The China Bubble

Quote from drsteph:

A huge % of bank loans in China will never be repaid due to the natural corruption of the Communists over there. Biggest banking crises in the world awaits.

3. And how does that differ from a)Japan's corporate funding via MITI in the 80's, b)PBGC & S&L bailouts in the USA, c) writing off 3rd world debt? If the other bank loans DO get paid off and the good loans outweigh the bad, who cares? Not like the renmibi is freely exchangable anyway.
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it's not different. china will roll the bad debt into inflation. and we've simply rolled our bailouts into our national debt. same thing.

are you assuming governments can roll that debt forever?


re: Japan. the only reason for no inflation is the yen is tied up in us bonds. money not in circulation will not cause inflation. our "deal" won't last forever though.



interesting that walking down the street today i actually threw my pennies and nickles away. (as i do everyday) their usefulness is less than the burden of weight in my pocket. (i'm borderline on throwing them in the trash vs. the street. can't quite decide where that line is, but leaning towards trash lately)


wait i forgot... this is deflation. the dollar the fed is printing and making available at 1.99% interest in unlimited amounts will actually be MORE valuable tomorrow.
 
Quote from yeayo:

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"Showcases" like Shanghai, can't hide the fact that 99% looks like America in 1800.

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You obviously never looked at street pictures of NYC dating from 1900.
 
Quote from ktmexc20:

:p It's in his name... yeayo slang for cocaína
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Hahaha that's hilarious.

Hey but seriously, it's pretty obvious to anyone who does their research outside watching mainstream "business news" such as CNBC that China is mostly full of crap. Sweatshops running on razor thin margin, supported by 50% bad loans & foreign overinvestment is far from a winning formula in a business sense. It is, however, a great formula for growing employment and moving peasants from the countryside toward urbanization & industrialization. China's main concern is employing the population and I notice that the government seemed to have fused the tactics of Stalin's forced industrialization with the capitalist ways. A whole separate topic but the main point is that the "growth" in China is not fueled by Domestic profit but the government drive toward employment of the masses.

The bubble should deflate but it won't as long as US gets cheap products from China. The game will go on but I feel that if USA hits the end of line with the printing presses, China will have a rude awakening. The Chinese will need to clean up the bad loans and unprofitable sweatshops and reorganize themselves. First, they need to develop a home economy instead of relying mostly on the USA for a market and secondary they need to establish better trade relations with Russia & India. Just my opinion, after all, it is the big US corporates who have the controller to the Playstation of the Globe.
 
1) China has been hyped in SE Asia as an emerging economic superpower since about 10 years ago. I wonder if they'll stop emerging 10 years from now. :p

2) China is boom town Charlie because its not saturated by brainy capitalists and filled with 1 billion people we can con. If you mass produce some lame product and it catches on in China, you're gonna make a ton of money because of the shear amount of people and buying power. Like for example, China comissioned US companies to make billions of silicon chips for their new identity card some time ago.
 
Quote from Hydroblunt:

Hahaha that's hilarious.

Hey but seriously, it's pretty obvious to anyone who does their research outside watching mainstream "business news" such as CNBC that China is mostly full of crap. Sweatshops running on razor thin margin, supported by 50% bad loans & foreign overinvestment is far from a winning formula in a business sense. It is, however, a great formula for growing employment and moving peasants from the countryside toward urbanization & industrialization. China's main concern is employing the population and I notice that the government seemed to have fused the tactics of Stalin's forced industrialization with the capitalist ways. A whole separate topic but the main point is that the "growth" in China is not fueled by Domestic profit but the government drive toward employment of the masses.

The bubble should deflate but it won't as long as US gets cheap products from China. The game will go on but I feel that if USA hits the end of line with the printing presses, China will have a rude awakening. The Chinese will need to clean up the bad loans and unprofitable sweatshops and reorganize themselves. First, they need to develop a home economy instead of relying mostly on the USA for a market and secondary they need to establish better trade relations with Russia & India. Just my opinion, after all, it is the big US corporates who have the controller to the Playstation of the Globe.
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Average salary is $1,000/year, how do you build a domestic economy on that?
 
Quote from areyoukidding?:

Average salary is $1,000/year, how do you build a domestic economy on that?
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Same way USA built itself up through dirt cheap labor (immigrants) into a world superpower.

And I would not measure a domestic market in a fiat currency. It's about production of goods & developing domestic infrasturcture so that advanced industries can start growing. After all, we don't eat dollars, drive dollars or wear dollars.
 
Playing fields are level...when governments are level...

Communism = forced labor....As money rises, communism will waiver and fall down hard...

The standard move is communism..capitalism...then socialism..

There has been no major shift from muslim monarchies to capitalism...There is no mixing of muslim..capitalism...as in US capitalism...The muslim monarchial nations have been around a lot longer than the US...and now have a lot more...nuclearly protected oil control...soon...as in Iran-Iraq..

One thing for sure..China´s communism will not stay constant if capitalism sets in...Each province assigns monopolies at this time via local government official´s approvals...

Its safe to say that the US populous will go in an old European direction such as Italy or France..

And its also safe to say China´s labor costs are going to go up...
 
Agreed. A thoughtful observation.

The chinese notion of marketing is "sell more and sell cheaper". They don't seem to have any idea of price power of Buffet.


Quote from Hydroblunt:

Hahaha that's hilarious.

Hey but seriously, it's pretty obvious to anyone who does their research outside watching mainstream "business news" such as CNBC that China is mostly full of crap. Sweatshops running on razor thin margin, supported by 50% bad loans & foreign overinvestment is far from a winning formula in a business sense. It is, however, a great formula for growing employment and moving peasants from the countryside toward urbanization & industrialization. China's main concern is employing the population and I notice that the government seemed to have fused the tactics of Stalin's forced industrialization with the capitalist ways. A whole separate topic but the main point is that the "growth" in China is not fueled by Domestic profit but the government drive toward employment of the masses.

The bubble should deflate but it won't as long as US gets cheap products from China. The game will go on but I feel that if USA hits the end of line with the printing presses, China will have a rude awakening. The Chinese will need to clean up the bad loans and unprofitable sweatshops and reorganize themselves. First, they need to develop a home economy instead of relying mostly on the USA for a market and secondary they need to establish better trade relations with Russia & India. Just my opinion, after all, it is the big US corporates who have the controller to the Playstation of the Globe.
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