Second key point. During the credit crisis, yes, China built these ghost towns. Do you know why? Again, they opportunistically took advantage of cheap labor costs. They built these massive cities when raw materials were being given away and when china laborers were willing to work for nothing. If they wait for everything to be rosy labor costs will skyrocket and raw materials will be in short supply. They built these cities in anticipation of their future growth. I only wish the US had this kind of vision. Instead here we buy the highs and sell the lows and use debt to make up the difference. Bloody brilliant. By optimizing their labor input during the recession they might just be able to use expansionary monetary policy in the future if needed without having to worry about skyrocketing labor costs adding to inflation. China knows those ghost towns will be filled. In fact, more then filled. Our gov't should really be learning from them. And 50 years from now, kids studying economics will be reading about the "China Model" and how well they made it work. As a trader, you have to admire what they are doing. As a US citizen, I'm not going to be happy that they will own all the raw materials in the world in the future when the rest of the world will desperately need them. Guess who is going to pay for that? We will. The sign on the proverbial China door will simply read "We Appreciate Your Business. Come Back Soon"
