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Check out this essay recently published at Prudent Bear. I find it scary. When all those foreigners discover that the debt they have been sold is really just toxic waste, the stampede for the exits will have an effect on the dollar and on the long bond rate that will truly be a sight to behold. And it sounds like we are getting real close to that "point of awakening", because they are running out of suckers to sell the debt to...
An Excellent Essay At Prudent Bear
with frightening implications
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#3
roidrage 
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Posted 20 December 2002 - 04:42 PM
I give it a high stool-factor for this:
rr
Quote
The writer is reminded of the first advice ever received on Chinese banking in the 1950's from an "old China hand." Having spent 30+ years in various postings under various regimes and absorbed the multi-millennia culture and it's long range imperative, he advised a callow banking apprentice on the 4 D's of Chinese banking. The wisdom received was as follows: beware the 4 D's; they will defalcate, they will default, they will defraud and, finally, they will defecate upon you!
rr
#5
Goldmember
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Posted 20 December 2002 - 06:31 PM
"Defecate" in the form of New Balance sneakers is tiddlywinks in comparison to the SEVEN semiconductor foundries coming on line in a world awash with overcapacity and under utilization already. The same example will apply to just about anything. Have you seen the new Chinese SUV's, and how long until they are at a showroom near you? CHEAP too!
Anthony caused pearls to be dissolved in wine to drink the health of Cleopatra; Sir Richard Whittington was as foolishly magnificent in an entertainment to King Henry V; and Sir Thomas Gresham drank a diamond, dissolved in wine, to the health of Queen Elizabeth, when she opened the Royal Exchange; but the breakfast of this roguish Dutchman was as splendid as either. He had an advantage, too, over his wasteful predecessors: their gems did not improve the taste or the wholesomeness of their wine, while his tulip was quite delicious with his red herring.here
#6
The End
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Posted 21 December 2002 - 12:49 AM
$12,000-15,000. We are wingohockingmoyamensinged.
NONE of what I type, should be taken as financial advice.
And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.
--Waters
And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.
--Waters
#7
Hypertiger
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Posted 21 December 2002 - 03:32 AM
THERE IS NOT GOING TO BE ENOUGH "FODDER" TO REACH THE NEEDED MULTI TRILLION OF "NEW" LOANS NEXT YEAR AND EVEN IF INGENUITY AND LACK OF DILIGENCE WERE TO GENERATE THE REQUISITE, THERE AREN'T ENOUGH SUCKERS WHO HAVE NOT ALREADY BEEN BURNT TO ABSORB THE EFFLUENT
The hills are alive with the sound of music...
"$12,000-15,000. We are wingohockingmoyamensinged."
End what are you refering to, sorry?
The hills are alive with the sound of music...
"$12,000-15,000. We are wingohockingmoyamensinged."
End what are you refering to, sorry?
"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money (at the request of the consumer) we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hemphill, Atlanta Federal Reserve Bank,1938...
#8
machinehead
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Posted 21 December 2002 - 10:25 AM
More on the China Bubble:
"Reasonable estimates put bad loans at China's four biggest banks at 40 percent or more of gross domestic product. Bad debt at Japan's banks are about 10 percent of GDP.
"If the financial system is malfunctioning and there is little access to fresh credit, China's growth could weaken. That is a huge risk for Beijing because slower output is the single biggest risk to stability in the word's most populous country."
The banks from hell
"Reasonable estimates put bad loans at China's four biggest banks at 40 percent or more of gross domestic product. Bad debt at Japan's banks are about 10 percent of GDP.
"If the financial system is malfunctioning and there is little access to fresh credit, China's growth could weaken. That is a huge risk for Beijing because slower output is the single biggest risk to stability in the word's most populous country."
The banks from hell
"GOLD -- it's not just for misers anymore."
"Dollahs -- fire-starters for the K-wave winter." - Drano
"Three humps and a dump." - anotherone, 21 SEP 2004
"No gold was harmed in the making of this movie." - Bizarro Greenspan
[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals." - our jickiss
"Dollahs -- fire-starters for the K-wave winter." - Drano
"Three humps and a dump." - anotherone, 21 SEP 2004
"No gold was harmed in the making of this movie." - Bizarro Greenspan
[i]"Da Track. Da place where Morons bet on Animals Controlled by Criminals." - our jickiss
#9
Goldilocks
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Posted 21 December 2002 - 12:39 PM
What happens when the finances of 1 Billion people are put in jeopardy? Does the government assume responsibility and calmly explain the situation honestly and forthrightly to it's citizens? Or does it devolve into a panic of blamemanship? Does it seek to distract the populace? If so, what historically, are the means to do so?
I have been warning everyone I know for some time that on a 'strategery' basis we must fear the Chinese. They are a force unlike any ever faced by the United States.
They are numerically superior.
They are technologically not that far behind.
They are armed to the teeth.
They have an industrial capacity that in all likelihood exceeds the current US indutrial capacity or will soon enough.
They are not impatient (Hitler - Operation Barbarossa - What the hell was he thinking?).
They are dead set on a 'one china' policy.
If the banks implode.... Look out on the foreign policy front.
Goldi
I have been warning everyone I know for some time that on a 'strategery' basis we must fear the Chinese. They are a force unlike any ever faced by the United States.
They are numerically superior.
They are technologically not that far behind.
They are armed to the teeth.
They have an industrial capacity that in all likelihood exceeds the current US indutrial capacity or will soon enough.
They are not impatient (Hitler - Operation Barbarossa - What the hell was he thinking?).
They are dead set on a 'one china' policy.
If the banks implode.... Look out on the foreign policy front.
