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The boom and bust of capitalism is pronounced and sometimes devastating if one looks through history.
The story of John Law, 1929, great financial crisis tells us we are dealing with a system inherently volatile that produces both good times and bad. For Asians we are reminded of the pain caused by Asian Crisis during which many rich men were reduced to paupers.
If you look at all these crisis they were caused by debt. Debt would build up during good times and hurt you during bad times.
For this reason, prognosticators of doom often pointed to the high debt levels in the Chinese economy as signs of its impending death. The Chinese economy crashed multiple times without prolonged pain defying predictions of its critics. One example was the stock and property crash o 2015 that to down the Chinese Market rapidly inviting predictions of doom. 4yrs later the economy came back singing and dancing with property property prices at new highs. So what's the secret?
In the West, the government avoids moral hazard aka using tax payers money to bail out debt ridden companies. Remember Lehman Brothers? Bush was told if he did not bail them out the economy would collapse and collapse it did.
In China such bailouts are so routine the govt has 3 banks specialising in buying bad debts to bail out companies. One of them known as Huarong became so corrupt the CEO was executed. Without these bailouts, the sector can go into free fall like the property sector. It is a mistake to think tye Chinese government is not in full control of the situation. It is a deliberate effort to shrink the other sector and get rid of many debt ridden developers. When the government is happy with the cleanup, it will step in to put a floor to the downside.
The 2nd secret the Chinese use currency control. This create a duality that gives it flexibility to tackle internal economic crisis without restraints of a freely traded currency. For trade, the US Dollar dominates. This allows them to print as much Yuan as they want without bringing down the dollar Yuan exchange rate. Its an important tool they can use when the time comes.
Forecasting the Chinese economy using a normal template often gets you the wrong prediction.
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.
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(This post was last modified: 10-08-2022, 08:54 AM by
sgbuffett.)
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In the West, the government avoids moral hazard aka using tax payers money to bail out debt ridden companies.
In the West, they print money and made the whole world pay for it.
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America has been playing the same playbook ever since WW2. Print and print.
BRICS + other are fare up.
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All countries print money to save their economies. The Chinese have no exception. It printed even more than the US.
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aiya men with low iq always like to do those foolish things again and again. that infamous goondo ching chong chiang and his disciples are an example
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(10-08-2022, 06:04 AM)kokee Wrote: china economy definitely crashing hard, where are all the top rich in china today? jack ma, tencent or wang? all disappear from media totally! & their wealth almost gone a huge portion. who still talk about china rich these days? the more in media, they will gone forever faster in dictator & communism china today!
alibaba share price down from 300 to below 90 today, same to tencent from 800 to below 300 today, almost all china pcmpany shares game over, more down to come!
not all the top rich, middle rich & top down, all the same!
富豪們遭了!財富榜慘遭血洗!頂級富豪全部倒臺!腥風血雨!全部潰敗!資產縮水!產業崩盤!為了保命!夾著尾巴求生!
阿里網店執笠300萬間、再炒9000人
as above, china stock crash harder today, convincingly below 20k!
china property crash like crazy, RMB plunges, china bond defaulted, debt burst. cant hike rate due to gigantic debt, print also useless as no business, jobless surges, factories move out!
sgbuffet lick china stock due to he hold many, keep barking morons here to buy but he did not buy anything since early june till now, just wait for brainless to buy so that he can let go his china junk!
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(10-08-2022, 10:01 AM)teaserteam Wrote: All countries print money to save their economies. The Chinese have no exception. It printed even more than the US.
The true picture of USA :
M1 Money Supply Components
Here's a list of M1 components.
M1 consists of currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; plus
Demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; plus
Other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions.
The St. Louis Fed M1 Description also includes Traveler's checks, but the amount is tiny. The Traveler's Check series was discontinued in 2018 with the last value at a mere $1.7 billion.
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(10-08-2022, 10:34 AM)kokee Wrote: as above, china stock crash harder today, convincingly below 20k!
china property crash like crazy, RMB plunges, china bond defaulted, debt burst. cant hike rate due to gigantic debt, print also useless as no business, jobless surges, factories move out!
sgbuffet lick china stock due to he hold many, keep barking morons here to buy but he did not buy anything since early june till now, just wait for brainless to buy so that he can let go his china junk!
Everybody’s know you are moronic kokee king of lies bullshit and know nuts
Moronic kokee still preaching Falun Gong hor very evil and very dark one
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