Chinese economy ready to 'blow up' - Mish Shedlock

[HenryAlan]

YouTube - Chinese economy ready to 'blow up' - Mish Shedlock (http://www.youtube.com/watch?v=6TCnBrnGCvU)

[j6p]

I stoped listening to this doofus a long time ago.

[NerveShocker]

Mmm.. (goes to see what Schiff says)

[nandnor]

nvm

[ctiger2]

Marc Faber said all economies have booms and busts. China will have a bust at some point. It doesn't mean they won't recover and start to grow again. Their trend is up.

[InterestedParticipant]

Everything that Mish is saying in this interview is supportable. He is right-on point. If you don't think so, then state your case, and back it up with some specific comments.

Mish's Global Deflationary Scenario

The current situation in China is what MISH calls a "deadly embrace," where US pressure to revalue their currency upward is causing more speculative money to flow into China, which will cause a larger crash when that speculative money exits after China's currency is revalued upward. We are moving toward a huge crash of the Chinese currency, with a consonance of Global economic problems all coming to a head at the same time.

Below are bullet points taken from the following videos, which present Mish's thesis for what he describes as a "Massive Deflationary Scenario", with the next leg-down pending. There is no recovery coming.


"Isn't the only hope for the planet that the industrialized civilizations collapse? Isn't it our responsibility to bring that about?"

Maurice Strong,
1992 Rio Earth Summit


YouTube - On the Edge with Max Keiser - 12 February 2010 - (2/3) (http://www.youtube.com/watch?v=UbZ3k8phxn8)

YouTube - On the Edge with Max Keiser - 12 February 2010 - (3/3) (http://www.youtube.com/watch?v=VNZn8OXR0Fo)

China Importing Commodities at too high level;
Chinese overproducing: too many good & services that Chinese consumer can not afford & cannot be exported (export demand is shrinking);
China printing money, money supply growing 30% annually (fastest growth in the world).
Constructing cities, malls, residential and commercial buildings that no one can afford (remain vacant);
China is maintaining high level of production in hopes that global economy bounces, but consumers [internationally] are not willing to increase spending;
Trillions in bank loans are now in default;
Banks internationally are insolvent;
Market sentiment is that Chinese command economy will continue to support current level of growth indefinitely (Chinese banks forced to lend by state rule, irrespective of investment quality);
China economy is overheating and they will have to cut back, causing serious political unrest;
International capital continues to flow into China due to it perceived high GDP (but China includes ALL spending & money printing in GDP, so it's artificially inflated);
Hedge Fund have poured massive amounts into China, which is sitting in Chinese banks.
US putting pressure on China to revalue its currency upward, the Renminbi (RMB), but China is resisting;
If China were to float the RMB on the Int'l markets, there is no guarantee the RMB would rise;
Hedge funds and International investors are waiting for RMB revaluation, at which time these investors will remove their investment at a profit (assuming RMB is revalued upward);
China is forced to retain massive reserves in US Dollars in order to protect against a possible pullout of foreign investment capital from Chinese banks;
"Beggar-thy-neighbor (http://en.wikipedia.org/wiki/Beggar-thy-neighbor) Scenario" happening globally
US, China & Japan, & Europe all want to weaken their respective currencies to increase their own exports.
Japan has an aging population and demographic, and therefore they have expunged their savings, as they are servicing the cost of caring for the aged. (Japan is now net sellers of Japanese treasuries);
Huge property bubble in Australia & Canada that is ready to blow up;
Spain property bubble burst causing 20% unemployment there;
10-11M unemployed in USA who are actively seeking employment but cannot find employment;
Massive union and pension problems in the USA that are starting to make USA resemble what is happening now in Greece.
Gov'ts promised the public adequate retirements without the need to save, which is most severe in the USA where pensions made enormous financial commitments to future retirees, especially union retirees;
Taxes are increased in order to support pension commitments to [union] retirees;
Non-pension fund retirees who thought they had sufficient savings or house value to retire, are now unable to retire and therefore have re-entered the job market, competing against young-adults (with enormous college loans) for jobs;
Young-adults are not able to obtain employment, so are moving back home, and therefore apartment rents are falling.

[ctiger2]

YouTube - Chinese govt advise gold buying - why? What is their plan? (http://www.youtube.com/watch?v=YPXncTuwFIE)

[InterestedParticipant]

I can't believe the Chinese Elite bought into the Globalist's trap....

I'm sure replacement Chinese Elite (Globalist Shills) are waiting
in the wings, ready to take over after the Chinese public rise-up against
the current Chinese elite. Then, they'll have total control of China as well.

You know, this is probably one of the most important threads ever started
at RPF, and it hardly gets any attention. Instead, people are arguing about
Glen Beck, the former Rodeo Clown.

Thanks for posting!

[dannno]

The Chinese are able to do this due to their currency anti-bubble (as opposed to the USD bubble) which Mish doesn't seem to ever be able to comprehend.

I don't think there is anything to support what he's saying at all.

If China starts having a tough time, all they have to do is de-peg their currency and it will gain in value and they will be able to afford all this shit they are producing.

[InterestedParticipant]

The Chinese are able to do this due to their currency anti-bubble (as opposed to the USD bubble) which Mish doesn't seem to ever be able to comprehend.

I don't think there is anything to support what he's saying at all.

If China starts having a tough time, all they have to do is de-peg their currency and it will gain in value and they will be able to afford all this shit they are producing.
First, please explain "Currency anti-bubble".

Second, if China's currency rises then all the Int'l speculator's money will leave Chinese banks in profit taking and China's exports will tank due to the higher cost of their goods to consumers who are not using RMB's, thereby crashing China's domestic economy and depleting their USD reserves.

