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China to Boost the Global Economy? Nope it’s also a Total Ponzi
I fully get that people’s hopes on China being some powerhouse to the global economy have pretty much been dashed, but I have been calling bull on this meme for years. Why? The Chinese economy is just as much a ponzi of fraud, corruption and fiat money as the U.S. economy is. The only difference is they are smart enough to be buying the gold that the imbeciles in the West are selling to them. Down the road, when the West has no gold and is broke don’t blame those that bought it. Blame our inept “leadership” for not having done the same.
Key quotes from the NY Times article:
TAIHE, CHINA — The Chinese investment vehicle known as Golden Elephant No. 38 promises buyers a return of 7.2 percent per year. That is more than double the rate offered on savings accounts in China.
Absent from the product’s prospectus is any indication of the asset underpinning Golden Elephant: a near-empty housing project in the rural town of Taihe at the end of a dirt path amid rice fields in one of the poorest provinces in China.
“Some banks have been using new proceeds to cover losses from previous products in the pool,” said David Cui, a strategist at Bank of America Merrill Lynch, referring to new wealth management products. “In our view, this is not fundamentally different from a Ponzi scheme,” a fraud in which early investors are repaid with money collected from later clients instead of proceeds from investments. “The music may stop at a certain point if and when” the assets the wealth management products are based on stop expanding.In a review of more than 50 wealth management and trust loan products, with the aim of tracking where investors’ money in the products ends up, all but two failed to explain or even display the underlying assets behind the products.
The China Banking Regulatory Commission, which oversees banking products, said more than 20,000 wealth management products were in circulation, compared with a few hundred just five years ago.
Full article here.
Delivered by The Daily Sheeple
2012-08-07 17:08:47
Source: http://www.thedailysheeple.com/china-to-boost-the-global-economy-nope-its-also-a-total-ponzi_082012
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