As a geo-political analyst, amongst other important endeavors, sometimes I find myself intrigued with "What If" scenarios.
One recent scheme in the news was for the Euro Zone to sell debt to China to bail out various EU member nation-states, and without getting into which ones because we are all already familiar with them, I thought this might be a great topic for discussion.
You see, there was an interesting post on the Forbes' Blog Network the other day by Gordon Chang (October 30, 2011) titled; "Will Europe Rescue China?" where he stated; "All eyes will be on China at this week's G-20 meeting in Cannes.
The expectation-or at least the hope-is that Beijing will contribute to Europe's bailout fund, the European Financial Stability Facility.
" Now then, one might ask why they would so un-frugally do such an imprudent thing with their treasury.
Well, China is going for growth, and can barely keep up as it is with wage inflation at 15-20% per year, energy shortages, and other challenges.
So, if the EU goes into a severe economic crisis, then China is also a net-loser.
Yes, so too is the US as our financial banking sectors are intermingled and half the DOW stocks would take a hit because Europe is a big market for them.
Next, I ask the question with all the questionable accounting in China, who is to say that their sovereign wealth funds are as strong as they uphold them to be.
We know their largest banks have gone public, but did so merely to fill the hole of bad debt they'd accumulated, just as many of their municipal vehicles, which were so active during their stimulus program a few years back, have now been busy floating bonds to fill their sink holes as well.
Sometimes, I just wonder who on Earth is dreaming up these schemes and why anyone would assume the Chinese would be so naïve to bailout an un-bailout-able Euro Zone? Further, the notion that the Chinese have to bail them out to continue their growth is ridiculous, because the increased taxes on the public in Europe would remove from their pockets the money to buy more Chinese imported goods.
Anyone expecting a miracle from the Chinese to bailout Europe is living in pure fantasy-land for two reasons.
(1) the Chinese are not blithering idiots, and (2) the Chinese can't, as they don't have enough in reserves, and need what they have for their own in-country and internal ambitions, which are numerous I might add.
Please consider all this.
One recent scheme in the news was for the Euro Zone to sell debt to China to bail out various EU member nation-states, and without getting into which ones because we are all already familiar with them, I thought this might be a great topic for discussion.
You see, there was an interesting post on the Forbes' Blog Network the other day by Gordon Chang (October 30, 2011) titled; "Will Europe Rescue China?" where he stated; "All eyes will be on China at this week's G-20 meeting in Cannes.
The expectation-or at least the hope-is that Beijing will contribute to Europe's bailout fund, the European Financial Stability Facility.
" Now then, one might ask why they would so un-frugally do such an imprudent thing with their treasury.
Well, China is going for growth, and can barely keep up as it is with wage inflation at 15-20% per year, energy shortages, and other challenges.
So, if the EU goes into a severe economic crisis, then China is also a net-loser.
Yes, so too is the US as our financial banking sectors are intermingled and half the DOW stocks would take a hit because Europe is a big market for them.
Next, I ask the question with all the questionable accounting in China, who is to say that their sovereign wealth funds are as strong as they uphold them to be.
We know their largest banks have gone public, but did so merely to fill the hole of bad debt they'd accumulated, just as many of their municipal vehicles, which were so active during their stimulus program a few years back, have now been busy floating bonds to fill their sink holes as well.
Sometimes, I just wonder who on Earth is dreaming up these schemes and why anyone would assume the Chinese would be so naïve to bailout an un-bailout-able Euro Zone? Further, the notion that the Chinese have to bail them out to continue their growth is ridiculous, because the increased taxes on the public in Europe would remove from their pockets the money to buy more Chinese imported goods.
Anyone expecting a miracle from the Chinese to bailout Europe is living in pure fantasy-land for two reasons.
(1) the Chinese are not blithering idiots, and (2) the Chinese can't, as they don't have enough in reserves, and need what they have for their own in-country and internal ambitions, which are numerous I might add.
Please consider all this.
Source...