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"Also: When you read the word 'Ponzi' in the context of macro-economics, as opposed to criminal prosecution, you should stop reading right then an there because
by rsync 11y ago
"Also: When you read the word 'Ponzi' in the context of macro-economics, as opposed to criminal prosecution, you should stop reading right then an there because the author is spouting drivel."
You know ... metaphor is a fairly powerful and useful tool ... I feel like maybe, it might be possible for someone, somewhere, to usefully and accurately draw a comparison between a macro-econ concept and a ponzi scheme ...
Call me crazy...
- Zigurd 11y agoI have to agree that calling it a Ponzi scheme is inaccurate and tendentious. China lacks transparency, and that's why they can get into a bad loan situation that US companies and banks can't. But it isn't a Ponzi scheme. Also, $1.2 trillion Yuan is about $200billion. N.B. the headline uses a dollar sign but the article denominates that number in Yuan.
- ScottBurson 11y agoNo, it says right in the second paragraph: 7.6 trillion yuan ($1.2 trillion) as being the amount of new debt forecast to have been issued in 2015. Later on it gives 1.2 trillion yuan as the amount of bad debt -- loans that are already non-performing.
- Gibbon1 11y agoI keep thinking that Bloomberg is trying to scare the readers with big numbers. 1.2 Trillion Yuan is about $188 billion. China's population is about 1.35 billion, China GDP is about $9.25 trillion. So non-performing loans are $188b/9240b = 0.0203 or 2% of GDP. This isn't anything the Central Banks can't deal with. The article is drivel.