The European (Non-)Bailout Explained (Video) … And Why Europe ‘Is Screwed’: ‘Dumb Money’ Refuses To Play Along: China State Media Says It Won’t Rescue Europe

See also:

Nigel Farage On Freedom Watch: Eventually Events Will Be Too Big For Any Bailout (Video – Oct. 26, 2011)

?- ?Bilderberg Merkel Warns Of War In Europe If Euro Fails – EU Summit Seals 1 Trillion Euro Deal – Banks Agree On 50% Write-Off Of Greek Debt

–  Euro bailout – an animated explanation (Guardian, Oct. 28, 2011):

The “Dumb Money” Refuses To Play Along: China State Media Says It Won’t Rescue Europe (ZeroHedge, Oct. 30, 2011):

A few days ago China telegraphed it refuses to continue to be seen as the world’s rescuer and the dumbest money in the room. Many assumed China was only kidding: after all how would China let its biggest export partner flounder? And furthermore, all China does is provide vendor financing, right? Well, as it turns out, wrong, because to China the current state of Europe is far from the terminal crisis Europe is trying to make it appear. This is happening even as a thoroughly desperate and grovelling Europe, kneepads armed and ready, has said via the EFSF’s Regling that it will even consider issuing Yuan-denominated bonds. Alas, China is less than impressed. As AFP reports, “China’s state media Sunday warned that the country will not be a “savior” to Europe, as President Hu Jintao left for an official visit to the region including a G20 summit. Hu’s visit has raised hopes that cash-rich China might make a firm commitment to the European bailout fund, but in a commentary, the official Xinhua news agency said Europe must address its own financial woes. “China can neither take up the role as a savior to the Europeans, nor provide a ‘cure’ for the European malaise. “Obviously, it is up to the European countries themselves to tackle their financial problems,” it said, adding that China could only do so “within its capacity to help as a friend.” A friend, who at this point is quite sensible, and realizes far better deals are to be had down the line if one merely waits. That said, we are certain China is not the only one out there with an instant notification pending the second Santorini, Ibiza or the Isle of Capri hits E-bay.


China’s Vice Foreign Minister Cui Tiankai said Friday that the G20 should focus on the sovereign debt crisis in “developed countries” and the growing pressure of global inflation.

He added that members should make efforts to stabilize financial markets and restore investor confidence.

For its part, G20 partners will also be looking to China to stimulate domestic demand, diversify its export-led economic model and allow the yuan currency to appreciate more freely so as to slim down its massive trade surpluses.

Another Chinese official has played down hopes of a breakthrough at the G20 meeting. Vice Finance Minister Zhu Guangyao, also speaking Friday, said investment in the European bailout fund was not on the agenda.

Beijing fears the financial risk of a major investment, which could also spark a domestic backlash as the Chinese public asks why they should bail out wealthier nations. Already, opposition to such a move is being expressed on the Internet, on China’s hugely popular weibos – microblogging sites similar to Twitter – and in state media.

The bold says it all. And for those to whom it is still confusing:

“China will only participate in a global program that is defensible to the Chinese people. So don’t expect a ‘bailout’ or ‘rescue’ from China,” China Macro Strategist for brokerage CLSA, Andy Rothman, told AFP.

China has been burned before on overseas investment. It bought stakes in investment bank Morgan Stanley and asset management firm Blackstone only to see values collapse in the 2008 global financial crisis.

“China was taken in. Once bitten, twice shy,” said independent economist Andy Xie, former chief economist for Morgan Stanley.

So, about that magical European box full of promises and quite empty of money…

1 thought on “The European (Non-)Bailout Explained (Video) … And Why Europe ‘Is Screwed’: ‘Dumb Money’ Refuses To Play Along: China State Media Says It Won’t Rescue Europe”

  1. China is in trouble, too. Enron accounting was exported to the world by Moody’s, and China was no exception. Enron accounting has been cleaned up if one checks on Google, but I paid close attention at the time. Enron would have a debt, say $100 million. They would form a shell company, move the debt into the shell’s ownership, but listing it as an asset. Then, the shell company would issue large work orders for Enron, so they could use them to show large amounts of income. Spinning straw into gold, it was an accounting miracle. Until the market collapsed, their growth was dramatic. When the markets went down, so did Enron because there was nothing there but debt.

    China’s economy has been built using similar methods, just like all nations. China depends on exports. Until 2007-08, the US consumer kept their mfg rolling 24/7, their #1 customer. When that dried up, the Euro Zone became #1. Europeans are adept at making do, and deferring purchases in times of economic slowdown, so China is no longer exporting massive amounts to Europe, either. China is facing their own real estate bubble, and unemployment is a growing concern for them.
    Truth is that none of the nations have as much as they claim, and the entire global economy is close to collapse. The deal they put together last week is sketchy, and the devil is in the details. Putting a band aid on a gaping wound doesn’t help much. The only thing that keeps growing at record rates are the debt levels which far exceed the amount of real money in the world. It is financial insanity.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.