Head Of China Sovereign Wealth Fund Voices Displeasure With China's Debt Slaves, Calls Europeans "Lazy" And "Entitled"

Tyler Durden's picture

Two weeks ago, Marc Faber provoked the fury of a broad segment of the population by daring to tell America that it is lazy, needs to work more, and is overly-reliant on a welfare government which is an eager parasite of the welfare system cocoon in which it has wrapped the majority of the population knowing full well it can get away with anything due to threats it can pull the (otherwise insolvent) social safety net at any given moment if the status quo is threatened. Needless to say, European readers were delighted and amused by Faber's statements. We wonder, then, what the US (and correspondingly, European) response will be to the news that last week it was the turn of Jin Liqun, chairman of the China Investment Corporation (CIC), the sovereign wealth fund all too often (by the overeager European media) tasked with bailing out, to channel Faber: "Europe is not really short of money. Europe needs to give a clear picture to the Europeans themselves and to the rest of the world that their problems could be worked out. The root cause of the trouble is the over-burdened welfare system, built up since the Second World War in Europe - the sloth-inducing, indolence-inducing labour laws. People need to work a bit harder, they need to work a bit longer, and they should be more innovative. We (the Chinese) work like crazy." Translation: China is finally announcing that it is unhappy with the work output of its debt slaves. And since China, courtesy of its trade surplus or something, will sooner or later also have to apply the same bailout hypermathematics which indicate that despite having to bail out its own banking system it can bail out the world, expect comparable announcements about its latest shipment of debt slaves situated conveniently between the Atlantic and Pacific oceans.

More on Liqun's displeasure with his subordinates via the Telegraph:

"European countries have a lot of advantages. They just need to tap these advantages and they will be back on their feet."

 

This is not the first time Mr Jin has aired his views on the inner workings of Western economies.

 

Last month, at a forum organised by The Economist magazine, he said he was "concerned about the unravelling of the situation" in Europe.

 

He told guests he was "sorry if I have ruffled feathers", adding: "China cannot be expected to buy into high risk in the eurozone without a clear picture of debt work-out programmes."

 

Mr Jin, a graduate of Boston University, was formerly China's deputy finance minister and vice-president of the Asian Development Bank.

 

He is now chairman of CIC, China's sovereign wealth fund, which has a budget of around $300 billion.

And further clarifying what Liqun meant, especially with the sloth reference, here is JPM's Michael Cembalest with some very provocative insights:

For the benefit of our urban clients, a sloth (megalonychidae) is a slow-moving, tree-dwelling animal that sleeps 15 hours a day and is covered in beetles. There are many ways to react to this: a wake-up call for the West; an unfair diatribe, given China’s currency intervention which arguably contributes to the economic challenges facing the US and Europe; or a reflection of inevitable wage convergence, driven by 2.6 billion people in China and India entering the global workforce after decades of self-imposed isolation. Whatever the truth is, Jin’s comments seem in sync with other Chinese assessments of Western fiscal policies (see August 6th article in Xinhua: “China, the largest creditor of the world's sole superpower, has every right now to demand the United States address its structural debt problems and ensure the safety of China's dollar assets.”).

 

To stress-test Jin’s assertion, we recreated a chart from Eugene Steuerle, former Deputy Assistant Treasury Secretary for Tax Analysis, now with the Urban Institute. He calls the chart a measure of “fiscal democracy”: the degree to which Congress can spend revenues not already committed to mandatory programs. In 2009, for the first time, all US government revenue was pre-committed to mandatory spending (social security, healthcare entitlements, farm subsidies, unemployment insurance) and interest. After a brief rise over the next couple of years (due to projected declines in unemployment insurance), it is estimated by the CBO to fall back to zero again. The chart confirms the post-war shift to a more entitlement-heavy economy, a shift former U.S. Comptroller David Walker describes as crowding out the kind of productive discretionary spending needed for the US to compete against China and India.

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firstdivision's picture

Why did he leave the US out of this?

Well at least he cannot call Noda "lazy".  Yen intervention will occur soon.  About to breech 76...

spartan117's picture

Because he needs to find stupid buyers for those Treasurys first. 

LawsofPhysics's picture

I would say this goes a bit further than treasuries.  The Chinese still need the Americans to do some more dirty work in Africa.

Oh regional Indian's picture

Very Astute observation LOP. Very hard to tell, in this maze of levers, who is pulling whose, eh?

