This week our travels take us to China, in search of what's really going on with the 'miracle economy', we wade further into the GFC mire, and we look at the sad plight of the millionaire mortgagee.

How do we solve a problem like China? As The Guardian’s Heather Stewart points out, "barely a week goes by without yet another stunning fact from the Chinese economy." This past week, the big news was the order from Chinese authorities that some of the country's big banks curb lending. This small effort to cool things down has, in turn, unleashed an avalanche of speculation about the underlying fragility in China's economy and, more specifically, whether it has gone all bubbly.

So has it?

MoneyWeek editor-in-chief Merryn Somerset Webb says yes, with bells on. Why? "Because, right now, it rests on about the most unstable of foundations there is: rampant credit growth... In the first five working days of January alone, China's commercial banks are said to have lent out the equivalent of more than $US50 billion. Not good."

Reformed Broker Joshua Brown says duh! And writing on The Faster Times he's getting all shouty about it: "There IS, in fact, a property bubble in China, it is utterly undeniable. Close your eyes and repeat this phrase however many times it takes until you are able to sober up: THIS TIME IT IS NOT DIFFERENT." Get past the shouting and you'll find Brown has some interesting/alarming "factoids" that do, indeed, make the China story "read like a Dubai article from 2008 or a Malibu story from 2005 or (brace yourself) a report from Japan circa 1989."

Or is it more like the property boom in the UK city of Manchester in 2006, wonders Webb. "On YouTube, you will find an amazing film from Al Jazeera on the city of Ordos," she says. "It is newly built, and could be home to a million people. Instead, it's empty. With property prices rising 50-60 per cent a year in some areas, its houses have been bought by investors expecting to make a return without having to bother with pesky tenants."

Even Jim ‘bah humbug’ Rogers seems to be getting a little concerned, says Tim Iocono on Seeking Alpha. "After lambasting Jim Chanos in recent days about his calls for a China collapse of epic proportions (Dubai times 1,000 was the characterisation), Rogers seems a bit less sure of himself ." Rogers, the author of "A Bull in China" told Bloomberg: "Certainly, Shanghai real estate or Hong Kong real estate should decline... My goodness, if anything’s in a bubble in the world, that and US government bonds are certainly very overpriced... China now realises that they’ve created too much money, that prices are going up too much and they’re trying to slow things down... Let’s hope it works."

Meanwhile, Gerard Lyons, chief economist at Standard Chartered and regular visitor to China, is a little bit more upbeat. Talking to The Guardian's Stewart he says, "if you're going to pick an economy that's going to come out of this well, it's China." But it's not going to be a smooth ride, he adds. "The West has to realise there's a business cycle in China."

But for the definitive word on China's real estate bubble, we give you... a Somali pirate's view. Says Shanghaiist's Cary Hooper: "One of Sina BBS' most recent hot posts is a letter from a supposed Somali pirate, who's both inexplicably angry at real estate developers for exploiting the Chinese people and envious of their exploitative tactics." Says the so-called pirate: "Rich or Poor, everything is under your control, and this type of meticulous plundering, this spirit of total consumption, should be studied by bandits and thieves all around the world." Phil Angelides couldn't have said it better himself.

Daddy, what's a financial crisis?

A week after the commencement of America's FCIC hearings the philosophical musings around the global financial crisis – What is a GFC? What caused it? What will fix it? How can we stop it from happening again, like, next week? – continue to abound. Here's some of the thinking that's getting around...

When in doubt, blame foreigners. "That's foreigners, as in non-United States," points out FT Alphaville's Tracy Alloway. And that's the theory espoused by MIT economist Ricardo Caballero and touched upon by Time magazine over the weekend. The Chilean Caballero "is not absolving American bankers and regulators," says Time's Stephen Gandel, but he does think that too much time has been spent "grilling Wall Streeters", and not enough on examining the real culprit – global imbalances. We know some people who would agree.

"Congress [is] trying to create new regulations, but not asking where the pressure was coming from to create these products," says Caballero. "In terms of formulating a solution, just looking at the US financial system is not the answer."

And while we're at it, why not pin the recovery on someone else, too? And why not make that someone else China? The Guardian's Larry Elliott says that unless China takes dramatic action to rebalance its domestic economy, the whole world economy will become "like Japan after its bubble burst."

Meanwhile, Billy Bragg is mad as hell and not going to take it any more. Or at least he's not going to pay his taxes any more. At least, not until someone does something about those bleedin' bankers! Bragg's tax rebellion was inspired after seeing RBS executive director Stephen Hester "smirk as he told a Commons select committee that, rather than explain to the public that he was about to pay his staff an estimated £1.5 billion in bonuses next month, he'd avoid the ensuing rancour by sloping off on holiday for a long while." Writing in The Guardian, Bragg says that "watching Hester's 'let them eat cake' moment on TV" left him feeling "outraged" and "powerless." So he's taking the power back, with a little help from his friends.

Over the way in New York, Paul Krugman has his own suggestion to help curb bankers' enthusiasm: "Can we make chutzpah a crime? Because if we can, we can send a bunch of bankers to jail right away." Krugman is referring here to the report that the Wall Street folk have hired a Supreme Court litigator and are considering challenging the Obama administration's proposed bank tax, on the grounds that it would be unconstitutional. "This isn’t quite the classic definition of chutzpah," says Krugman, "which is when you murder your parents, then plead for mercy because you’re an orphan. It’s more like being a drunk driver who, after killing a number of pedestrians, received life-saving treatment at a nearby hospital – and responds by suing the doctor. I’d say it was unbelievable, but it actually should have been predictable."

And finally, for all you teachers and parents out there looking for a way to explain the GFC to the kiddies, Jamie Dimon has it covered. The JP Morgan chief told a tender tale to the FCIC last week, about his daughter calling from school to ask, 'Dad, what's a financial crisis?' And, as any responsible investment banker/parent would, he replied that it was "just something that happens every few years," says Max Abelson in The New York Observer. Said Dimon to his daughter: "It's not a mystery. It's not a surprise." So there you have it. No need for an inquiry at all, really.

You know it's a recession when...

As the dishing out of the not-so pared back Wall Street bonuses commences, one might be forgiven for feeling a bit of Billy Bragg-style angst toward the rich. But don't hate them too much, says Les Christie on CNNMoney, cos "the wealthy have money problems, too – yeah they do." Apparently, getting oneself a multi-million dollar "jumbo loan" can be nigh-on impossible these days, "thanks to skittish lenders."

So unfair. Or is it? It seems quite a few richies have fallen behind on their loans lately. "About 12 per cent of US mortgages of $US1 million and larger were late this fall," says Christie. That is "twice the rate for loans under $US250,000 and nearly triple the default rate on million dollar mortgages 12 months earlier," according to Californian research group First American CoreLogic.

To illustrate the problem, Christie relates a sad tale of a "self-made man" who had done a few slightly tricky things with his $US8 million-worth of assets, including putting much of the proceeds from the sale of his business in a charitable remainder unit trust that paid him $150,000 a year, against which he then took paper losses in his stock portfolio, thus lowering his taxable income... Anyhoo, it turned out that when he came to borrow money, "the loan officer didn't understand it... and the bank declined the loan."

Where is the justice? And don't even get us started on the hassle of getting mortgages for second homes!

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