[ctiger2]

First, please explain "Currency anti-bubble".


The Yuan is sorely undervalued. If they depeg from USD...

[InterestedParticipant]

The Yuan is sorely undervalued. If they depeg from USD...
Mish's point is that there is no guarantee Yuan (RMB) will rise if depegged. I'm not going to argue that point, because the Chinese are under tremendous pressure from the US to increase the value of the Yuan (RMB). However, I don't see how the Yuan (RMB) can be undervalued when the Chinese elite's are printing 30% more currency each year.

Further, I do not see how depressing the Yuan (RMB) suppresses bubble formation. On the contrary, keeping Chinese currency low maintains high goods & services exports and high capital inflows (under expectation that currency will be revalued higher). So, if anything, a low Yuan (RMB) is a bubble creator, not a bubble deflator.

Here's Marc Faber's take, and he says China Economy Will Slow, Hurt Commodities.


China’s economy will slow down “meaningfully” and may even be at risk of a “crash” because of the nation’s excess capacity and as loan growth slows, investor Marc Faber said.

China’s fragile economy may undermine industrial commodities in the “near term,” the publisher of the Gloom, Boom and Doom report said. Faber added that he’s pessimistic on the euro as a possible bailout of Greece by other European countries increases deficits in the region.

“The economy, for sure, will slow down meaningfully this year,” Faber said in an interview with Bloomberg Television in Hong Kong. “It has the potential to crash because of the overcapacities that have developed, and when loan growth slows down, we don’t know how the economy will react.”

A possible crash in China’s economy will be “disastrous” for raw materials used in industrial production, Faber said. He instead favors commodities including wheat, corn and soya beans and also said he doesn’t see a “huge downside risk” for gold.

http://www.bloomberg.com/apps/news?pid=20601080&sid=a.yJy6cz_.8Y

[youngbuck]

Here's Marc Faber's take, and he says China Economy Will Slow, Hurt Commodities.

China’s economy will slow down “meaningfully” and may even be at risk of a “crash” because of the nation’s excess capacity and as loan growth slows, investor Marc Faber said.

China’s fragile economy may undermine industrial commodities in the “near term,” the publisher of the Gloom, Boom and Doom report said. Faber added that he’s pessimistic on the euro as a possible bailout of Greece by other European countries increases deficits in the region.

“The economy, for sure, will slow down meaningfully this year,” Faber said in an interview with Bloomberg Television in Hong Kong. “It has the potential to crash because of the overcapacities that have developed, and when loan growth slows down, we don’t know how the economy will react.”

A possible crash in China’s economy will be “disastrous” for raw materials used in industrial production, Faber said. He instead favors commodities including wheat, corn and soya beans and also said he doesn’t see a “huge downside risk” for gold.
I posted a thread about this a couple months ago: http://www.ronpaulforums.com/showthread.php?t=221117

Got the same reply.

[Working Poor]

The Chinese need to get back into the Tao do a little tai chi and stop acting like westerners

[InterestedParticipant]

interesting comment from a poster on Mish's blog...


I highly doubt Yuan will Surge - that will kill China's export industry. IMHO, Yuan is overvalued, not undervalued at this point. China prints more money than US in terms of GDP percentage. The domestic buying power of Yuan is less than dollar even in current exchange rate. I wholeheartedly agree with Mish that Yuan would go lower, rather than higher, if allowed to float freely.

[nandnor]

nvm

[InterestedParticipant]

Guys, it doesnt matter whether their currency is over or undervalued, the key point is the monetary inflation that causes interest rates to fall below market price and move savings and borrowing out of balance. You REALLY need to brush up on your Austrian economics.
The international speculators market has the expectation that the Yuan is undervalued, and that it will rise. It is this expectation (profit from currency speculation) that is driving the influx of capital into China, and the Chinese Elites are forcing that capital into the economy through development, which is being converted in to unused excess inventory. See clip below for a commenter at Mish's blog that confirms this overcapacity...


China_Guy says:
Yesterday, 9:55:08 AM

“Love the China stuff. I last submitted 1.5 years ago. I lived in China full time with my family for Aug.2002 / Aug.2006. 4 years less a week. I had a "Z" visa.

I was back in the Shanghai / Suzhou area just three weeks ago for business. Had a couple of weekends of free time, had several foot messages, visited my old friends - Chinese Nationals and Expats. Lots of interesting things.

- I travelled the countryside to Tongli. I passed (litteraly) miles of empty factories. Brand new, no windows, fresh outside paint, waiting for tenants. Factory over supply confirmed!
- To and from my work each day. 45 minute drive thru farm fields 3 years ago. Today - high rise apartment blocks. Some more than two years old. Dozens and dozens of these buildings with only one or two lights on. My local friends tell me the apartments have been empty like that for more that 2 years. Apartment dwelling over supply confirmed!
-I saw with my own eyes, whole sub-divisions of new town homes. Just like the factories. Fresh exterior paint, no windows, now tenants. I've seen similar a few year back but they had windows then? More oversupply confirmed!
-My very close friend took me to his latest purchase (he has about 6 homes, only one occupied by him). He paid $350K USD for the place. It will cost him another $100K usd to do the renovations. Another town home sub-division with no occupancy. It did have grass and windows. The same place could be bought in Toronto for less than $400K. How do Chinese afford it?? I know their savers but ....?
- I asked my friends if they know about Japan, 20 yrs of housing decline. "Yes" the know. "We worry". "We know there is a bubble but don't know for how long".
-Gold selling. In Suzhou, many stores that sell gold. Made legal to do so just more than a year ago. Many young men wearing big gold chains around their necks. