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Is China on the verge of a crash?
#61
Here is an e-mail, sent to Dr John Ray, where discusses China, and it's future. It's interesting, and falls within the top of China's perilous economic position.

Quote:Is China a paper tiger?

An email from the optimistic Ray Kraft [rskraft1@gmail.com] below. Mao used to call America a paper tiger, meaning that it looked strong but was not

Even the Chicom government has calculated and published its estimate that circa 2015 the number of workers in China will enter a period of permanent decline in both absolute and proportionate numbers, while the number of retireds in China will enter an indefinite period of increase in both absolute and proportionate numbers. I.e., the Graying of China begins, in about five years.

At that point, the long-term economic decline of China begins, and because of 30 years of its one-child policy - it would take generations of 2+ children per family to reverse the trends - this in a society in which one-child per family is now the social / cultural norm, and which faces an imminent and indefinite era of economic decline.

My expectation is that within a few years after the decline begins - circa 2020-2030 - the Chinese empire will begin to unravel, if it hasn't begun before then. It was cobbled together after WWII from a vast array of provinces and cultures, and is as fragile as the old Soviet Union was, and could disappear as quickly. It is held together now by prosperity and force, but as prosperity declines, force will become inadequate to keep it together.

If America avoids suicide, America will emerge within a generation as an even more dominant geopolitical and economic power as:

1. China slowly self destructs.

2. Russia, with a population declining by 1/2% per year, also slowly unravels.

3. The EU, cobbled together from a couple of dozen different economies artificually slaved to a single currency, drifts more or less aimlessly in the Sargasso Sea of political incoherence.

4. The Middle East has peaked, and if America has sense enough to move toward energy independence with nuclear and other sources (note that Obama has proposed $56 billion in new loan guarantees for nuclear power plants in his new budget), the decline of Islamic Middle East will be as inexorable as that of China and Russia.

If America manages at least to Muddle Through, at best to Flourish and Prosper, America's destiny will be to become the next "Roman Empire." It's our's to lose. The biggest threat is that America will not understand and grasp this destiny, and will fail to understand and accept the responsibility ("noblesse oblige") that goes with it. i.e., the destiny and fate of Civilization now lies in America's hands, even if we don't know it. And we need to look to the Athenian Democracy and the Roman Empire for lessons learned.

Ray Kraft was responding to a Jack Wheeler article of 5th. which also said that China was in a weak position. Excerpt:


Quote:The myth that the Chicoms magically turned their economy around on an instant dime - one minute double-digit GDP growth via the US gorging on their exports, the next minute the exports fall off a cliff as we stop buying yet they still have double-digit GDP growth via a hocus-pocus stimulation of their domestic economy - is a myth few big-time investors believe in now.

And finally, folks are figuring out that of all China's bubbles - make-believe growth, stocks, real estate - the biggest of all is its gigantic pile of "dead money" - those $2.4 trillion of our alleged dollars.

How many countless times have you heard some pundit bemoan how much we "owe" China? Yep, sure was stupid of us. We got all this stuff - as in real physical products we actually use in our lives - and they got all this paper, all these imaginary things called "T-bills" and such, and please explain how they cash them in.

Finally, bankers are figuring it out. "There's nowhere for China's reserves to go," is the latest buzz in London's City. "How do they unload them without taking a trillion dollar haircut?" And with the whiff, the merest whiff of the US defaulting on its debt, the Chicoms are running scared and retrenching. Their attempted stimulus of their economy has run out of steam - any more would be like pushing on a string.

So they've pulled back on buying up the world's commodities, which is why everything from copper to oil to soybeans is down - which is why, e.g., Brazil's Bovespa index is down thousands of points as China isn't buying its beans and iron ore.

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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#62
I don't believe in a decline due to inverse demographic pyramid where olds outnumber the youngs.
China is not going to run out of manual worker anytime soon.
Japan is a retired country for 20 years already and they didn't collapsed like a roman empire circa 435 BC. It's still a respectable power in the region.
10 years agao, it was predicted that Chinese would invade Russia from Siberia because the white russian population was retreating. Nothing of that happened.
Pure coincidence or not, Iran is on the verge of becoming a nuclear power just 10 years after its birth rate fell under 2.
etc etc.

I believe more in the illusion of fake value and in the Amocles sword hanging above all that no investment is safe.
The is second "quote" hit the nail: It was stupid from the US to borrow from them so much, but it was even far more stupid of them to put 75% of their assets in a single investment.
They managed 3 Trillons like Pa and Mom would manage a $100,000 savings.
When you have that amount of money and your name is "The Chinese Governement" ou do something else than buying T-bonds.

