What Does Evergrande Meltdown Mean for China?

Re:What Does Evergrande Meltdown Mean for China? by aazaa on Thursday September 23, 2021 @05:13PM (#28635499)

> That system, by design, has conquered the boom/bust cycle, but western observers refuse to believe this because they are so throughly bought into the architecture of the western financial system and the many billions of words written on the topic of the operation of that system which is based on very different rules that they cannot imagine it could work any other way.

One thing all markets at their very peak have in common is the widespread belief that the business cycle has finally been conquered. Whether that's the "permanently high plateau" of the 1920s or the "new economy" of the late 1990s.

Remember "The Maestro?" Alan Greenspan was the guy who knew what was what and kept the economy humming.

How is he viewed now?

Same story, different actors. I doubt that any of these notions are true:

1. All of the information about Evergrande is out.

2. Half of the information that is out is accurate.

3. The CCP rescue actions will not re-inflate the bubble.

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Re:What Does Evergrande Meltdown Mean for China? by narrator on Thursday September 23, 2021 @05:53PM (#28636044)

You're using a narrative to analyze the economy though. That obscures the underlying dynamics of money creation in booms and busts, namely fractional reserve banking and the money multiplier that causes the money supply to rapidly decrease and increase in the western banking system as a result of loans and defaults.

I'm not even sure if the money multiplier effect even happens in China, or if it's 100% reserved. It's a bit hard to get information about Chinese banking regulations in English.

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