Can China create money out of thin air and lend it to another country to make money?
Posted by admin @ Tuesday, Mar. 31st 2009
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.
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.
Posted in Personal Finance
April 2nd, 2009 at 4:53 am
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.
April 2nd, 2009 at 7:29 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.
April 4th, 2009 at 8:54 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.