They needed the shock of the financial crisis to realize that. A bit too late IMO.

the second tremendous thought of that is that US dollars must forcibly ends in purchases from and in the US.
Other countries may accepts $ as payment but ultimately they come back to the US. It's not with $ that you will buy stuffs in Europe, that's for sure.
So either the $ remains the world currency reserve or every nation wishing to diversify with a pool of other currencies and other Iran/China/Russia backed IMF bonds, will have to spend their bucks in the US.
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#63
I don't believe in a decline due to inverse demographic pyramid where olds outnumber the youngs.
China is not going to run out of manual worker anytime soon.
Japan is a retired country for 20 years already and they didn't collapsed like a roman empire circa 435 BC. It's still a respectable power in the region.
10 years agao, it was predicted that Chinese would invade Russia from Siberia because the white russian population was retreating. Nothing of that happened.
Pure coincidence or not, Iran is on the verge of becoming a nuclear power just 10 years after its birth rate fell under 2.
etc etc.

I believe more in the illusion of fake value and in the Amocles sword hanging above all that no investment is safe.
The is second "quote" hit the nail: It was stupid from the US to borrow from them so much, but it was even far more stupid of them to put 75% of their assets in a single investment.
They managed 3 Trillons like Pa and Mom would manage a $100,000 savings.
When you have that amount of money and your name is "The Chinese Governement" ou do something else than buying T-bonds.

They needed the shock of the financial crisis to realize that. A bit too late IMO.

the second tremendous thought of that is that US dollars must forcibly ends in purchases from and in the US.
Other countries may accepts $ as payment but ultimately they come back to the US. It's not with $ that you will buy stuffs in Europe, that's for sure.
So either the $ remains the world currency reserve or every nation wishing to diversify with a pool of other currencies and other Iran/China/Russia backed IMF bonds, will have to spend their bucks in the US.
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#64
Fredledingue Wrote:10 years agao, it was predicted that Chinese would invade Russia from Siberia because the white russian population was retreating. Nothing of that happened.

Oh, really? Just ask Green, who is from the asian side of Russia, and has reported, right here, that there is indeed an invasion of Chinese, into Russia. They are just not invading with tanks and attack aircraft. They are doing it with their feet.


Quote:Pure coincidence or not, Iran is on the verge of becoming a nuclear power just 10 years after its birth rate fell under 2.
etc etc.

Huuh? I thought the average age of Iranians was under 30 still. [/quote]
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#65
Fredledingue Wrote:10 years agao, it was predicted that Chinese would invade Russia from Siberia because the white russian population was retreating. Nothing of that happened.

Oh, really? Just ask Green, who is from the asian side of Russia, and has reported, right here, that there is indeed an invasion of Chinese, into Russia. They are just not invading with tanks and attack aircraft. They are doing it with their feet.


Quote:Pure coincidence or not, Iran is on the verge of becoming a nuclear power just 10 years after its birth rate fell under 2.
etc etc.

Huuh? I thought the average age of Iranians was under 30 still. [/quote]
___________________________________________________________________________________________________
Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#66
John L Wrote:
Fredledingue Wrote:10 years agao, it was predicted that Chinese would invade Russia from Siberia because the white russian population was retreating. Nothing of that happened.

Oh, really? Just ask Green, who is from the asian side of Russia, and has reported, right here, that there is indeed an invasion of Chinese, into Russia. They are just not invading with tanks and attack aircraft. They are doing it with their feet.

They are doing this, slowly and consistently. It seems that China would rather take decades than quick and risky actions.

The same philosophy applies to the China-US relations. Rather then war, slowly increasing economic domination; in the long run rich industrial power always has the upper hand. And, when ready and needed, squeeze. Just like reported yesterday.
Sodomia delenda est

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#67
mv Wrote:
jt Wrote:You assume that foreign powers have any money left over to invest in China. Which ones were you thinking about?

Zimbabwe, the people there hold a lot of humongously denominated bills.

[Image: zimbabdough.jpg]

More seriously, in a similar situation, the Japanese managed to maintain social stability for twenty years now.... stagnation, but no upheavals or collapse. China may be able too.

Friedman talks about this in his book, and while he doesn't go into the specifics of the differences between the two cultures, he makes the convincing point that their different histories shows there are differences that make it possible for Japan to remain unified during times of social change(the Meiji Restoration was one of most intense periods of such change in all human history, if not the most intense), whereas China can't.
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#68
There is not many Chinese here, no more than in Moscow or elsewhere.
There is no Chinatowns here unlike in the US, Australia etc.
China has influence on us, but it's not that the Chinese come and live here on empty lands.
They may work here and their workforce is always regulated and monitored.
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#69
I don't see why anyone thinks China is going to have an economic collapse. While we're stagnating,they are zooming ahead on our investments.

It's the same with Europe and North America. Investment capital is flowing into China more now than international investment flowed to the USA when we originally built up.

