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China takes the precise opposite path to the US. While the US pumps trillions into private hands to keep private enterprise afloat, China spends an equal amount
by intopieces 6y ago
China takes the precise opposite path to the US. While the US pumps trillions into private hands to keep private enterprise afloat, China spends an equal amount on infrastructure, largely financed through debt. This is a smart move because your countries economy could collapse but the nation's financiers aren't able to repossess poured concrete, AI knowledge or wireless access points.
- raducu 6y agoThe problem never was repossessing debt. Fiat money, unlike gold, is all about direct resource allocation. Pouring trillions in bad corpoarate debt is just as bad as pouring trillions in inflating the housing market -- resources are poorly allocated and capital markets are bypassed. Bad debt is bad debt, it is equally destructive in the end.
- oillio 6y agoYou would be surprised as to how creative the repo man can get ;)
- OnlineCourage 6y agoConcrete has poor liquidity though both literally and figuratively so when it turns out you spent way too much money on concrete instead of agricultural development you are screwed. Also, US financiers are bondholders, meaning the public. The public reposessing corporations would mean nationalization, which...Chinas economy is already far more nationalized than the US.
- blackrock 6y agoApparently you’re not following the news lately. The Fed is buying up all the corporate junk bonds. And with all the impending bankruptcies, they’re probably a few steps away from buying company stock outright. You can sugar coat this all you want, but it is effectively nationalization.