Originally Posted by Backwards Observer
Couple things about China's banks that nobody brings up and they are critical in understanding how they beat us. First China is a sovereign nation and can and does create Sovereign Credit(debt free money)....it doesn't have to borrow money. China has no Federal Reserve, it is a nationalized banking system and because of that the banks are Policy driven not Profit driven. They are probably All broke by western standards but it doesn't matter if the debt becomes to bothersome they will just charge it off their books. What matters to China is physical production assets are placed inside it's own borders because that is real wealth not pieces of paper, they can and will print as many as they need so long as the relationship between money and physical production assets are kept in balance. Oh yea, where did they learn this, the US Constitution of course, Abe Licoln in paticular. Credit does not mean debt!!!!!!it is simply an accounting term for right side of the account ledger to keep track of money, it has nothing to do with debt.
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