Tuesday, April 21, 2015

China doesnt look so good

China Sees First Bond Default by State Firm With Tianwei

China’s corporate debt is the highest in the world, former central bank adviser Yu Yongding wrote in the official China Daily last week. Companies had $14.2 trillion in debt at the end of 2013, exceeding every other country including the U.S

Posted by mark @ 11:55 AM (7019 views)
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5 thoughts on “China doesnt look so good

  • Debt levels around the world have got to such a ridiculous situation I can’t see anyone ever paying the money back. I know this article is about corporate debt but it’s made me think about debt in general. The new phrase used by politicians in this country is ‘balancing the books’ – by which they are referring to the annual deficit not the mountain of accumulated debt. Public sector debt was a low point in the 1970s and anyone who can remember those days will not want to go back there when it’s easier to borrow some more money and not give it back. Debt default is just another form of taxation when you think about it.

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  • Streamingfreedom says:

    Scary amounts of debt yes but that’s fractional reserve banking for you. It isnt supposed to be payed back just a healthy level of debt that keeps society functional. Providing society is healthy, it is not too much. The question of whether society is healthy or not is the one to ask, not is there too much debt. It may be easy to keep borrowing more but you are just increasing the amount in circulation and devaluing the pound. Vicious circle and you cant have it both ways.

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  • @2 very true but I don’t think society is very healthy.
    We have a housing crisis, young people can’t get decent jobs and have massive uni debts, jobs are outsourced to China and there is a massive balance of payments deficit, refugees are drowning all over the place, there are constant wars in the middle east (and elsewhere), massive environmental destruction, climate change…us humans are toast!

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  • To whom is this debt owed? The wealthiest 1% in the world own half its assets. That’s a clue. And how did they acquire those assets? By leveraging up other people’s money with the help of the governments indebted to them.

    This indebtedness been going on since emerging states borrowed from bankers (tax collection systems were useless) to fund expansionist wars to acquire new territories, which (kings and princes hoped) would supply the wherewithal to pay back the debts. When they failed to do this the bankers lost.

    When the northern Italian city states could no longer invest profitably in trade in Asian silks and spices without precipitating a reduction in returns big capital invested in state-building and war. The first central banks were run by the states’ creditors on their own behalf to ensure that future state revenues were administered by them. Sovereign bonds bred money – they were easily negotiable and free of the risks involved in trade. The state and capitalism and debt are Siamese triplets.

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  • clockslinger says:

    “Give me control of a nations money supply and I care not who makes it’s laws”

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