ORI

Omens and Nuclear Echoes Coming Up

Big Slick's picture

OK! OK!!... I GET IT!!!  THE SKY'S GONNA FALL!!!!!  SO WHO CAN GIVE ME EXAMPLES OF SPECIFICS OF WHATS GONNA HAPPEN.  LIKELY MODELS? HISTORICAL EXAMPLES?  POSSIBLE SCENARIOS?  I'M NOT LOOKING FOR A WITTY DRIVE-BY COMMENT AND THEN ON TO THE NEXT THREAD, BUT REAL ANALYSIS OR A LINK TO THAT ANALYSIS.

redpill's picture

Let's start with turning off caps lock and going from there, mmk?

dlmaniac's picture

Hard to tell which is the hardest among asking :

 

  1. Obama to be less dishonest.
  2. Wall St to be less fraudulent.
  3. Liberal welfare addicts to be less lazy.
spiral_eyes's picture

Thanks for this Tyler.

China has the power to break America by dumping treasuries. I think if their real estate crash gets bad, they will panic and start selling treasuries. America can't bribe and blackmail the world into buying its debt while it has a free linch forever.

http://azizonomics.com/2011/10/18/china-hysteria/

gmrpeabody's picture

"free linch"..., Freudian slip?

ElvisDog's picture

China might dump treasuries, blah, blah, blah.

That prediction ranks right up there with "Israel is going to attack Iran" for the most over-used, never-achieved prediction on ZH. In the words of Montgomery Scott "If my grandma had wheels she'd be a wagon"

AnAnonymous's picture

No. The sky'snt gonna fall.

What is going to happen is known though, as it happens the same every time when expansionists reach that stage in expansion.

The exterior cant provide more expansion opportunities. The only place left to expand is toward the interior.

A new wave of colonization is taking place as the concentration of wealth and the not corresponding valuation of labour makes it less and less possible for people to affor living in the place the wealth is concentrated.

The Chinese is wrong. It is not a matter of laziness, of hard work or this or that.

It is simply that by concentration of wealth (smithian economics), some activities are being expelled from locations because the environment is too pricey to support the activity.

You dont perform greasy mechanics work in a Hilton suite.

Activity in smithian economics look for adequate environment. The west environment is no longer suitable to host many kind of activities. You can take a sweeper job to work on Park Avenue, but the sweeper job pay does not enable you to live on Park avenue.

It is the way it is.

Raging Debate's picture

Very good An Anon, thank you for adding value. The reality is, the end game for ALL is very bad in every country, the miscalculations and not factoring in the rate of business means the gaps can't be closed fast enough to avoid major war between three economic zones. Loss mitigation is the only strategy for individuals or individual governments. Each leader shall have many choices of lessers of evils to pick from. Best of luck to you and keep adding value.

lemonobrien's picture

We start by executing all those who type in ALL-CAPS, cause..well, you know.

 

buyingsterling's picture

It's called a debt-based social collapse. All western governments are flat-ass broke, but have made innumerable promises to take care of their citizens via cash payments. The ponzi has inverted in most of these countries; their governments have been reducing their fertility deliberately for years, and entire societies built on entitlement and guilt are seeing their populations collapse. The only end game is to pull the plug on the system, or to dilute the currency until it eventually becomes valueless. The .01%'s system of looting through debt has imperiled everything within their sphere of influence.

saiybat's picture

This sums it up well put. The whole thing is about demographics. The best ponzi in the world can't have one tax payer pay the way for two elderly. If they wanted to keep the welfare state going they should have been having more kids otherwise what you get is a bunch of old people and not enough workers to pay for it all. There's nothing that can be done about it. Unless there's a massive baby boom across europe right now there's going to be a demographic correction within two decades. That's not going to happen and the old are fucked and the governments took most of their money through taxes assuming the social safety net would still be there. It's not going to still be there and there will be a huge portion of the population dependent on the system.

 

There's three possibilities of what could happen; the ponzi collapses and millions suffer especially the old, a fanatical purge of "useless eaters" to protect the ponzi even more millions suffer, or people become self sufficient before the ponzi collapses and not as many will suffer. It's real bad.

smlaz's picture

Welcome to National Socialism circa 1933.  Kristallnacht anyone?  Except this time it'll be the 99% worldwide.  The 1000-year Reich won I'm sorry to say...

