Is China bankrupt?

I was doing a little "light" reading and came across this piece from Jim Jubak from MSN Money. The title obviously piqued my interest, but when I began reading the article I found myself feeling rather uneducated in how the financial system worked in China, especially after theslight capitalization over the recent years. This is an interesting piece and does pose a serious look at whether China isn't necessarily as solvent and in control as some thought.
Is China Bankrupt?

The fact that China uses promises (IOU's) as currency, and that we all accept these IOU's as having value means that China is bankrupt.

Any IOU from any county, be it in $ £ Euros, or any other denomination, is still an IOU.

None of them are worth anything in reality.

reply to post by dampnickers


A mortgage is an I.O.U.

A credit card is an I.O.U.

A personal loan is an I.O.U.

Do all these mean nothing?

reply to post by OZtracized


Yes, yes in fact they do mean absolutely nothing.

Really, one could extrapolate that to the fact that currency printed on paper is worth nothing. As well as chunks of copper with nickel plating to look silver.

Realistically, however, the three you listed mean the least of all. Nothing of worth changed hands in those cases, so they are valueless.

reply to post by D.E.M.


The phrase "nothing of worth" is open to interpretation.

I suspect my bank would disagree.

"Nothing of worth" is made worthy by a declaration of "worth" by my signature on paperwork as drafted by my bank.

If I refused to pay monies as dictated by my bank, said bank would ensure my "worthless" ass spent some time in jail.

Originally posted by OZtracized
reply to post by D.E.M.

 

The phrase "nothing of worth" is open to interpretation.

I suspect my bank would disagree.

It's already been proven in 'their' courts that paper fiat money and the other 95% of electronic money is worthless as it's backed by nothing more than goodwill on your and my behalf.

The fact that money, and every other system that implies money i.e. a mortgage, loan are all negotiable instruments.

Listen you yourself, talking about Banks as if they actually hold some sort of moral high ground when we come to money. Are you so asleep that you can’t see yourself as a slave to the BANK system?

nonsense,usa is bankrupt not china , more american propaganda to hide fact that how incompetent US govt is

[edit on 13-3-2010 by sadchild01]

Let's put it in nice and gentle way.

The IOUs are worth something when you hold it, so long as you are able to recover the actual value, and interest if any.

But when you cannot, the giver of IOUs cannot pay or defaults, you have nothing. Thus your IOUs are worthless. Putting the other guy in jail is useless as you are probably contributing to his welfare in jail through your taxes.

China's IOUs are worthless simply because it is not a country ruled by law. They are commies, for goodness sake! Since when had any commie made good their promises when one is out of favour? You can't fight them, for they are more vicious and underhand than you. You can't sue them, because their judges toe the party line.

You are on your own when you accept IOU from China. The chinese masses are screwed. Hopefully may the corrupt CCP truly reform after 20 years of BS, for the sake of the common people.

reply to post by mlmijyd


Attempting to merge banks and morals could be likened to attempting to merge quantum physics with classical physics.

The two are incompatible (so far...)

My post was intended to highlight a point. It was not intended as a representation of my personal beliefs!!

That said, if I were to discontinue my repayments, I suspect that I would encounter some difficulty....

Originally posted by OZtracized
reply to post by mlmijyd

 

Attempting to merge banks and morals could be likened to attempting to merge quantum physics with classical physics.

The two are incompatible (so far...)

My post was intended to highlight a point. It was not intended as a representation of my personal beliefs!!

That said, if I were to discontinue my repayments, I suspect that I would encounter some difficulty....

Of course you will, BUT only if you intend to live your life with integrity and trust. Once you are declared a bankrupt or in some countries which makes one goest to jail, your future may not be rosy, for not many in this world are forgiving of bankrupts.

But if you don't give a damn, the holder of IOUs are gonna sweat big time. As said often:-owe the banks a thousand dollars, you are in trouble. Owe the banks a million, and the banks will be in trouble! :-P