Posted on 05/18/2006 8:39:43 AM PDT by Paul Ross
InTech
17 May 2006
China close to edge
The U.S. economy in 2007 will be OK, but things will start to slide in 2008, and there will be a recession in 2009, said economist Alan Beaulieu at the 13th annual Control Systems Integrators Association Executive Conference in Panama City, Fla.
“So no big capital investments after this year and don’t hire that corporate VP unless you’re really comfortable with and can afford to lay people off,” Beaulieu warned.
While the recession will, of course, be unwelcome in the U.S., it may have profound effects in China. When the West pulls back on its imports from China, the economic distress that will cause the already 900 million disgruntled Chinese may lead to real social problems, he said.
Beaulieu, who works for the Institute of Trend Research, figures of the 1.3 billion people in China, there are 400 million members of the upper and middle class who are doing well these days. The rest are struggling to put food on the table, he said.
“The U.S. recession will stem from the burdensome budget deficit that the Bush administration is incurring, high interest rates, demographics that will see the baby boomers retiring in droves, high inventories in the U.S., high oil prices, and troubles in the housing market relating to home prices,” Beaulieu said.
“We will elect a Democratic president in 2008” and “China will not be the #1 economy in the world in 10 years” were a couple of other notable predictions Beaulieu made.
—Nicholas Sheble
Who pays them to come up with this stuff?
And since when did "economists" take up where Nostradamus left off?
Looking into the future I see:
A world free of democrats and other communists. The world will be free of muslims.
OK, my utopian dream is over.
Trend spotting and capitalism go together, but capitalists need to have someone spotting the trends in trend spotting so as not to be left on the spot.
great line!
Real capitalists set the trend instead of waiting for the "trend setters" to proclaim.
Anybody?
Something to that effect," because there are no muslims in the future".
I used to be an economist before I returned to engineering/entrepreneurship. Most of the "Media Economists" are in show biz, not econ.
In the year 2030, a father and his son are touring the site where the Twin Towers had stood. The father was telling the boy about the Arabs that knocked the towers down.
The boy said "Daddy, what are Arabs?"
Bush and the Saudi King are talking during a meeting break.
King: You have a great country.
Bush: Thank You
King: I have one question, my son loves your TV show StarTrek, but he is puzzled. Why are there no muslims in the show?
Bush: That's easily explained, it because StarTrek is set in the future.
Or something like that.
Yep, McCain or Giuliani.
Since they predicted 11 out of the last 5 recessions.
That would explain the reason for his predicted 2009 recession.
Recent prognostications.
Frankly, I would be surprised in the event of a U.S. recession if orders to China for manufactures declined significantly...the fundamental basis of the imbalance in comparative costs is still totally unaddressed. Hence the lion's share of the Chinese export growth is essentially not new consumption here...but continuing shifting of our manufactures to the least-cost-source...them.
A decline in overall US consumption due to recession would taper off some orders, but would differentially impact high-end orders (which remain U.S.)...and in the resulting squeeze put an even greater push to economize... This would consquently increase the reliance on Chinese orders to maximize economic position in the face of the stress...
Simple dynamic of household budgeting.
China would not be as adversely impacted as our own industries would be by a recession. That's my take on this speculation.
How many trends could a trendspotter spot if a trendspotter could spot trends...
Economist have predicted 10 of the last 3 recessions.
Who???? Hitlery of course!
The deficit is being reduced greatly due to economic growth. If the House draws a line on spending, this will reduce pressure on interet rates.
"high interest rates"
See above. "demographics that will see the baby boomers retiring in droves"
This will move a lot of skilled younger workers up the food chain, so I'm not sure the overall reduction in demand will be that severe.
"high inventories in the U.S."
If these inventories come from China, it will hurt them, not the US; and several years of low dollar exchange rates should see a big pick-up in US exports.
"high oil prices"
Energy prices are not as big a factor as decades ago, and will decline (again) in proportion to the overall economy if real GDP continues to grow briskly.
"troubles in the housing market relating to home prices”
Some markets that are hyperinflated will see big drops, otherwise see the comments on interest rates above.
“We will elect a Democratic president in 2008”
Unlikely, unless the GOP selects an unknown to run. The Democratic primaries are likely to be bruising unless the donks line up behind a pseudo-centrist candidate like Clinton; but then any superstar GOP candidate (McCain [yuck], Giuliani, Rice [?]) would easily defeat the jackass.
I wonder if soon China is really going to feel the effects of its "one-child" policy & female infanticide.
The woman shortage is already happening there; a number of Chinese men can't find wives. Obviously, this will lead to a further reduction in population -- not to mention industrial productivity.
You can have more women than men, but not more men than women. (Even excluding the male population that's either gay or physically sick.) Big trouble looming there.
"Beaulieu... figures of the 1.3 billion people in China, there are 400 million members of the upper and middle class who are doing well these days."
I guess it depends on what the meaning of "doing well" is.... Source below would dispute Beaulieu's claim.
"Of China's 1.3 billion population, at least 900 million people in rural villages still live in dire poverty. Dealing with the disparity is one of the government's biggest priorities, officials said.(IHT/Asahi: May 3,2006)"
http://www.asahi.com/english/Herald-asahi/TKY200605030101.html
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