Raging Debate's picture

A four dimensional Reich empire is only capable of sustainability with 4d tools. If a Quantum Computer existed today it would merely tell you the best game is not to play (at least at this level).

Your witnessing the continued collapse of the global financial system. It is actually bad news for all and nor can it be solved with pyramiding up before major hostilities break-out.

I view my entire line of work as attempting to reduce the physical loss of life from 50% to zero, although predictability tells me we will land somewhere in the middle, 35% casualties. Better to be willing to die for all then die for being led off a cliff and fight for East or West titans. I do feel very optimistic for the high time that comes afterward. I am not exactly the martyr type either. I intent to survive through it to see the other side.  

saiybat's picture

If? Quantum computers do exist.

 

Super computer predicts revolution

http://www.bbc.co.uk/news/technology-14841018

This particular computer isn't quantum but the technology does exist.

 

Quantum computing device hints at powerful future

http://www.bbc.co.uk/news/science-environment-12811199

 

This is what they give us for public consumption. Considering that the military has kept technology secret in the past only the tell the public about it years even decades later there is a real possibly that they do have fully functioning quantum computers.

 

 

Rynak's picture

Quantum computing is so overhyped that it isn't funny anymore. People think of it like "magic" without understanding what it even means.

Wake me up when they replaced "circuit boards".... THAT's gonna be the breakthrough, not quantum computing, as cool as it's name may sound (quantum computing could - if only they could produce it cheaply - massively increase memory capacities.... but it's potential regarding speeds, are much less impressive.... MUCH less impressive than you imagine).

 

Financial_Guardian_Angel's picture

Call me crazy, but when I want examples or possible scenarios I do the research myself and draw my own conclusions.

If you want someone to do you a favor, YELLING AT THEM IN CAPS is not the recommended method.

(Witty drive-by comment mode off)

earleflorida's picture

reverse psychology is the inverse of pi^ which can't be eaten sliced, or diced, but only swallowed whole with the core thesis mired in dual ambiguity

cossack55's picture

If you need to ask for historical examples, well, you are just too late to the game. Good luck.

AnAnonymous's picture

Not hard to tell.

The predatory US is performing its dirty work for nobody than itself as it is a US world order but can not control fully who is going to eat carrions.

China is a scavenger. They've developed on the side, eating what the US could not eat.

trav7777's picture

perhaps he'd like to compare CHINA's innovation to Europe's....who stole whose high-speed rail and whose crashed and is now effing mothballed due to the fact it is a complete piece of shit?

AnAnonymous's picture

Train crashes happen everywhere.

The Chinese train is quite impressive though.

It is US citizen mind like Fukushima accident. Chernobyl has to be worse not because it is worse but it is the symbol of USSR. USSR did not get its stuff right.

US citizens like Japanese do that stuff right. When they fail, if they fail, it is always on a smaller scale.

Another string in US cheap propaganda and Japanese will follow US citizen common procedure: export their radioactive shit onto a third party to claim nothing went wrong.

earleflorida's picture

let's not get all patriotic here - after all who originated 'yellow journalism'?

High Plains Drifter's picture

urine is yellow. does that count?

ElvisDog's picture

Just curious, AnAnonymous, what country do you live in? I have a suspicion that you are a robotic troll algorithm that has gained sentience.

bob_dabolina's picture

Ever see an Asian in Casino? 

That shit can get INTENSE. They have NO problem losing money. 

High Plains Drifter's picture

asian home owners always try to fix something that goes broke in their houses. then when they can't fix  it, they call someone else to fix  up the mess they have created.  also, when you get there, they want you to hurry up and fix  it so they don't have to pay any extra time etc.........never fails.....

earleflorida's picture

the dynasty familes still control china -

the yellow oligarch have been around since paper, gun powder, and sea faring navy's   

kaiserhoff's picture

China and India are the biggest thieves of intellectual property in the galaxy.  If the great unwashed want to talk about innovation, that's a damn fine place to start.

Libertarian777's picture

shit you're so right.

I mean they stole:

1. the world map

2. paper

3. gunpowder

4. the printing press

5. the compass

6. paper currency

7. the seismometer

8. toilet paper

9. the wheelbarrow.

from the ummm... umm... Americans... yes, Americans, back in umm... ummm... 6th century AD.

kaiserhoff's picture

Let's at least get into the twentieth century.  Both countries flatly refuse to enforce copywrite or patent rights of the their trading partners.  Digital theft has devastated the value of music and film libraries, and the criminal class at the top makes that easy.

