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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (29181)	2/25/2003 5:16:39 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

Hi Jay. What? Me Worry? This is fun: < Take the frightening banking situation. The four state-owned banks, which account for about 90 per cent of the financial system, are weighed down by bad loans that outsiders estimate at close to half of their total lending. The way out is for the Big Four to stop financing badly run state companies (70 per cent of lending goes to state-owned enterprises) ...> I don't see a problem. If the Big Four have made Big Loans to money-losing government businesses, the government can simply print some more of those renminbi, yuan, jiao and fen, whatever they are and ship it out to the creditors. They can save the printing ink and trees by doing it via Microsoft software or the increasingly ubiquitous cdma2000 phragmented photon cyberspace system. Because the economy is expanding so fast, they need to increase the amount of monetary juice sloshing around the system and what better way to do it than by propping up some old-timers in the process of being restructured? The banks won't go bust because they know the government will keep them whole. The state-owned companies won't go bust because the government can ease them down gently with continuous injections of new cash. The printing won't be inflationary because there are a billion people set on a deflationary path and the pixelation of a few more yuan will merely neutralize the price reductions which would otherwise occur. Same deal here < The government has run up a deficit of $97.6 billion in the first four months of the 2003 budget year, a reversal from the corresponding period last year when a small surplus was produced.> as I explained in my post to Ray. Borrow or print = don't worry, be happy. Message 18624294 All quiet on the western front. Mqurice