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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 387.11+0.1%Dec 4 4:00 PM EST
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To: Cogito Ergo Sum who wrote (77380)8/7/2011 10:14:19 PM
From: Hawkmoon1 Recommendation  Read Replies (1) of 218178
 
TBS, I never stated that American's weren't also to blame.

Let's compare this the sub-prime lending debacle. Who's to blame more for what happened? The TBTF banks who engaged in their own form of "manufactuer financing" by securitizing their loans and depending upon orgination fees? Or is it the American borrowers who took advantage of loose lending standards to buy the things they couldn't afford?

China has fueled it's economic growth on selling things on credit... The very same strategy that GM and other automakers pursued to increase their revenues and sell cars.

But when the ability of consumers to service their debt wanes, those manufacturers are particularly vulnerable unless they can find other markets for their products.

China has engaged in a "beggar thy neighbor" policy of mercantilism. And at the same time they pumped their excess profits into US treasuries in order to keep our interest rates low and prevent inflation in their own economy. They just had no where else to park such huge sums.

Now they want the US to "deal" with it's debt problems (austerity and paying off that debt) so they don't lose more value on their US treasury holdings.

The US has serious problems, there is no doubt about this. But let's not exonerate the Chinese governent for their ill considered lending practices.

We aren't excusing the TBTF banks, are we? Why be any different with regard to China?

Loan someone $1 million dollars and the borrower has problems. Loan them $1 Billion and its the lender that has the problem.

Hawk
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