My peeps? Your a hoot for a ChiCom.
Posted on 11/13/2003 5:44:54 AM PST by Texas_Dawg
By SCOTT BURNS / The Dallas Morning News
NEW ORLEANS – At the end of his tour de force presentation, the audience gave Marc Faber a standing ovation. Speaking at the 30th New Orleans Investment Conference, Dr. Faber gave a quick, Swiss-accented march through a collection of more than 40 economic graphs and drew a detailed picture of a "Post-Bubble Environment."
And what was his broad message?
Say goodbye to low commodity prices. Say hello to the century of China. Change your investments accordingly.
"The beauty of the bubble is the undervaluation it will create somewhere else," he observed. All the money that supports bubble prices comes from other areas that tend to become undervalued.
Comparing contemporary China to the United States in the mid-19th century, he pointed out that the completion of the American rail and canal system brought decades of deflation – declining prices wrought by our ability to move food, goods and materials at low cost from anywhere in the country.
Now, he declares, the entry of China into the world market will have a similar impact on the price of goods – years or decades of declining prices. The entry of India into the world market, he says, "will have the same impact on services."
More important, this is happening at incredible speed. It took Great Britain nearly 60 years to double per-capita income from 1780 to 1838, during its industrial revolution, Dr. Faber said. It took Japan more than 30 years to accomplish the same thing from 1885 to 1919. But China is doubling its per-capita income every 10 years. More important, as it expands its production, it is increasing its circle of interest in the Pacific, becoming the major consumer of goods and raw materials from the region.
Dubious?
Skeptics should check the stock exchange booms in countries that have commodity-based economies. While the iShares Russell 3,000 index exchange-traded fund (ticker IWV) – which captures 98 percent of all market capitalization in America – is up about 21 percent year-to-date, the iShares MSCI Australia Index (ticker EWA) is up 39.9 percent. The iShares MSCI Canada Index (ticker EWC) is up 40 percent. Australia and Canada are considered commodity-based economies. One particularly striking example: oil. If the growth of China continues on its current path, it will need additional oil equal to the "total current output of Iraq, Kuwait and Qatar," Dr. Faber says. If China grows as the United States did in the first half of the 20th century, its new oil consumption would require "83 percent of total current oil output" by 2015. Message: Enjoy your low-price gasoline while you've got it.
The size and growth of China are so great, he says, that we are only 10 or 20 years away from having world attention focused on housing starts and retail sales in China as a measure of the world economy.
All of this means rising commodity prices, falling bond prices, and a major shift in global market capitalization. Today the United States accounts for 53 percent of world equity values, and Asia (excluding Japan's 8.7 percent) accounts for only 3.4 percent. He sees the United States with 25 percent to 30 percent of the total in the future, while Asia has 30 percent or more.
On the large scale
How does such a big shift happen? It's the raw population numbers. Dr. Faber points out that Swiss per-capita consumption of chocolate is very high – but the tiniest increase in Chinese per-capita chocolate consumption would simply dwarf Swiss demand. That's what a small change in a nation of nearly 1.3 billion people does. Ditto lumber, grain, oil, copper, aluminum and just about anything else. Double the per-capita income of a nation that is four times larger than ours in 10 years, quadruple it in 20 – with plenty of room for continued growth – and global equity values will shift.
We'll be saying goodbye to hegemony before we learn how to pronounce it.
That's what a small change in a nation of nearly 1.3 billion people does.Demographics? This analysis reduces to a brute demographic claim? More consumers, more demand? A subtler, more explanatory model would account for consumption patterns, income disparaties, age distributions etc., etc. For example, Americans are few compared to the rest of the planet; but we consume way out of proportion to our numbers because of a favorable income distribution and other social, legal conditions (big middle class). This analysis assumes, basically, a bourgeios revolution in mainland China, which would be great, but I really-seriously doubt it.
No, you're not a Chinese citizen.
Not much.
Sorry, Chicom -- we will be BEATING you, not JOINING you.
As terrible as the Chinese government is, it really is starting to see the light on the economic side (on the social side, that's a different story). With that many people and with as bad as its communist economic policies were for so long, the slightest removal of restrictions on its economy will lead to large gains. China is booming right now and its a trend the U.S. needs to work with them to manage and push in the right direction... not fight, as many here want to do. An economically prosperous China will be more free and less threatening to free nations.
Can you say that, without your government locking you up?
Wow!
My peeps? Your a hoot for a ChiCom.
... not fight, as many here want to do. An economically prosperous China will be more free and less threatening to free nations.I agree with you completely. That would be fantastic both for the Chinese and the world, especially the world. I'm simply a little less optimistic about China ever developing and sustaining a Western model, market system, say, like Japan or Korea. Their pattern appears to be one of punctuated equilibrium--equilibrium punctuated by catastrophe, political catastrophe, resource catastrophe etc., etc. Perhaps it is simply a failure of the imagination on my part, but 3,000 year old Celestial Empires ... oh, whatever. My predictions are worthless. The Chinese are as mysterious to me as our Muslim brothers and sisters.
China is obviously very different from us, but they encouraging thing is that many Chinese have shown a very open attitude to adopting Western ideas as well as Christianity. This is very different than most Muslim societies.
He's mastered the idioms of the language pretty well, I have to admit.
LOL - Hey Running_Dawg, where do you get this slang? Tell your handlers that the book they issued you "How To Talk Like Fat Lazy American Cowboy Hegemon" is about ten years out of date.
Liar.
China continues to persecute Christians
TORTURE - THE REALITY FOR CHINA'S CHRISTIANS
Torture of Christians in China -- Photos - Not Graphic
Activists accuse China of a sweeping crackdown on Christians - 70 House Church Leaders Missing
I hate people who come here with agendas who are paid by foreign governments, people like China_Dawg. But I hope he is never tortured like these Christians in China:
Say, do those Chinese bicycles allow you to backpedal like that, or do they have those built-in brakes? Until they stop torturing members of various religions strictly for practicing those religions, they are an enemy of decency. And I suggest we refrain from giving them the tools to destroy us.
Why would you care anyway... are you a Christian?
Unlike you, I care when my fellow man is tortured. I know you could care less, we ALL know that about you, China_Dawg.
You'd have made a really great German a few decades ago, but you'll serve nicely in your present role as an apologist for Chinese torture.
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