Posted on 10/03/2010 7:45:54 AM PDT by blam
China Offers To Buy Greek Debt, But Nothing It Does Can Save Country From Disaster
Joe Weisenthal
Oct. 3, 2010, 8:49 AM
China is the latest non-EU entity to specifically announce its intention to buy Greek debt, a snub to the ECB from Beijing.
Several weeks ago Norway made the same pledge.
But this particular news is no reason to be optimistic about Greece, because in the end, even massive bond buying by China or Norway (and we have no pricetags on either one), can't change the simple math, that at some point the country won't be able to keep making its debt payments, and have to restructure.
That's what the market is worried about right now -- revenues not being high enough to meet costs, which include debt payments.
So this makes for fine headlines, about China bailing out Greece, but as a practical matter it won't make a shred of difference.
[snip]
(Excerpt) Read more at businessinsider.com ...
The question now becomes what does Greece have or control that China wants?
China has a gigantic investment in the Greek port of Piraeus, through which they are hoping to channel Chinese-made goods into Europe. Maybe they are trying to protect that.
The only thing that will save Greece is massive spending cuts and so far they don’t have the will to make them. If they passed a budget that cut spending in half and everyone lived with it, the “crisis” would go away. Lenders would restructure the debt. The issue is no one wants the debt because no one believes Greece has solved its problem. Sadly, these situations usually end up in debt repudiation and revolution.
Looks like it is ships, shipping ports, and perhaps an airport.
http://www.ecademy.com/node.php?id=155320
China holds a lot of EUROs. By buying Greek debt they are betting the Euro will go up in price. They know they will take a bath on Greek debt but betting the rise in value of the Euro will be enough to turn a profit when they dump it just before Greece defaults.
That is what I was thinking. Are the Greeks still big in shipping?
Yes, but Greece barely profits for them. They pay next to nothing in taxes in Greece, or they would move to another country. China wants to get closer to sell junk to EU and maybe use them if China goes to trade war with US
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