> Negative savings rates are fine, as long as capital is created and the price of goods produced by that capital is falling due to efficiency improvements.
Plain English: Theft-level interest rates are OK, as long as you have deflation.
China is not experiencing deflation, so it is not OK.
> China fixes debt deflation by printing the money and handing it to the banks in exchange for their bad loans.
To make sure that inflation occurs, yes, China prints money. This is a fine balancing act, as the article implies.
Print too little, deflation takes place and all the SOEs collapse. Panic + revolution. Print too much, you get a high inflation rate. Also panic + revolution.
Plain English: Theft-level interest rates are OK, as long as you have deflation.
China is not experiencing deflation, so it is not OK.
> China fixes debt deflation by printing the money and handing it to the banks in exchange for their bad loans.
To make sure that inflation occurs, yes, China prints money. This is a fine balancing act, as the article implies.
Print too little, deflation takes place and all the SOEs collapse. Panic + revolution. Print too much, you get a high inflation rate. Also panic + revolution.