The economic boom of the 1920's was stunning. The problems were caused by the government's reaction to it.
ping for later
mark
bump!
Just wait until the peasants find out their money is not really in the bank and that corrupt commies have stolen a lot of it.
Paulsen says that there are gremlins if they open their eyes, so its best if we get them to keep their eyes shut.
They have (surplus) productive capacity as far as the eye can see, their banks are bankrupt and their government holds 1 trillion (plus or minus) in currency reserves (70 per cent in USD).
If they open their eyes, they'll realize their banks should be in bankruptcy. Thus they can't let in foreign banks which will draw away safety-seeking customers. Also, quickly coming to grips with this problem will send millions of mobile workers into the streets to riot.
So... Paulsen suggests that they keep on doing what they've been doing. I believe this is a case where it pays to slowly eat a little bit of crap over a long period of time. Its best for us (devaluing USD to Renimbi) and for them (minimize the riots). But, in the end, reality (the market economy) must be faced.
I don't think that either the US or China want the Chinese banking and credit systems to collapse.
Here's a mini-microcap which has been working at rolling out a national credit reporting system in cahoots with the Chinese government. This has been a 'work in progress', as they say. The stock trades(rarely) as SMS-V on the Venture Exchange. A seriously speculative stock, largely held by Chinese insiders.
http://www.yangtzetelecom.com/s/Home.asp
From the home-page:
"Yangtze's new service, the Credit Information System, is targeting businesses in China with registered capital of at least $1 million RMB, estimated to number in the millions. The core of the system is a large centralized data base created, updated and queried via a combination of either the internet, a unique SMS channel or interactive voice responsive technology. The system is currently being rolled out to a number of cities primarily through the branch network of China Enterprise Confederation (which, similar to the General Chamber of Commerce or Employers' Association in western countries, is a large quasi-government body with 300 offices thoughout China). A key benefit of this service is in building credibility and providing transparency to China's enterprises, consistent with what the Central Government has identified as a necessary condition to further faciliate economic development."
Please provide a working link for this.
bookmark ping-a-ling for another read , & THANKS bruinbirdman
... I hope this thread , goes on for awhile
and we continue to hook our economic wagon to the global horse why?
I must admit that I don't understand global economies
But I'm also not dumb enough to believe that doing this without a solid local economy behind us is an intelligent thing to do.