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[zchris13]

... As I said, it's not the most rational of opinions.

[Lord Shonus]

Actually, china has a potential reason to annex North Korea if the Kim regime collapses. Civil war in a country on your border that may have atomics is very dangerous, and invading might seem a palatable alternative, if you think you can secure the area quickly enough.

[Aqizzar]

Or, China could just lock off its border exactly as it's doing now and let the spillover be South Korea's problem, and hope the probably one working nuke the DPRK has goes off somewhere outside China.  I sure the North Korean military apparatus that actually runs the country has plenty of contingency plans for when Kim Jong Il dies (by the looks of the guy, he could OD on heroin any day now).  More than likely they'll just claim he's gone ill or meditating or something, and no one in North Korea will actually know he's dead for years.  Remember, most of the populace honestly believes Kim Il Sung invented the automobile and walked on the Moon.

[Cthulhu]

Also, he was carried off by birds when he died, but the people of Korea collectively flipped out and they had to bring him back.

[Lord Dullard]

Yeah, I'm going to have to agree that it would probably be a cold day in hell before China just... randomly invaded North Korea unprovoked. They stand to gain relatively little, they'd look like dickheads (as I mentioned before, China is NK's most important ally) and probably lose a lot of diplomatic cred, and they'd be tangling with a huge army (even if it was a disorganized army). China already has a huge population and a lot of land and NK doesn't offer much else, being horribly underdeveloped. It'd probably take years and huge sums of money just to integrate them into Chinese society.

[Lord Shonus]

I never said it was likely, I simpy pointed out that there are some valid reasons that China could consider NK a threat, even taking the massive power difference into account.

[Muz]

Hmm.. so if every country holds some debt, then can't they cancel each other's debt? Like USA owes UK $20, UK owes Japan $50, Japan owes USA $10, then they just give each other money until Japan doesn't owe anything.

But then who's the one who's not holding any debt?

[Aqizzar]

Each other.  Haven't you been paying attention?  Actually, it's not that governments own each other's debt, it's that independent (more or less in cases like China) banks in other countries own a government's debt.

[Neruz]

Debt is actually just as good as cash when it comes to macroeconomic flow. Major economics has been so far divorced from using actual money as exchange that i get the feeling more than a few economists look down on currency as an inferior and outdated concept.

[Aqizzar]

Dumb economists, yes.  They're really two different worlds that filter back into each other somewhere around the Goldman Sachs level.  Kind of like Einsteinian physics and quantum theory.

[Neruz]

Well the majority of modern economics are founded on heavily flawed assumptions (that have been conclusively proven flawed and wrong no less), so most economists are by definition dumb.

[Dwarf]

So, we will agree that China will probably not invade anything of Korea and will simply continue to be the economic powerhorse which could screw us all over anyway if they wanted.

But still, can somebody explain to me WHY current economics seem to work on debts?

[Cthulhu]

It's fun that way.

"Hey Ireland, I need 500 tons of beer, if you hand it over I'll absolve 2% of your debt or whatever."

"Alright, hey Spain, I need 500 tons of beer mugs, if you give me some I'll take on 500 tons of Spaindollars in credit"

Seriously, though, it's more credit than debt.  Countries trade credit rather than cash.  I'm not sure why, it may be because virtual money doesn't cause inflation?

And honestly, that's what money is too.  It's no longer backed by gold, which has its own advantages and disadvantages, but at a time money was just an IOU for a specified amount of gold.  People just got to trading those instead of actual gold; because gold is, like, heavy and stuff.

[eerr]

Well the majority of modern economics are founded on heavily flawed assumptions (that have been conclusively proven flawed and wrong no less), so most economists are by definition dumb.

Economics is not based on heavily flawed stuff.
It's based on generalizations, and also a highly critical math portion.

Quote me an example.

[Neruz]

Well the majority of modern economics are founded on heavily flawed assumptions (that have been conclusively proven flawed and wrong no less), so most economists are by definition dumb.

Economics is not based on heavily flawed stuff.
It's based on generalizations, and also a highly critical math portion.

Quote me an example.

Modern economic theory is based on the flawed foundations of General Equilibrium, which assumes, amongst other things, infinite supply and demand so as to achieve the perfect balance (hence why it's called General Equilibrium).

If you want to read more, here is a supurb book on the subject. You can find most of the book on google ebooks for free.