Posted on 07/27/2015 12:36:29 AM PDT by Citizen Zed
China's economy is at risk of catching a nasty flu -- and infecting the rest of the world in the process.
After years of explosive expansion, China is cooling off. Growth has fallen to its lowest level since 2009, and investors believe it might be even worse because Beijing may be fudging the official numbers.
China is now the second biggest economy in the world. The fear is that China will pull other major economies -- including the U.S. -- down with it. That would be scary given how slowly the global economy is currently growing and how little ammo governments have left to jump start business.
"We need all the growth we can get. A slowdown in China wouldn't help," said David Joy, chief market strategist at Ameriprise Financial.
Investors around the world went on high alert when China's stock market began to crumble in late June and early July. While Chinese equities have stabilized for now, it's rattled investors, causing prices for oil, gold and copper to tumble.
(Excerpt) Read more at money.cnn.com ...
Obama is a whole lot like terminal cancer - it’s hard to care if you catch pneumonia too. China’s crony-communist economy isn’t likely to infect us with anything worse than what Obama has already done to our formerly prosperous country.
Where it can hurt us is if China dumps a large amount of their existing Treasury holdings and/or severely curtails future purchases.
Not many other countries are in a position to pick up the slack, even if they wanted to.
Result? Here comes QE4 here, and more global QE as well. Market reaction to further monetary easing is anyone’s guess.
And Janet can forget raising rates.
they already have. nobody is quite sure who the buyer was.
Give it six months to filter through.
This may repatriate some industry back to the US. Instability creates capital flight
I think that’s backwards. The sick US economy infected China and the world.
Money is a wild animal. It don’t like fences. Too many here.
China would just produce quality knockoffs off the patents the companies must share with the government.
That is how I see it as well; once Americans, idled when their jobs went to Red China, no longer have money to buy anything, then there are a lot less orders for goods to the slave colony.
Yes, because China may need the money it has lent the U.S. We live off loans and they may come due sooner than our feckless spenders in D.C. thought.
I am an old guy.....I remember when electrical toasters came out in the stores....they were hi-tech...but after a few years, everyone had an electric toaster....and so the toaster company closed....a few years back, flat screen Tvs where the hi tech of the moment....now everyone has a flat screen TV, and so the TV company closes the doors....and China has nothing to sell....
Governments don't jump start business; They interfere and inhibit it. If you want a flourishing market, government must get out of the way and do nothing. Sadly, our own government, led by the severe Conservatives of the GOPe are no trying to tax and kill the internet based market.
China’s stock market is down by 8% today.
...
And it’s still up 70% compared to a year ago.
That would be scary given how slowly the global economy is currently growing and how little ammo governments have left to jump start business.
Just remove some of the stupider regulations in both the EU and the U.S.
Business would boom!
See, India's population is stabilizing, also, albeit much later (taking hold in the 1990s, as opposed to the 1970s.) But it's set to make a "soft landing" as opposed to a crash. In about 10-15 years, the final surge of China's baby boom will begin to retire. And with it, manufacturing capacity. China's export explosion will wind up meeting its own consumer demand, but profitability will be shot to hell.
Oops... The 2nd of the two graphs.
The population structure issue in China is much more dire than the outside world acknowledges. See that widening in the final age group (0-5)? That’s as big as it gets. The baby boom caused a ripple in the 1980s, because the population of fertile women surged so much in the 1950s. In turn, it made a slight ripple just now (0-5). But that’s it. Expect that ripple to fade away.
Fertility rates by the US and UN are far more accurate than those by the Chinese, because the Chinese just announce what they anticipate fertility to be if everyone complied 100% with the 1-child policy where it is in effect. So they are correct in being much higher (1.55, for instance, instead of 1.18 at the last Chinese census.) But Chinese population estimates by the US and the UN are based simply on projected changes in the fertility rate based on moving in and out of fertile years. They don’t recognize that most Chinese women have their baby by the time they are 30, and that baby-boom echo is about to reach 30.
So when do we bailout China?
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