How/why is that? I would think China melting down would boost our economy.
Its all interconnected today, sir...
First thing that comes to mind is the need for liquidity resulting in a dump of a lot of their held assets. This includes significant holdings in Treasuries and US Equities. If those get unloaded, the equity prices fall and so do the treasuries. A decline in the price of the treasuries increases market interest rates for everyone, Fed action or not.
The second thing that comes to mind is price reductions to preserve market share. That is deflationary. Also less demand for commodities, such as oil, copper, steel, etc... That would reduce prices and that is also deflationary.
Deflation, in a rising interest rate environment is a pretty poisonous cocktail to our own economy, given that it is more of a house of cards than anything else right now.
They are the biggest Economy in the world. That’s the way it works.
DP Developing 7 vs GDP G 7
38.417 Trillion USD vs 34.740 Trillion USD
The Developing 7
1. China
2. India
3. Russia
4. Brazil
5. Indonesia
6. Mexico
7. South Korea
The G 7
1. USA
2. Japan
3. Germany
4. France
5. UK
6. Italy
7. Canada
The 15 biggest economies in the world 2015 ( PPP )
Rank Country GDP (Billions of US$)
1. China 17,617.3
2. United States 17,418.9
3. India 7,375.9
4. Japan 4,750.8
5. Germany 3,721.6
6. Russia 3,564.5
7. Brazil 3,263.8
8. Indonesia 2,676.1
9. France 2,580.8
10. United Kingdom 2,548.9
11. Mexico 2,140.6
12. Italy 2,127.7
13. South Korea 1,778.8
14. Saudi Arabia 1,605.7
15. Canada 1,591.6
The following are 26 other ways that China has surpassed America…
#1 When you add up all imports and exports, China now accounts for more total global trade than the United States does.
#2 There is now more total corporate debt in China than there is in the United States.
#3 During 2013, we sold about 121 billion dollars worth of stuff to the Chinese, but they sold about 440 billion dollars worth of stuff to us. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#4 China is now the leading manufacturer of goods in the entire world.
#5 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.
#6 The United States had been the leading consumer of energy in the world for about 100 years, but during the summer of 2010 China took over the number one spot.
#7 China now has the largest new car market in the entire world.
#8 China has more foreign currency reserves than anyone else on the planet.
#9 China is the number one gold producer in the world.
#10 China is also the number one gold importer in the world.
#11 15 years ago, China was 14th in the world in published scientific research articles. But now, China is expected to pass the United States and become number one very shortly.
#12 China is also expected to soon become the global leader in patent filings.
#13 China awards more doctoral degrees in engineering each year than the United States does.
We are in a real estate bubble too.
Compound that with the Euro that is about crash because of Greece.
Greece will still be the first to fall. How symbolic is that?