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2012-09-08 China-Japan-Koreas

Are Chinese Banks Hiding The Mother of All Debt Bombs?

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Posted by lotp 2012-09-08 00:00|| E-Mail|| Front Page|| [11126 views ] Top

#1 Yes.

Posted by Bright Pebbles 2012-09-08 07:03|| 2012-09-08 07:03|| Front Page Top

#2 This is a worry. China imploding economically will lead to massive unrest. Totalitarian countries in the past have used a hated enemy and a war to distract people from their anger at the government...

Posted by DarthVader 2012-09-08 09:52|| 2012-09-08 09:52|| Front Page Top

#3 How very inscrutable!

One of the lessons of economic history seems to be that you can get great growth by government intervention, but forces build up and eventually, when the economic chickens come home to roost, you end up in the Greece.

Posted by SteveS 2012-09-08 10:58|| 2012-09-08 10:58|| Front Page Top

#4 China imploding economically will lead to massive unrest. Totalitarian countries in the past have used a hated enemy and a war to distract people from their anger at the government...

Never mind war, Anakin. Just look at the list of the staff that, nowadays, is produced only in China (for example the computer I'm using to write this message on).

Posted by g(r)omgoru 2012-09-08 14:42|| 2012-09-08 14:42|| Front Page Top

#5 Totalitarian countries in the past have used a hated enemy and a war to distract people from their anger at the government...

Not really open to the Chinese, who rely on free and open trade to keep the economy going. War will cause unemployment to skyrocket. That's on top of the direct financial cost of fighting Uncle Sam. And if they lose? Note that wars end, but economic sanctions can continue for decades. Then there's the foreign investment driven away by the threat of future wars. Today's just-in-time supply chains are extremely allergic to the risk of war. If China wants to continue being the world's manufacturing hub, it needs to avoid war at all costs.

Posted by Zhang Fei 2012-09-08 18:20|| 2012-09-08 18:20|| Front Page Top

#6 Totalitarian countries in the past have used a hated enemy and a war to distract people from their anger at the government...

This distraction idea, one of the pillars of neo-conservatism, is fundamentally flawed because it views the masses as morons who are easily led by their noses. In reality, most people already know what they believe. In totalitarian societies, many will parrot the pieties of the ruling party, but only if certain sacred cows remain inviolate. If NK's Kim suddenly decided that two Koreas was the natural order of things and started broadcasting to that effect, he'd be turfed. If Hitler had decided to dissolve Germany into Prussia and the former German kingdoms and principalities, does anyone really think the German people would have followed him? The Chinese government is hyping territorial issues because the Chinese people view it as a sacred cow. Much as in the Muslim world, the Chinese populace is more bloodthirsty and revanchist than the Chinese regime.

Posted by Zhang Fei 2012-09-08 18:33|| 2012-09-08 18:33|| Front Page Top

#7 China imploding economically will lead to massive unrest.
Maybe not, DV
Ever since China moved from Communism to Keynesianism, she has been pursuing a type of Keynesiamism that most economists in the West are unaware of, let alone know how to incorporate into their calculations.
At its core Keynes General Theory is a dual economic theory.
As Keynes said in his introduction to the German edition to his book in 1936 (3 years after Hitler came to power and many of whose policies he incorporated into his theory)

"The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire. This is one of the reasons that justifies the fact that I call my theory a general theory."
China adopted the totalitarian theory.
When a peasant moves into the manufacturing sector from a collective farm, they can only do so by being granted a working permit. Permits are strictly controlled.If they lose that permit its back to the reservation for them. So most of the unemployed will not cost them anything in welfare payments and will be kept under control by the collective farm management.

Posted by tipper 2012-09-08 21:04|| 2012-09-08 21:04|| Front Page Top

#8 When a peasant moves into the manufacturing sector from a collective farm, they can only do so by being granted a working permit. Permits are strictly controlled.If they lose that permit its back to the reservation for them. So most of the unemployed will not cost them anything in welfare payments and will be kept under control by the collective farm management.

AFAIK, agricultural collectives in the Maoist sense have more or less been dismantled, except from the standpoint that land is held in common with the rest of the collective. (Grain is grown by gigantic state-owned corporations that hire employees with no claim on the land being farmed). Each villager is responsible for his own parcel of land, meaning that the harvest belongs to him, but he needs to buy the seed, plant the crops, fertilize and water them and so on. Residents in villages located on land slated for development occasionally hit the jackpot - they get rent in perpetuity (divided by number of the residents on the village roster). The riots that occur over land issues are typically due to village chiefs who have negotiated corrupt side deals that stiff the residents. Eligibility is determined by lineage, not residency.

Villagers who move to cities can find work without residency permits. The problem they face is in getting a free public education. Getting a local residency permit that makes their children eligible is dependent on (1) local lineage, (2) marriage to a local or (3) a hefty payment to the local government.

Posted by Zhang Fei 2012-09-08 23:55|| 2012-09-08 23:55|| Front Page Top

23:55 Zhang Fei
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