You may remember three or four months ago when the Chinese were supposed to save the European Union. In other words, the Chinese would become the lender of last resort because they did not want to lose the European market for their exports. It is true that Europe accounts for almost 20% of its exports and therefore it was logical that China was concerned about the euro crisis. While that may be true, the Chinese aren’t stupid with their money, but the Anglo-Saxons seem to be. Okay, so let’s talk about this for a second, okay?
You see, I thought it was kind of absurd to think that China would come to the aid and save the Europeans and their economy, and further support your socialist black hole digging effort. However, it made big PR headlines and came just before the G8 summit, which was about to severely punish China for manipulating the currency. China agreed and let the rumor continue without any interest in helping those who make stupid policies from destroying themselves.
At this point, I think we can put all those rumors to rest, the Chinese are not going to bail out anyone, as they are going to try to bail themselves out with the addition of a couple of hundred million dollars in new stimulus. for seven industries and 20 subsectors that they would like to own in the global market. In case you think that there is still a chance that the Chinese will come to the aid of the EU, the ECB, the euro and the euro zone, it is time to think again.
The Wall Street Journal reported in the May 30, 2012 “Chinese Banks Back Off Europe” by Ken Brown and Lignling Wei that although China is looking to buy energy assets in Spain, we should not expect them to come to the rescue of Spanish banks. , or help stop the run on these banks as public sentiment becomes too pessimistic for the inevitable ongoing slow-motion train wreck. After all, as the article duly mentions, Chinese banks had been badly burned by Lehman Brothers and other investments during the 2008 US crash.
By the way, the Spanish banks should not expect any help from the ECB, which knows that it does not have the means to become the lender of last resort for everyone, and a domino effect could make such a large loan or bailout package useless, and costly to take away its credibility and strength. The ECB cannot be blamed for its conclusion or decision on this.
Needless to say, it looks like it’s time for talks in the euro zone to get a little more serious without the political rhetoric, populist uprisings, or pointless debate. If they don’t stick together now, it will all come crashing down. Why would China want to be a part of that? In fact, this latest episode of banking problems in Spain is just the tip of the globally overheated iceberg in the euro zone. In fact, I hope you will please consider all of this and think about it.
