Should we wish ill for an enemy?

Although the fat lady is yet to sing the Greece story is probably over. Greece defaulted on its repayment to the IMF last night. Strangely, while brutally insisting on total capitulation by Greece the International Mendacious Fund had no difficulty in finding $17.5 billion for a fascist government in Ukraine only a couple of months ago. The half government of Petro Poroshenko represents only the western, Ukrainian speaking part of the country as Russian speaking people in the east could not vote in parliamentary elections last year. The IMF has not made demands for stringent restructuring on the highly corrupt government, as it did on Greece, so the money will go down the drain. Puerto Rico is going to default on $72 billion debt and Venezuela is only a matter of time. These are tiny economies which will cause a few ripples but no big waves. But what about China? This is the second largest economy of the world and its fall will result in the mother of all economic tsunamis. Can it happen? We certainly hope so. It is an untrustworthy, hegemonic, aggressive, extremely nasty nation, sitting on top of India, developing new technologies for delivering nuclear weapons. China's stock market has entered a bear phase, having fallen 20% from its peak in June. The central bank cut lending rate by 25 basis points to 4.85%, the fourth this year. Even ordinary people were buying shares with borrowed money, called margin trading, which means that people could lose a lot of money if the bear market is prolonged. Everything depends on how the economy does. But China is a mystery. Because no other country is described the way it is. Thus, a growth rate of 7%, which would be considered exorbitant for the US, Japan or any European economy is considered a slowdown for China. Why? Admittedly it was growing at 10% plus for over a decade but surely no nation can keep on growing forever at such a scorching pace? Analysts seem unsure about how much debt there is in China and whether it will cause problems in the future. The subprime crisis in the US involved a mere $600 billion but nearly caused a depression in the world. China has over $4 trillion in reserves but the US can print as many dollars as it likes, and that is what it did with its quantitative easing programs. China has an enormous shadow banking system, a bubble in the real estate sector and another one in stocks. The government is trying to boost growth by increasing liquidity but when will credit growth become too big not to fail. If China goes into a recession, or worse, it may cause a global slowdown but a collapse of this predatory regime with a break up of the country into smaller parts is fervently to be wished for. At least the fall in commodity prices would be good for India.