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"This is clearly unsustainable. After all, there eventually has to be a return on all those investments. Factories have to produce goods that are profitably sol
by narrator 11y ago
"This is clearly unsustainable. After all, there eventually has to be a return on all those investments. Factories have to produce goods that are profitably sold. "
Nope. In China loans go bad all the time and the government prints up some money to buy and resell the debt at a discount and things keep moving right along. They have a different system In China. This is so hard for anybody in America to get since economics is taught as if it's the physical structure of the world when it's really just a game with a bunch of rules that structure the society in a certain way.
- EGreg 11y agoWell as long as China is doing enough to import whatever it needs, it's fine. Most countries need certain imports, and that's the market discipline that limits what they can do. They want tourists, they want dollars, etc. If China was a completely closed system with no needs then yes, they could probably get away with a lot more.
- sitkack 11y agoDon't we do the same thing in the states? Except we loan money to huge banks at 0% who turn around and sell that money back to the people @ 5+%