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| quote: | Originally posted by Krypton
Uncontrolled debt always brings down empires. |
China has a huge surplus. That's why they can actually do a massive stimulus program like the one they're engaged in without fear of U.S. like debt consequences (yet). However, I did recently read an article by Stephen Roach who is concerned that they're doing their stimulus wrong--i.e. they are giving out loans to anyone with poor underwriting and are sowing the seeds of future debt losses as opposed to focusing on getting their consumers to take up more of the burden and spend. i.e. their GDP is being driven by G and I (and X as long as the U.S. and others consume) and not enough C.
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