Posted on 01/28/2010 11:42:50 PM PST by TigerLikesRooster
Chinese Quest for Shortcut to Greatness
Submitted by Vitaliy Katsenelson on 01/28/2010 13:22 -0500
The Chinese economy must be getting out of control, because the Chinese government is doing the unthinkable: It is desperately trying to put the brakes on the economy. When you pump a stimulus package that represents 14% of GDP through a fire hose into an economy, which was already on shaky bubble foundation, in a very short time you’ll have some serious unintended consequences -- you’ll get super bubbles.
/snip
This symbiotic match made in heaven between China and the US consumer worked great as long as housing prices kept rising and the financial machine kept multiplying dollars. But all good things come to an end, and great things come to an end with a bang. The financial meltdown erupted upon us, the US and global banks started dropping like flies … well, you know how that story played out.
/snip
Second, China will do anything to grow its economy, as the alternatives will lead to political unrest. A lot of peasants moved to the cities in search of higher-paying jobs during the go-go times. Because China lacks the social safety net of the developed world, unemployed people aren't just inconvenienced by the loss of their jobs, they starve (this explains the high savings rate in China) and hungry people don’t complain, they riot.
/snip
The Chinese government controls the banks, thus it can make them lend, and it can force state-owned enterprises (one-third of the economy) to borrow and to spend. Also, because the rule of law and human and property rights are nascent in its economic and political system, China can spend infrastructure project money very fast
(Excerpt) Read more at zerohedge.com ...
P!
They built a city for a million people and no one came. Ah ha ha ha.
They built a skyscraper next to one still vacant.
They have more excess cement capacity than all plants in the USA and EU combined.
yitbos
Where do you think the money came from to buy the $2T worth of US Treasuries, which will become worth much less if Obama prints money for the bonds' redemption? Why do you think the Chinese government is not complaining too loudly about how Obama is blowing through that money? The Chinese people don't really know where their savings are but the government does. Chinese culture thrives on rumors, superstitions, and herd mentality. Imagine the run on Chinese banks if it got out that their savings were in jeopardy.
If they need a shortcut, they should try the Northwest passage. I here that it is open now due to global warming </sarc>
Looking on at the Chinese situation, my feelings are EXTREMELY clear. I have had the EXACT same feeling 2 times before:
1. Japan mid 1980’s
2. USA ~1999
Those were both times where it looked like NOTHING was impossible —feelings followed by great reversals.
You know.....I think it’s possible that we’re teetering on the the biggest financial collapse in WORLD HISTORY.
Anyone else sometimes think that...?
Cycle through the 10 panes...great shots of some of the crazy, inflated crap they're building there now...
China, the US, and Russia: MAD revisited
Cheers!
I have heard on this forum, from some, that there is no difference between a yuan and a renminbi. Yet, Red Chinese currency is not convertible and does not float on the open markets.
If there were no difference between the yuan and the renminbi, and the currency does not float, what is to prevent the ChiComs from printing all the yuans they want and just start buying the world?
yitbos
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