They're getting it right,we're the ones having a hard time and teetering on collapse with our spend to become wealthy paradigm,not China.
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#70
Chinese hubris must be rather high now. They are mastering Google (or eliminating it) and enjoy a rush of foreign money that wants to cash in on their economic expansion. Their economy is expanding. They are having their way with the US administration (except for the arms sales to Taiwan) and can veto what they want in the UN. The only slip up I can think of is with unrest in their population. This is present, but not dangerous to them in my opinion.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#71
Palladin Wrote:I don't see why anyone thinks China is going to have an economic collapse. While we're stagnating,they are zooming ahead on our investments.

It's the same with Europe and North America. Investment capital is flowing into China more now than international investment flowed to the USA when we originally built up.

They're getting it right,we're the ones having a hard time and teetering on collapse with our spend to become wealthy paradigm,not China.

I think it's because it feels good for Americans to imagine China in trouble. Don't break the bubble for them Palladin, it's going to break soon enough!
If I can't read some people's posts and respond to their nonsense then is it fair to ask those people to stop reading my posts and not respond to them?And is it nice for some people to lie and say they don't read my posts? LOL
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#72
Palladin Wrote:It's the same with Europe and North America. Investment capital is flowing into China more now than international investment flowed to the USA when we originally built up.
That's precisely why China is bubble. Too much money flowing in the same direction.

I don't think it's wise to invest trillions in a place where there is only crap quality, low salaries and no technological inovation whatsoever.
All they have done with their money was to build prestigious business center, like in the emirates, but still didn't get their poeple in the XXI_st century.
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#73
Fred,

Japan in 1960 made crap and here in America we laughed at it. Taiwan then took their place,now China.

They don't stay this way,things work in a linear method with economic growth.

A generation from now if China succeeds in navigating the social possibilities and dangers,they will be the most dynamic and productive state on earth along with India and Brazil.

North Americans and Europeans will be less wealthy,less dynamic,that's just the way the world works,it always has.

We do not have a God mandated wealth advantage over others and here I agree with Jeff,lots of us assume we do,we do NOT.

We have had our day in the sun,it is rather evident to me America is in decline and our population guarantees this won't stop. We want to be taken care of by our state and when enough folks are like that you lose your economic dynamism.
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#74
I beg to differ. Japan have shown technological superiority since before ww2. Taiwan and Korea just a few decade later.
Chinese are not innovative like Japanese. That's a major difference between the two cultures.

I'm saying China can't or won;t evoluate but it has to change if it wants to dominate other than through pure demographic obesity and forced exports.
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#75
Fredledingue Wrote:I beg to differ. Japan have shown technological superiority since before ww2. Taiwan and Korea just a few decade later.
Chinese are not innovative like Japanese. That's a major difference between the two cultures.

I'm saying China can't or won;t evoluate but it has to change if it wants to dominate other than through pure demographic obesity and forced exports.

Fred, you are simply wrong. It's absolutely true that Japan produced crap after the war and I think Palladin is fairly accurate in saying up to about 1960.

Made in Japan. Made by the JA pan company. Perhaps you are not old enough to remember?

Gee Palladin, I sure wish we could stop agreeing on things!
If I can't read some people's posts and respond to their nonsense then is it fair to ask those people to stop reading my posts and not respond to them?And is it nice for some people to lie and say they don't read my posts? LOL
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#76
Fred,

Their consumer stuff was low quality back in 1960. Maybe it's due to gaining access to our markets,maybe that's how it works,ask these other old guys.
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#77
Japan made some crap until the 80's but their crap was not as bad as Chinese crap.
They also made no-crap stuffs and utlimately became top car makers and #1 leaders in robotry.
...and they also invented karaoke. LOL

China by contrast haven't had a reputation of doing quality since they invented porcelaine.
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#78
Fredledingue Wrote:Japan made some crap until the 80's but their crap was not as bad as Chinese crap.
They also made no-crap stuffs and utlimately became top car makers and #1 leaders in robotry.
...and they also invented karaoke. LOL

China by contrast haven't had a reputation of doing quality since they invented porcelaine.

Fred, that's simply not true. China makes some great furniture, among other things, which are sold here. My parents bought a beautiful clothing chest, in Japan, back in 1951, for $600. That was a lot of money back then, but it was beautifully relief hand carved on the front doors, the sides, and the top.

The style is nothing like what is sold on the market today. It is absolutely gorgeous. They bought it in the PX, and have had it for almost 60 years. Before that, it was in someone's home before being sold to an exporter. Today, it is literally worth thousands of dollars. You would have to see it to believe it.
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Hillary Clinton Is Like Herpes, "She Wont Go Away" - Anna Paulina
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#79
With global communications,anything done well one place can easily be duplicated in another. I don't buy this theory that only ethnic Europeans can make great products,that's just culural arrogance,IMO.

Soon Brazil,China and India will show us all a thing or 2 and we'll learn better. Brazil right now makes great commercial airliners called Embraers. If they decide to enter the big jet market,they might put Boeing a step or 2 back and EADS.
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#80
The Chinese can make everything.
They make good quality products, a lot.
Communication equipment is one of them.
Try "Huawei", for instance.
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