sonyboy812 asked:
Can China do this just like how banks create money out of thin air via debt? Assuming the US pays back the debt, China will be richer. But, if US defaulted, it doesn’t matter to China because they just conjured up the money in the first place.
Joseph
Can China do this just like how banks create money out of thin air via debt? Assuming the US pays back the debt, China will be richer. But, if US defaulted, it doesn’t matter to China because they just conjured up the money in the first place.
Joseph
As far as I remember they conjure a lot of hard good and get paid with American airy money.. and then they lend it back to America.
Comment by Aleks — February 13, 2008 @ 4:37 am
I believe they’d have to have an equal amount of gold to back up the created money, or it isn’t money, just paper.
Comment by Kat. — February 14, 2008 @ 6:48 am
Banks don’t create money of out thin air. They have deposits from people with savings and checking accounts. They loan out this money…
China could loan dollars out too. They have a bunch of them from US people buying more chinese goods than chinese buy american goods.
good luck!
No one can just ‘conjure up money’. That isn’t the way the systems work.
Comment by Rush is a band — February 14, 2008 @ 11:05 am