Raging Debate's picture

Yes Kaiserhoff and now you have instutional investors showing up at ZH scratching their heads as to why the content isn't better.

buyingsterling's picture

"The predatory US is performing its dirty work for nobody than itself as it is a US world order"

It sure seems that way, doesn't it? The US is a tool. You have some time on your hands, check out the free audio stream at infowars.com. Alex Jones sees that our government is an agent of evil, but also knows it's not really our government, it's been hijacked.

AnAnonymous's picture

I would say this goes a bit further than treasuries. The Chinese still need the Americans to do some more dirty work in Africa.
////////////////////////////////////////////////////////////////////

No. The US is predating for itself. Cant prevent scavengers from scavenging though.

Raging Debate's picture

An Anon, this is incorrect. The U.S. President Richard Nixon and U.S. diplomat Henry Kissinger deployed the Ping-Pong trading strategy with China in 1972. Trading relationships require financial framework - Central Banking. The Chinese readily welcomed the Golden Calf in. The Chinese people experienced an increased quality of life as the U.S. worker went down. The reason the U.S. does everybodys dirty work is because the U.S. is the global reserve currency. Part of the responsibility that goes with the privalages is protecting global trade. That does of course often entail violence, overt and covert intelligence operations.

The global reserve currency already exists, they are called SDR's. There were four deposits made from multiple Central Bank franchisees that begin around this same time as Ping-Pong strategy. I think the first one was $13B if I recall correctly. But three more have been made since. The Yuan is considered the new reserve currency but it has some natural and artificial limitations on the prize piece of the puzzle. Either way, what you see China doing is preparing new security arrangements with Western & Russian Financeers, though I must be careful with how much I opine about Russia, because I don't know nearly as much.  

As this system finishes collapse, WW3 ends and the world is building next generation evolutions in banking, I can say for certainty that all currencies will float. It is the currency peg prize that leadership lose their heads over through greed and lack of periods of detente. The Chinese leadership played a great hand this time around in history but they also got too far ahead of themselves. I wish the people of China well, the citizenship were worked into near-insanity and this sucks. You already recognized Americans weren't lazy. What leadership could do is connect East/West citizenship together over the Internet now which will mitigate loss of life in war later. Both China and America remind of a spicy marriage. The love-fests periods are usually decent (except when imbalances purposely linger) but the lovers spats are brutal. But I don't see much long-term value in a bigger spat this time, however things can get out of control quickly.

buzzsaw99's picture

People need to work a bit harder, they need to work a bit longer, and they should be more innovative. We (the Chinese) work like crazy." Translation: China is finally announcing that it is unhappy with the work output of its debt slaves...

 

We are working, we're working at exploiting Chinese labor. Chinee so smart. heh heh

spartan117's picture

And with all those worthless reserve currency dollars they make, they use to buy up commodities around the world, that in turn, are used to build up their infrastructure.  While the USA gets a lot of worthless junk in return.  Man, those dumb ass Chinese!

buzzsaw99's picture

funny, that's probably what the maid thinks as she scrubs my toilet(s).

spartan117's picture

Your toilet(s), and the home they reside in, are about to be repossessed by your banker.  The banker will then sell the house to the maid, and give her a visa. 

buzzsaw99's picture

hahahahahahahahaha!

hahahahahahahahaha!

hahahahahahahahaha!

:inhale:

hahahahahahahahaha!

hahahahahahahahaha!

hahahahahahahahaha!

 

you must be a pissant peasant too if you think along those lines.

 

hahahahahahahahaha!

hahahahahahahahaha!

hahahahahahahahaha!

:inhale:

hahahahahahahahaha!

hahahahahahahahaha!

hahahahahahahahaha!

spartan117's picture

Well, I can't argue with such a well thought out retort. 

buzzsaw99's picture

Your comment was worthy of more? I think not. Lick my balls and wipe my ass with your tongue while you're at it.

spartan117's picture

Well, if you can't argue a point, I guess it's time to allow the conversation to devolve. 

Thanks, but no thanks, I'm not into gay sex.  Enjoy the chinese made dildo sticking out of your ass.

buzzsaw99's picture

closet case, i understand. killjoy.

MsCreant's picture

Both of you boys calm down and eat some nice ice cream--Schweddy Balls flavor. That way everyone gets to lick something and you both can Chill.

http://www.benjerry.com/flavors/feature/schweddy/