I fully get that people’s hopes on China being some powerhouse to the global economy have pretty much been dashed, but I have been calling bull on this meme for years. Why? The Chinese economy is just as much a ponzi of fraud, corruption and fiat money as the U.S. economy is. The only difference is they are smart enough to be buying the gold that the imbeciles in the West are selling to them. Down the road, when the West has no gold and is broke don’t blame those that bought it. Blame our inept “leadership” for not having done the same.
Key quotes from the NY Times article:
TAIHE, CHINA — The Chinese investment vehicle known as Golden Elephant No. 38 promises buyers a return of 7.2 percent per year. That is more than double the rate offered on savings accounts in China.
Absent from the product’s prospectus is any indication of the asset underpinning Golden Elephant: a near-empty housing project in the rural town of Taihe at the end of a dirt path amid rice fields in one of the poorest provinces in China.
“Some banks have been using new proceeds to cover losses from previous products in the pool,” said David Cui, a strategist at Bank of America Merrill Lynch, referring to new wealth management products. “In our view, this is not fundamentally different from a Ponzi scheme,” a fraud in which early investors are repaid with money collected from later clients instead of proceeds from investments. “The music may stop at a certain point if and when” the assets the wealth management products are based on stop expanding.
In a review of more than 50 wealth management and trust loan products, with the aim of tracking where investors’ money in the products ends up, all but two failed to explain or even display the underlying assets behind the products.
The China Banking Regulatory Commission, which oversees banking products, said more than 20,000 wealth management products were in circulation, compared with a few hundred just five years ago.
Full article here.
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As long as we’re discussing China, this, if it’s true, needs to go viral. I have no way of verifying it and saw it a few days ago at the blog at the link:
http://occupycorporatism.com/government-silently-positions-for-martial-law-as-financial-collapse-arrives-in-america/
“A source in the Deutsche Bank claims that in 2008 our financial and monetary system completely collapsed and since that time the banking cartels have been “propping up the system” to make it appear as if everything was fine. In reality our stock market and monetary systems are fake; meaning that there is nothing holding them in place except the illusion that they have stabilized since the Stock Market Crash nearly 5 years ago.
Since this time, the Department of Homeland Security (DHS) in conjunction with FEMA and other federal agencies have been quickly working to set in place their directives of control under a silent martial law.
The Deutsche Bank informant says that the cause for the bailout of the banks was a large sum of cash needed quickly to repay China who had purchased large quantities of mortgage-backed securities that went belly-up when the global scam was realized. When China realized that they had been duped into buying worthless securitized loans which would never be repaid, they demanded the actual property instead. The Chinese were prepared to send their “people” to American shores to seize property as allocated to them through the securitized loan contracts.
To stave this off, the American taxpayers were coerced by former President Bush and former US Treasury Secretary Hank Paulson. During that incident, the US Senate was told emphatically that they had to approve a $700 million bailout or else martial law would be implemented immediately. That money was funneled through the Federal Reserve Bank and wired to China, as well as other countries that were demanding repayment for the fraudulent securitizations.
To further avert financial catastrophe, as well as more debt or property seizure threats by the Chinese, the Euro was imploded there by plunging most of the European countries into an insurmountable free-fall for which they were never intended to recover.
All the money that those banks claimed they needed to avert collapse was also sent to the Chinese to add to the trillions of dollars lost during the burst of the housing bubble on the global market.”
While not doubting that China is in serious trouble, articles like these often smell of a disinformation campaign against China by the West (mainstream media).
There’s a currency war between China and the US (& GB et al) for all the marbles, which is being fought on a number of levels. Media propaganda is a large part of it.
China knows the whole globe is a Ponzi, that’s why they’re encouraging their citizens to buy precious metals and why they’re divesting out of things like worthless T-bonds and accumulating as many hard hard assets as they can, from Canadian oil companies to African agricultural land to entire towns in the U.S.S.A. China knows the score and it’s a cop-out that the Western world is placing dependance of their own success on the Chinese economy. China needs to finance their game in the meantime too, granted but they’re on a long, drawn-out shopping spree throughout a Western world going out of business sale.