Wednesday, August 26, 2015

China’s Stock Market Tumble And The Outlook For The Global Economy — Dasha Chernyshova interviews L. Randall Wray

The US is the pivot point, not China.

Probably the most interesting aspect of the post is that Sputnik chose to interview Randy. Maybe the Russians are figuring things out.

New Economic Perspectives
China’s Stock Market Tumble And The Outlook For The Global EconomyDasha Chernyshova, Moscow reporter for the Sputnik News Agency, interviews L. Randall Wray, Professor of Economics, University of Missouri at Kansas City


Matt Franko said...

" It is relatively easy to resolve through government creation of replacement jobs—largely in the public services and in infrastructure investment—but governments won’t do it out of fear they’ll “run out of money”.

Wray nails it imo... lets not make this more complicated than it is...

We have masquerading ideological boobs in positions that require qualified technocrats...

Dan Lynch said...

"Lots of Chinese middle class households have extra cash .... They can lose it without much if any impact on their won’t have much impact on their spending."

Debt deflation & deleveraging will have no impact on spending ??????????????

It's my understanding that China's private debt is mostly business debt not household debt. It's 1929 in China.

Otherwise Randy's analysis is spot on. " we’re all pretty much screwed." Can't argue with that.

Tom Hickey said...

Randy is talking about retail investors in the equities market.

Firm debt is another issue. Some of that is in publicly owned firms, which the government can absorb. Some is not.

Any debt issue can be dealt with by providing liquidity as the Fed showed with the US financial system. As Randy previous showed, the Fed rolled over 30T in short term liquidity provision to the TBTF's over several years. Japan did the same thing at the time of its banking meltdown in the 80's. The PBOC is obvious aware of this. So we'll see how they do.