Re:China’s Market Rout Is a Double Threat
by coenhyde on Sunday July 05, 2015 @05:49PM
(#9835170)
That is one outcome, assuming China tries to repay their debts. And as you are aware that hasn't worked out very well for Japan. If I was China and shit hits the fan, I would declare bankruptcy. It would hurt everyone but a shock like that probably has less chance of triggering a revolution than 20 years of decline.
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Re:China’s Market Rout Is a Double Threat
by adventured on Sunday July 05, 2015 @07:46PM
(#9835703)
In the case of both Japan and China, most of their debt is held internally.
That's why Japan is debasing the Yen, instead of performing a traditional default. They're unable to afford their debt, but if they just outright default, that will hammer their economy in one big hit - the creditors are the Japanese people. The Yen debasement hits them as well, and reduces the real value of the debt, but the premise is it's a gradual process they can adjust to over time (and the politicians get to lie about what's happening, another reason they all universally prefer inflationary schemes).