Goldi
#10
Hypertiger
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Posted 21 December 2002 - 01:23 PM
The behind the scenes deal is United States of America vs. China, Iraq and Afganistan are not going to be selling any oil to China. soon Iran and Saudi Arabia will be taken out of the equation... China has North Korea to do the dirty work... All in all if it was a complex risk board game the U.S. would have to turn into a military dictatorship to win, but that is a losing stratagy in the end... Have to see how the game unfolds in the middle of a global economic collapse.
"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money (at the request of the consumer) we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." --Robert H. Hemphill, Atlanta Federal Reserve Bank,1938...
#11 Guest_BEARDRECH_*
Posted 22 December 2002 - 12:16 AM
TAKACHI DID U NOTICE THAT THROUGHOUT THE ARTICLE AUSTRIAN ECONOMIST WAS MENTIONED ONLY ONCE???
I guess we have to thank the reigning powers for granting us small favors--nevertheless its astonishing:i mean the almost total absence in the great debates currently raging ,of the term-- Austrianism--
I'm reminded of the laughter of legal cynics ,wisely named legal realists,who invariably riposted, whenever the term JUSTICE came up,saying"Justice is what judges say it is" and correspondingly Keynsians answering those asseverating the existence of a "Natural rate of interest(austrians)",we,monetarists control,through,powers beyond your ken,the OUR definition of a proper RATE OF INTEREST"
I almost cant bear to use non-thelogical language anymore when discussing these things,espescially this GROWING ECONOMIC TOWER OF BABEL--and believe me when i tell you i am not,most emphatically, NOT A bible thumper .
P.S. DID u read the litany by greenfool yesterday?the epitome of mendacity--he lies like a rug!!!
beardrech
I guess we have to thank the reigning powers for granting us small favors--nevertheless its astonishing:i mean the almost total absence in the great debates currently raging ,of the term-- Austrianism--
I'm reminded of the laughter of legal cynics ,wisely named legal realists,who invariably riposted, whenever the term JUSTICE came up,saying"Justice is what judges say it is" and correspondingly Keynsians answering those asseverating the existence of a "Natural rate of interest(austrians)",we,monetarists control,through,powers beyond your ken,the OUR definition of a proper RATE OF INTEREST"
I almost cant bear to use non-thelogical language anymore when discussing these things,espescially this GROWING ECONOMIC TOWER OF BABEL--and believe me when i tell you i am not,most emphatically, NOT A bible thumper .
P.S. DID u read the litany by greenfool yesterday?the epitome of mendacity--he lies like a rug!!!
beardrech
#12
Goldmember
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Posted 22 December 2002 - 05:16 PM
Actually it would appear that currently SUVs in China are quite expensive with the currency pegged to the U.S. dollar. Some U.S. models like Grand Cherokees sell for like 80 thousand bucks. GM has four plants happening there and appear to be gearing up not only for the Chinese market but for exports from China to North America. How did one GM executive put it: "The key to a new investment is to utilize its full potential" 
GM to Use Chinese Engine in SUV for North American Plants
Chinamart Autorama I
Chinamart Autorama II
GM to Use Chinese Engine in SUV for North American Plants
Chinamart Autorama I
Chinamart Autorama II
Anthony caused pearls to be dissolved in wine to drink the health of Cleopatra; Sir Richard Whittington was as foolishly magnificent in an entertainment to King Henry V; and Sir Thomas Gresham drank a diamond, dissolved in wine, to the health of Queen Elizabeth, when she opened the Royal Exchange; but the breakfast of this roguish Dutchman was as splendid as either. He had an advantage, too, over his wasteful predecessors: their gems did not improve the taste or the wholesomeness of their wine, while his tulip was quite delicious with his red herring.here
#13
Goldmember
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Posted 22 December 2002 - 05:44 PM
The link about Chinese banks provided by Machinehead seems geared more to the slant of Citicorpse whining about not being able to inflate Shanghai's bubble at warp speed, which they would of course prefer. So with a new headquarters going up and 42 branches to fling fiat digits to the crapper wall with Citicorpse rolls out western media to whine about being constricted by Chinese banks that don't want to inflate as quickly lest a big bust imperils what has already been gained.
The Chinese have been sending Super Soaker water pistols here for years and now Citycorpse goes over there with the Ultimate Fiat Super Pisser and the neighborhood boys don't want to play.
The Chinese have been sending Super Soaker water pistols here for years and now Citycorpse goes over there with the Ultimate Fiat Super Pisser and the neighborhood boys don't want to play.
Anthony caused pearls to be dissolved in wine to drink the health of Cleopatra; Sir Richard Whittington was as foolishly magnificent in an entertainment to King Henry V; and Sir Thomas Gresham drank a diamond, dissolved in wine, to the health of Queen Elizabeth, when she opened the Royal Exchange; but the breakfast of this roguish Dutchman was as splendid as either. He had an advantage, too, over his wasteful predecessors: their gems did not improve the taste or the wholesomeness of their wine, while his tulip was quite delicious with his red herring.here
#14
assteroid
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Posted 22 December 2002 - 05:54 PM
China won't be an overwhelming threat. There are far more check marks in the minus column than the plus column. You can't compare their situation with our past. America's meteoric rise in the world was built on a confluence of forces both synchronistic, and synergistic, against a much cleaner environmental backdrop. China's water problems and inability to control oil prices, along with crushing corruption will act as a brake. It won't supplant the U.S. or Europe. It's domestic economy can't make up for the losses its going to sustain by our reduced ability to purchase. China is no longer a sleeping tiger, but it will remain a groggy tiger for decades.
