Posted on 07/25/2013 9:44:31 PM PDT by TexGrill
Naysayers on China are wrong, I think. Americans and American investors should pay close attention to China and learn. Continued Chinese growth means that the supercycle in commodities, prematurely declared dead by so many, will continue.
By the end of 2013, I expect the long-term commodities uptrend to reassert itself. If America does not learn from China, in fact, commodities may be investors’ only potential source of outsized gains.
As I wrote in my book Red Alert, most disbelief concerning China’s growth prospects stems from differences between Eastern and Western mindsets. I cite many clinical psychological studies to distinguish East from West. The findings do not distinguish I.Q. but rather differences in cultural worldviews. The West focuses on the center of action. Our eyes naturally gravitate toward the center of a photograph or picture. In the East, the periphery holds much more significance.
This distinction, an action oriented approach as opposed to a broad perspective, explains a lot. The West tends to ask, “What have you done for me lately,” or to advise that people strike while the iron is hot. Eastern sages typically caution against action until all potential consequences may be fully appreciated. The entire message of one old Chinese parable, for example, roughly translates as “wait and see.”
China’s latest naysayer, Nobel economist and New York Times columnist Paul Krugman, recently argued that China is headed for a terrible fall. He sees China as vastly overbuilt, and facing a massive credit crisis. Moreover, he notes, China can no longer count on cheap labor to continue to drive growth at the rapid levels seen historically. Krugman thinks China’s growth engines have run out gas and its jet plane will experience a crash. His “only question is how bad the crash will be.”
(Excerpt) Read more at forbes.com ...
When has Paul Krugman been right about anything?
Funny how Krugman ignores the same over leveraging here.
He makes every excuse for us going deeper in debt.
I’m not an expert but does it really matter if China is “overbuilt”? They have a ton of cash and have to use it to buy something.
This guy’s as dumb as Krugman. Funny that the two agree on stupid things like high speed rails, government boondoggles and green energy, but disagree on how it turns out.
China is the oldest, one of the poorest, the most populated and one of the most arid countries on earth. They also have few energy resources. They are screwed.
The US’s problems are 100% political. We are flush with everything we need. Only the idiots in our government and the idiots who elect them stand in the way of recovery.
China’s not intentionally committing suicide. I’ll give them that.
...how many times do you have to be wrong before you’re no longer considered an “expert”?
China may not crash as bad as Europe or us, but they have a big debt problem just like the US and Europe, and a diminishing return on investment for their stimulus spending. All the really good projects, the low hanging fruit, have already been built.
Paul Krugman is wrong....?
How is this news? That is like dog barks at shadow
They will crash much, much worse.
They will crash much, much worse.
One child policy is about the most dramatic way a society could commit suicide, so yes, they are.
Fair enough. They’re itching to either send them all to Africa to create a super race or get them all killed in a war.
America's "infrastructure" did not cause growth---it was a BY PRODUCT of growth. The "Canal Era" came AFTER development and widespread use of steamboats, which caused prices to fall much faster than canals ( and canals proved a somewhat low ROI). The massive expansion of road building occurred AFTER cars were becoming mor common and proven viable. Private railroads criss-crossed the states long before the gubment- funded transcontinentals---and even then, the only private transcontinental, James J. Hill's Great Northern---was the only one to survive the Panic of 1873.
The Wright Bros., then Juan Trippe and his private "air taxis", predated gubment-financed airports.
THE PRIVATE SECTOR ALWAYS LEADS IN THE TECHNOLOGY AND CONSUMER DEMAND FOLLOWS BY URGING GUBMENT "FREEBIES" TO LOWER THE COST. But the key productivity breakthroughs have already been made by then!
Yep. There's a whole cottage industry of Panda-huggers with an infatuation with Eastern mysticism mumbo jumbo, fretting about how the Chinese are so fundamentally wise and far seeing, etc.
I agree wholeheartedly.
The GOP and Democrats are both on one team: selling America out to the Chinese.
More and more, we buy nothing but Chinese-made stuff. Expensive stuff. Cheap stuff. But it all comes from China.
Why? Because American companies laid off their American staffs, and sent production to China.
Nobody in on America’s side.
Nobody on the GOP. Nobody on the Dems.
Nobody.
In a static society, long term planning is indeed the wisest course. But in a society regularly disrupted by new science and technology, short-term thinking is the way to go, because nobody can predict the future.
Well, they can plan all they want, doesn’t mean their plans are what’s going to happen. It may not be so easy to catch a tiger by the tail. And, any way you stack it, they are going to have an aging population, and we will see if they can turn it back on.
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