In an interview with Caixin, Goldman Sachs CEO Lloyd Blankfein says that ‘in the long term I put my bet on China.’
He emphasized that Goldman Sachs’ support of China and Chinese banks was stronger than ever, and its confidence in ICBC had never been higher.
He expressed optimism over the country’s long-term future. “China has a fantastic population that is very educated, very dynamic, very ambitious and very commercial, so in the long term I put my bet on China.”
Why wouldn’t we take Blankfein’s bullishness about China at face value? Just because, during Blankfein’s tenure, Goldman fraudulently sold a synthetic CDO package of subprime mortgages designed to fail in order that Blankfein’s buddy John Paulson could bet against them, becoming a billionaire in the process. Or, that Goldman helped Greece mask the size of its debts when it entered the Eurozone, increasing the danger and likelihood of the eventual crash.
This is a man after all who testified to Congress that Goldman had no moral or legal obligation to inform its clients when it is betting against the products it sells them, clearly any statement he gives on a subject is God’s own truth.
Meanwhile, Paul Krugman is less enthusiastic about China’s short or long term economic prospects:
China is in big trouble. We’re not talking about some minor setback along the way, but something more fundamental. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. You could say that the Chinese model is about to hit its Great Wall, and the only question now is just how bad the crash will be.
Of course, Krugman could be wholly wrong and Blankfein could, for once, be telling the truth. One one side you have an economist who has been consistently right in his forecasts on the US financial crisis and the correct approach for recovery, on the other you have a banker who helped crash the world economy.
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