The World Economics Thread

[TooMuchBaijiu]

Is there any truth to the statements that China may bail out the failing European countries? Like Italy, Portugal and Greece?

That would seem extremely unlikely. Firstly, China doesn't strike me as a country that has any real willingness to float another unless perhaps there was some advantage for doing so. Secondly, what would be the advantage of doing so?

[bodidley]

Bad economies in the EU and U.S. are bad for China's economy because we're talking about hundreds of millions of loyal customers. China has a growing domestic demand but it still relies on foreign customers to drive growth, and the Party needs growth to maintain stability and keep people happy with the current system. The narrative of the People's Republic bailing out the floundering european capitalist democracies would also lend a tremendous amount of clout to the nation on the international scene and impress the domestic audience.

[TooMuchBaijiu]

That's a fair argument for bailing out the PIGS, but consider Dagong, China's most prominent credit rating agency. Italy is rated BBB, Portugal BB+, and Greece a firm C. (China, of course, is AAA, and the U.S is less solid than Saudi Arabia and Chile, apparently). Now I know Dagong doesn't speak for China, but I think it is some evidence that they would see such a venture as too risky to attempt.

[Lord Yang Jiahua]

So What happened to Greece?

[Dong Zhou]

So What happened to Greece?

Recently or to start them into the recession or?

[Lord Yang Jiahua]

What recently happened to Greece, i should have asked. Did they get a controlled default? I heard something about them going off the euro?

[Dong Zhou]

My understanding is that Greece has been arguing a lot with the EU, not fulfilled what the EU demands so the bailout funds are being withheld and one Greek party is refusing to agree to abide by the cuts if they get elected.

[Dong Zhou]

BBC's Paul Mason report on Greece and speculation of the political consequences coming within Greece.

[Lord Yang Jiahua]

Poor Mr. Glezos....
But jeez, total anarchy or civil war are next!!

I still cant get around why cant every country just drop all the debt from everyone, forget about what they had, and start the hell over all again, like pushing the reset button on the entire world economy, why cant we all just forget about the object we call money and start the hell over!>?

[Dong Zhou]

Because that would be unfair on the prudent countries, lead to the collapse of the banking sector, potentially bankrupt those who are also owed money and sets a bad precedent?