I’ve read quotes from Chinese officials and generals stating much to the effect that if some economic crash came to China, they would direct the frustrations and energies of their people “into a fist, striking outward.”
Close, but not quite accurate.
We’ll see hyperinflation re necessities (obama is already causing this re energy, and entirely on purpose), but deflation of all non-necessities. Since non-necessities make up the majority of the world’s economies, this will mean few people will be able to afford necessities.
This is a recipe for utter disaster, and it’s almost too late to change paths...
The article overlooks a fundamental difference between China and other countries, that being the savings rates of its citizens. Traditionally the Chinese save 50 percent of their income or more.
Chinese are also far more used to doing without. Pent up consumerism certainly was unleashed in the last 15 years so they have gotten more comfortable but the Chinese are still far more adept at doing without and making do.
This article mentions Chinese rail construction has slowed. But that construction has put in a national system of bullet trains in just 10 years. It is as if the writer thinks that pace should go on forever.
Certainly China’s bankers have been pressured to make loans they would not otherwise prudently make. Perhaps that is going to cause a crash.
If that is the point then fine. But I can’t help think that if China is bad off for that, then what does it say about the U.S. The U.S. financial position seems far, far worse.
I’ve heard convincing arguments that the core of the problem lies with the repeal of the Glass–Steagall Act around 1999. Only 8 years later, we had our inevitable crisis.
At some point the thing about missing 70,000,000 women has to start to create gigantic grief.
See, all those who have insisted the debt was going to result in hyperinflation have been hard pressed to explain why prices have just not been going up much, or fast. Well, if China is experiencing heavy deflation, it would more than offset inflationary tendencies here.
Remember this? Seems growing the economy can’t be done by Stimulus, in the long term. China also had no debt like the USA does.
Chinese economic stimulus program
http://en.wikipedia.org/wiki/Chinese_economic_stimulus_program
he 2008–2009 Chinese economic stimulus plan is a RMB¥ 4 trillion (US$ 586 billion) stimulus package announced by the Central People’s Government of the People’s Republic of China on 9 November 2008 as an attempt to minimize the impact of the global financial crisis on the world’s second largest economy.