Quote Originally Posted by Southernguy View Post
Does that means no problems for China...? I think nope. But dependance on the USA for thechnology seems to be dwindling.
I don't think anyone believes the cockamamie financial books of Chinese companies or the Chinese government itself. However, all the malinvestment in China has created a lot of real, physical infrastructure and created technology companies with know-how and some capability to manufacturing fairly high-tech product. When the Chinese bubble pops, the assets will be picked clean by Chinese vultures, not foreign vultures. So assuming that the CCP can avert a revolution if/when the Chinese economy blows up, it appears that China should be in reasonably good shape since it will have actually created something of at least somewhat enduring value.

Sadly, that is more than I can say about the U.S. It appears to me that most of the new debt created as a result of QE and ZIRP has gone to rent-seeking activities. When things blow up here, I don't think we're going to look back 10 or 20 years ago and say, "Ignoring the financial blow out (let's say we write off all the debt), the U.S. is in noticeably better shape than it was back then."