to quit smoking, on the other hand, it takes the money from cigarettes and alcohol to supplement the capital of banks. What is this? This is the finance system itself getting addicted to drugs, and it simply dares not let you actually quit.

What would happen to a regime that lives off addiction taxes if the public actually quit smoking and drinking? There are two ready-made examples in history. Who was the first? Well, it was Tsarist Russia. At that time, the Tsarist government's revenue from the state liquor monopoly accounted for 26.4% of the national budget in 1913, which was nearly 900 million rubles. Then, in August 1914, they began a total mobilization for prohibition, and the actual revenue from the monopoly fell to only 504 million rubles, a cut of 44%. Total revenue dropped by 15.2% overnight. By the end of 1916, liquor revenue accounted for only 1.5% of the budget. How did they fill the gap? By printing money. The proportion of money issuance in national expenditure reached 20% in 1916 and went straight to 42.9% in 1917. The Tsarist government printed 7.6 billion rubles in 32 months, and then there was no Tsar. The second example is its successor, the Soviet Union. The liquor turnover tax reached 36.4 billion rubles in 1984, accounting for exactly 9.7% of the budget revenue. Then, in May 1985, Gorbachev launched an anti-alcoholism campaign. The share of liquor tax fell to 6.5% in two years, equivalent to a cumulative loss of 36 billion rubles. Don't think this is a small amount; it was basically on the same order of magnitude as the 40 billion ruble loss from oil prices the Soviet Union suffered during the same period. After losing these two sources of income, the budget deficit soared from less than 8 billion rubles to 100 billion rubles by 1988. At that time, the Soviet Union's internal debt as a percentage of GDP surged from 18.2% to nearly 50%. Then, in October 1988, the Soviet Union abandoned the campaign. The Soviet Union only fucking held on for three and a half years. The reason it couldn't hold on wasn't because of public opinion, but because of the budget. However, after giving it up, the revenue didn't return because the moonshine market had already carved up the entire market. After that, it was the events of 1991, which everyone knows. Although no one in academia says that prohibition alone killed these two regimes, no one denies that it was one of the important reasons. If we put China on this historical coordinate, where is the CCP now? Well, let's look at the data. Tobacco contributes 1.58 trillion yuan to the treasury every year, accounting for about 9% of last year's national tax revenue of 17.6 trillion yuan, which is almost exactly the same as the 9.7% in the Soviet Union in 1984. The only difference is what? The CCP is faking it. There are fewer people smoking now, but they are shameless; they have raised cigarette prices, fucking increased tax rates, and kept pushing the money collected higher and higher. Look, whether it's cigarettes or alcohol, have they controlled it? Not at all! So the CCP will definitely squeeze the cash flow of this industry until it hits its own ceiling. The Tsar, no matter what, would rather lose money himself than let the public drink. The CCP has fucking lost 120% of its conscience. Not only does it not promote quitting smoking, but it also puts pressure on smokers by raising fucking cigarette prices, and what do they raise? It's all cheap cigarettes, the staple cigarettes for the common people. However, I see that the anti-smoking campaign is still going on, and this is not the most disgusting part; the most disgusting part is yet to come. The life-saving money used to fill the hole is all handed over to the two biggest nests of vermin in China, which are also the most corrupt, the CCP's fucking State Tobacco Monopoly Administration. In less than ten years, seven deputy directors have been investigated. He Zehua alone took 943 million yuan in bribes, but he was only sentenced to death with a reprieve. Former director Lin Chengxing was sentenced to 16 years, and Zhao Hongshun to life imprisonment. Since 2018, 23 executives from the Moutai Group have been investigated. Chairmen go in like a revolving door, including the former chairman Yuan Runguo, who was later sentenced to life imprisonment, and his successor Gao Weidong also got life. Then Ding Xiongjun was also arrested in May this year. None of the three previous chairmen escaped. Wuliangye Group's two consecutive chairmen, Li Shuguang and Zhong Chengxin, were investigated one after another within a year. Guizhou Bank is even more direct; former chairman Li Zhiming was sentenced to 16 years and 6 months in December last year, and former president Xu An was sentenced to death with a reprieve in March this year. Let's make a horizontal comparison. This year, a total of 211 cadres from central-level agencies, party-owned enterprises, and financial units were investigated, but that is the total for hundreds of central-managed enterprises plus ministries and commissions. Yet China Tobacco caught seven of them in nine years, and Moutai, a single enterprise, caught 23 people in eight years. You can judge the density for yourselves.

So, who is signing off on this proposal now? Hey, look at how interesting it is that it's signed right here on the table! Yang Hongjun, Chairman of Bank of Guizhou, was only shoved in by the provincial government this June; he's a new official who was only approved in October. His partner, the bank president, is Wu Fan. Chen Hua, the Chairman of Moutai, was also rushed over from the Energy Bureau last October to put out the fire. His predecessor, Zhang Deqin, had only been there for a year and a half—fucking hell, he hadn't even warmed his seat before he was replaced. What's even funnier is that Chen Duohang, the director stationed at Bank of Guizhou by Moutai, is required by the rules to recuse himself from voting. So, if things blow up in the future, who is going to take the blame? Hey, if you calculate the timeline, you'll understand. The liquidation period for that trust is three to five years, and the collection process takes over eight years. A term for the Chairman of Bank of Guizhou, based on the previous one, is only five years. The person signing this in November of this year will most likely be long gone by the time the losses are confirmed—fucking hell, I reckon the CCP might not even exist by then. In accounting, this is called loss deferral; in personnel terms, it's called pushing the bill for confirming losses onto the next person who signs. Isn't this just a classic 'cicada shedding its skin' trick? So, this is the result of placing these two timeframes side by side.

