posted on Jul, 2 2012 @ 10:49 PM
I think you are missing some of the history involved in your post. Over the last 2 decades, China has paid the price for their failed restructuring.
The Chinese currency was much higher in the 80's (when they defaulted on their debts). Back in the late 80's and early 90's, most people were
making less than 100rmb per month, but at the same time, prices were much lower. Now, the average worker in China earns about 2500rmb per month, and
that is still peanuts compared to the minimum wage of western countries. Prices have inflated through the roof, but salaries have not raised enough to
match the inflation. Many people invested their money in real estate, trying to preserve their earnings in something that holds proportional value to
the market, however, it is still just a gigantic bubble, and one day that will collapse just like the Chinese currency did. When the real estate
bubble bursts, the banks will be left holding the bill, and the people will be in debt to the banks because they do not have enough nor earn enough to
pay the banks back fast enough to cover their houses and apartments. The consequences of having to deflate the currency was transferring the debt from
cash to housing, but that does not get rid of the problem. A collapse will actually level the playing field again since most of the rich people in
China have their wealth tied up in real estate, and they are the ones who will feel it the most.