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Since this is a purely internal Chinese issue, Mosler's Dictum applies: There is no financial crisis so deep that it cannot be solved by a sufficiently large public spending program.

The question is one of political will. Which means you need a Beijingologist, not an economist.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 20th, 2013 at 05:54:45 AM EST
The corollary would seem to be that, unless the Chinese government is Moslerian, there's a high risk of a financial crisis.

Where's a Beijingologist when you need one?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jun 20th, 2013 at 07:50:10 AM EST
[ Parent ]
Moslerian or pragmatic.

You don't need to understand economics to keep spending money until it works. In the same way that you don't need to know ballistics in order to keep firing ranging shots until you hit something.

It helps, though.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Jun 20th, 2013 at 07:59:11 AM EST
[ Parent ]
They have shown Mosler-ian tendencies in the past.
They certainly have more avenues open to them than would be embraced by (for example) the ECB...
by Metatone (metatone [a|t] gmail (dot) com) on Thu Jun 20th, 2013 at 11:28:45 AM EST
[ Parent ]
On the bright side the Chinese economy still has huge state owned enterprises that are significant operators and it still has over $1 trillion in foreign reserves. Perhaps we have found the perfect place to apply the US new classical principle that debts don't matter as they just represent changes in who owns what and who owes what to whom. The Chinese could largely settle this amongst themselves.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Jun 20th, 2013 at 10:52:30 AM EST
[ Parent ]

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