People might be thinking, 'Hey, after the peak of the tobacco and alcohol craze, what will be the next thing to be requisitioned?' What is the next thing that is both requisitioned and addictive? What did I think of immediately? Lotteries. Let's look at the data. You don't know until you check, and when you do, it's actually quite shocking. This CCP-themed piece of shit—does anyone actually fucking buy it? To be honest, I'd rather play that game run by the old man scamming people on the street in the Northeast—you know, the one where the center pole is super high and the prizes look great—I wouldn't even touch the Chinese lottery. Back to the point, lottery sales last year were 628 billion, an increase of only 0.7%. From January to May this year, it cumulatively dropped by 4.7%. Sales from January to September were 545.8 billion; it looks like a 14.6% increase, but that was entirely propped up by the excitement of the World Cup starting in June. Everything else is down. Welfare lottery sales dropped by 7.3%, scratch-offs dropped by 8.7%, and lotto games dropped by 3.8%. The base is shrinking. Furthermore, even if the money is collected, it can't be moved. Last year, 162.1 billion in lottery public welfare funds—the central government has a strict rule that 60% must go where? Into social security. 42% of the fiscal appropriations received by the social security fund over the years, over 510 billion, relies entirely on this lottery money. The pension hole is much bigger than the bank one, so it's not that no one is moving this money; it's that the hole this money is responsible for is even more fucking huge. More importantly, the lottery doesn't have a corporate shell. Tobacco at least has the China Tobacco Corporation, and white liquor has the Moutai Group; they can still use the name of the entity to hold shares. Lottery money goes directly into a special fiscal account. If it were to go into a bank, the Ministry of Finance would have to inject capital directly, which would just lead back to the old path of injecting capital into major banks. That's why I say the lottery can't take over for tobacco and alcohol at all; it doesn't even qualify to sit at the table, because there isn't enough to go around as it is. Although nearly 40% of people buying sports lottery tickets domestically are young people in their twenties who can't find jobs—well, that's understandable—they all treat these scratch-offs as a tool for a financial turnaround. But even if you squeezed these young people dry, the proportion of lottery revenue to national fiscal revenue is only 0.7%. To put it bluntly, the lottery is at most a small patch for social security; it can't carry the weight of the entire fiscal system.

Having reached this point, the Chinese Communist Party (CCP) actually has only three paths left to take. What is the first one? Ah, walking the old road, continuing to play dumb, pulling this fake quit-smoking and fake quit-drinking stunt, continuing to let Kweichow Moutai subscribe to these shares at face value, and then shoving all the bad debts of those ten village and township banks into a trust, hanging them up for three to five years, or dragging them out for ten to eight years if that doesn't work, slowly grinding it down with the thin padding on the balance sheet of the Bank of Guizhou. Once a year or two passes and the hole is covered up again, isn't it just a matter of dragging Moutai over to bleed a second round? Look at everyone, the first three times Moutai was called upon to shell out money, ah, hasn't the interval between them been getting shorter and shorter? This is boiling a frog in warm water, until Moutai is completely sucked dry. What is the second road? It is that once the debt-resolution grace period passes next June, these bad debts in the cities can no longer be hidden at all. Once they cannot be hidden, the capital reserves of the banks will definitely be breached. Relying solely on one Moutai, or even ten Moutais, is not enough to cover it. If it comes to this step, what can the provincial government do? Drag out every rural commercial bank, insurance company, and so on to chip in and be buried along with it. The third road, which is the most likely one, is to announce a personnel change to inject fresh blood and then continue to buy time for you. If next June they really fucking wash their hands of it and don't care, meaning you aren't being practical, has the debt resolution been finished? Do you outside not acknowledge it anymore? Given the sheer volume of these bad debts among the urban elites of the CCP, if this volume fucking explodes centrally, the CCP and the banks alike will be blown sky-high together. Therefore, the third road is definitely to keep dragging it out. What shall we do? Let's see if the annual report of the Bank of Guizhou dares to make an impairment provision for this trust around next February and March? As long as it doesn't provision a single cent, it means they are hell-bent on faking the accounts to the end. Everyone can also pay attention to next January, ah, which is the ledger of the National Tobacco Work Conference. As long as the money turned in by the tobacco industry stops growing, what does it explain? It explains that even the wallets of the most steadfast smokers have already been squeezed dry. When all is said and trusts, a regime that survives on addiction taxes has already contracted an absolute, incurable drug addiction itself. The CCP can't quit, but the emptied wallets of smokers and drinkers will sooner or later force them to quit. Moreover, nowadays there is a huge crowd of people starting to consciously quit smoking and drinking, and I also advocate this lifestyle; let's live a bit healthier, keep our bodies healthy, keep our mental states healthy, and just watch the CCP go to hell. How great is that! Alright, that's all for the broadcast with everyone today. If you like my show, please click the free-order button below. If you want to support me, you can join the membership channel. The membership channel features four in-depth programs each, and you are welcome to join the gang of good people. See you in the next episode.