A solution to the US Economic problem - Chinese just have to have more kids

With Lehman sinking, AIG failing and now Reserve Money fund faltering, someone had to ask:


"Just wanted to ask you that how come lehman brothers could lend US4 600B to real estate with US$ 30 bln capital footing ? there must be some prudential regulation set by central bank or sec of USA regarding mantaining certain financial ratios or percentage of lending against capital base or backed by deposit? or even cap on lending x amount of money t a specific sector...

would appreciate if you shed some light on this being the expert..."

Such a complex financial question deserves a serious response so here goes:

"Good questions all.
Lehman is another example of the US being run by idiots.
The Regulators who regulate the banks ignored them because they didn't think that the banks were behaving badly by taking on bad loans and then parceling them out to investment houses like Lehman. Lehman also thought that stupid investors would keep buying their packages because they "very smartly" split up loans into smaller pieces, then bundled the good, the bad and the ugly loans together and convinced themselves and the investors that this reduced the risk without really understanding what the risk was. Result. The ugly loans crapped on the bad loans which blew out the good loans leaving Lehman and the rest of the US with blown out crap.
Now the US govt has a blank check to bail out these brokerage houses but the checks they are writing is from the money borrowed from the Chinese and the Japanese.

So the math is something like this. Every Chinese has now lent a $1,000 to his Uncle Sam ($1,000 x 1,000,000,000) or a total of about a trillion dollars. The American appetite however needs more money and this economy is incapable of supporting itself at this level.

So the solution, with the increasing appeal of the even more stupid leaders (McCain and Palin) to the populace (they are looking for a down to earth person who speaks in a folksy tongue), I believe the day is not that far away when the US will demand that the Chinese have more children so that they are able to lend more to the US.

Confused?

Well here is the Math, if each Chinese lends a $1,000 to the US, and you just get the Chinese to double their population, China will be able to lend twice as much. In other words the US can then borrow 2 Trillion fom the Chinese and continue to spend happily for another couple of years. After that I guess the pressure will be on the Japanese (who have lent almost as much) and when the Chinese and the Japanese are worn out, and the Viagra has stopped working, by then the US hopes that the Indians are on line and ready to produce more kids so that the US can borrow from them.

Make Sense! So did WMD in Iraq."