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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (102015)	9/16/2009 1:43:56 PM
From: Hawkmoon	1 Recommendation Respond to of 116555

Without the excess money that was sloshing around, which was created by the Fed, would China have been able to totally modernize its economy in such a short period of time? What China engage in was mercantilism, or more appropriately "manufacturer financing", clear and simple. They sold us stuff and rather than repatrioting all the cash, they invested in their target markets in order to facilitate continued low interest lending. Their "savings" enabled our borrowing. And, of course, our mortgage and banking industry came up with "creative" means of originating loans using that Chinese money by securitizing the debt and turning it into a hybrid equity instrument via RMBS and CDOs.. etc, etc. This is, by no means, the whole story, but it's the biggest elephant in the room. And while millions of Chinese have been enriched in the process, hundreds of millions more are still living in abject poverty. Hawk