Posted on 06/12/2011 2:10:43 PM PDT by TigerLikesRooster
Nouriel Roubini Explains What Could Trigger A Hard Landing In China
Gregory White | Jun. 11, 2011, 7:36 AM
China is at risk of a hard landing, but that scenario won't play out until after 2013, according to Nouriel Roubini.
There are two reasons why the Chinese economy could end up collapsing, according to Roubini.
(Excerpt) Read more at businessinsider.com ...
P!
1. Their inability to control the 1.6 billion population of that country.
2. Their serious pollution problems that border on frightening.
3. Too much infrastructure projects that have no significant financial return.
4. Banks that are WAY more leveraged than any US bank.
It could be an ugly and nasty fall.
Seen any of the “Chinese ghost town” video?
Don’t say that to those who believe that China has a robust economy and is out to take over the world economy. There are quite a few of them out there.
I was on Wall Street in the 1980’s. Back then everyone thought that Japan would own the US. Of course it didn’t happen. We are seeing a new version of an old anti-American fantasy in the financial markets.
Some of these people believe that China’s economy will save their financial portfolio U.S. economy messed up. They are willing to serve any master if he can salvage their portfolio.
I was in tech in the 80’s I told my dad about my great new Sun workstation. He asked “made by Rising Sun?” He was surprised it was made in America. One difference now is that China has some software and hardware talent that goes beyond the Japanese cloning with marginal improvements.
I should add though that once their economy implodes those talented techies will be sent out to the farms to pick beans (or get shot or starve)
One very big thing that could crash the Chinese economy is the drop off in demand from the United States caused by a weak American economy and currency
Speaking of controlling the population:
“Riot in China city after official dies in custody”
http://www.freerepublic.com/focus/f-news/2733688/posts
Fact: GDP Per Capita in 2010 - US $46,000; Red China $3,920. US citizens produce an average 1000% greater than their communist competitors.
Oh, they're following the US model! :)
1. They are running out of energy.
2. They are running out of fresh water.
3. These two factors mean that they will eventually run out of domestic agricultural resources to feed their people.
“There are two reasons why the Chinese economy could end up collapsing, according to Roubini.”
I suppose it’s comforting to know that a large country who doesn’t have America’s best interests at heart has also made bad decisions. But we really need to get out of our own mess before we start worrying about other nations.
That’s what is happening here. The small farmers are going bankrupt. Beef prices are being pushed down.
One very big thing that could crash the Chinese economy is the drop off in demand from the United States caused by a weak American economy and currency>>>>>>>>>>
Europe is also weak and has been a huge buyer of Chinese goods. IMO Brazil and other BRIC countries are not rich enough to buy a lot from China and some people think the BRICs are the future
Roubini is wrong.
In China, the Government is the ultimate source of all economics. Economics is subservient to politics.
Yes, China may face problems with inflation, speculations, crappy loans stuffed in the state-run banks, etc... But the Government/Party can deal with this. A Gov’t that can move 3 million people out of their homes/land to build a dam can take whatever steps are needed to deal with economic issues.
What will cause chaos in China? A split in the Party caused by political in-fighting or factionalism. Analysts are looking in the wrong place to find risks in China’s economy.
It would seem that those "Ghost Towns" are a way for Chinese to invest. Cheap Land + Cheap Labor + Cheap building materials = great potential for profit on the improvements. Now if only the average Chinese could afford to live in those ghost towns.
China will have a nasty RE crash wait and see.
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