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Chinese Think Tank Implies America May Be Falsifying Its Accounting, Says US On Way To Default
Joe Biden came to China, saw, and failed to conquer the locals' ridicule. Punctuating just how "effective" Biden's visit to China was in order to "reassure that the US is solvent" (no seriously, that;s the name of the article) is a just released article in the Securities Times by Wang Tialong, member of Chinese think tank Center for International Economic Exchanges in which he went on to blatantly say that "The U.S. may be on its way to default on its debt despite the U.S. government's ability to print more money, a Chinese think tank researcher said Monday." Now this is nothing new in the escalating war of words between the two countries, although increasingly China appears to be attacking the primary loophole that defenders of the unsustainable US debt use, namely the fall back to the USD as a reserve currency. Wang went on further to implicitly accuse the US of fabricating economic data: "There is also no way to punish the issuer country if it falsifies its accounting and there is no way to restructure the issuer either, Wang said." Well, when China accuses the US of "falsifying accounting" you know you have hit rock bottom.
From Dow Jones:
The U.S. may be on its way to default on its debt despite the U.S. government's ability to print more money, a Chinese think tank researcher said Monday.
There is no guarantee for sovereign debt, which increases the risks the lenders face, said Wang Tianlong, a researcher at the China Center for International Economic Exchanges, a think tank supervised by the country's economic planner, adding that the issuer could be more careless in using the loans.
In the short term, the U.S. doesn't have much ability to reduce its deficit, Wang said in an opinion piece published in Securities Times. He added that the U.S. lacks the political system to guarantee that it will not default on its debt.
There is also no way to punish the issuer country if it falsifies its accounting and there is no way to restructure the issuer either, Wang said.
Wang's comments come after the U.S. Vice President Joe Biden said Sunday the U.S. "never will default" on its government debt and reassured Beijing that Chinese investments in the U.S. are safe.
Slowly, surely, China is realizing that the endgame is nothing short of out of control debt inflation, which is precisely what having no way to "restructure the issuer" means. That plus sending the US to bankruptcy court may be somewhat problematic. It also means that Chinese holdings of US debt will be increasingly worthless, and its population increasingly stabby as the price of hogs resumes its record climb. The only alternative is for the CNY to float and for the Chinese, Russians and Germans to say enough to this broken economic model and launch a gold (and other hard asset) backed currency. The only question is when.
h/t London Dude Trader
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Option 3 is not an option when the world is armed to the gills with nukes...
Cuban missle crisis is good example of what will happen when pols/bankers face nuke holocaust... nothing...
When the pols/bankers will have to face the prospect of living in a world destroyed by nukes... the nukes will not be used...
Maybe a renaissance of sharing will dawn upon the world?
S&P will drop a big Sh*t on China's debt binge ala property boom x1000.
Wang's comments come after the U.S. Vice President Joe Biden said Sunday the U.S. "never will default" on its government debt and reassured Beijing that Chinese investments in the U.S. are safe.
Yes, treasuries are safe in nominal terms. The Fed will make sure Treasury has enough cash to pay off maturing debt.
Default isn't the problem. Currency collapse is the problem.
Biden won't mention that. He won't mention the US dollar has lost 33% of it's value since the '08 crash, from all the public and private dollar printing and bailouts.
Bernanke won't mention it either. Geithner won't mention it either.
Nobody in governmemt talks about how much value the US dollar is losing. But it's the real story. The important story.
I agree, the US government won't default on its debt. Ever.
But the currency will collapse. Debt will be paid off in dollars worth less and less.
This is what China sees. And yes, they're going to do something about it.
Payback's a bitch. That's all I'll say.
"China, China, China"..... in my best Marcia Brady voice
You can sell us your daughters.
What makes you think Chinese will sell their daughters to poor broke HONKIES?
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
no no no no ... er ... YES
AND
a strong dollah policy!
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
sorry guys replies via mobile phone apparently makes multiple posts
Come again?
China at the cross roads. Hope they stay grooved in. Their geo-political role in the coming years will be crucial in deciding if the upcoming US-Sino stand off for RM controls and top dog play will turn to Armageddon.
If someone told me they owed money to a bank and then said "I just went in there and told that bank manager how it is", I would think B.S.
I don't think Joe Biden went to China to tell the chinese anything... rather, they summoned him to do some explaining.
"Biden reassured the chinese their inverstments are safe" should have read "Biden was warned of the consequences of fucking with chinese money".
It's obvious the Us is playing a game and playing for time, and in the end the chinese along with everyone else are going to be pretty pissed.
IMO
1) the US has issued credit to buy it's own debt and is preparing to do so again
2) the US is, over a span of years (not hours or days), spending more than it brings in
please define "default"
You were looking for black swans but it is more like buzzrds and flies circling over-head
perhaps China/Russia et al will back-stop Europe before we do
the terms will maybe be consensus on new world currency
Gold is up 80% and silver over 200% as currencies devalue. Default is good for PMs. Many countries are slowly defaulting now by devaluing their currencies. The dollar has lost over 20% of its purchasing power in the last two years I read...for example.
Sadly for savers such as retirees, workers, etc who lose value from devaluation. I hope ZH does a article on how inflation (devaluing the currency as in post-WWII) does this.
There is a massage parlour in Bang Kok that advertises 5 orgasms in body body massage guaranteed or your money back.
It works as nobody sues them after their first orgasm. They are booked solid all week long.
I think the Fed prints paper in ZIRP based on the same principle. Their PD clients love it!
Every time I read from posters on ZH that China screwed themselves by purchasing US debt, or that they were "taken to the cleaners" or that they are doomed/dependent upon the US consumer, I just laugh.
Chinese wisdom would fill volumes of books.
American wisdom, well, it is pretty thin.
Though we do have Mark Twain, Edward Abbey, and Hunter S Thompson.
"....the US of fabricating economic data"
100% accurate, one need only look to the balance sheets of the 10 largest US banks and their pricing of the toxic assets they hold. Also, the derivative issue along with money printing, just add more fuel to this argument.