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There is a lot of news out today about Evergrande, the large Chinese property developer, not being able to meet some of its debt obligations today.

The experts and analysts are then saying that such a large default will send shockwaves throughout the financial system and is also partially responsible for the fall in the markets today.

So first things first. Yes, this is quite a shit show. They have $300 billion in commercial paper that they're unable to payoff or at least not on the terms that that they borrowed at.

So what will happen? There are two possibilities. The authorities step in and re-negotiate the terms or Evergrande defaults and investors walk away with nothing.

The second scenario is obviously worse and would have ripples across many different markets. For crypto, since Tether holds commercial paper, some of it could be tied up in Evergrande debt although we don't know how much.

While it may cause a ripple, if there's any lesson to be learnt from the '08 crash, it is that asset prices will only go up in nominal terms because politicians and central bankers are no longer tied to anything physical like gold.

The 1929 depression would never have happened if bankers were not tied to the gold standard because they would just print money to reflate assets. Of course, the value of those assets remains the same, only the price differs.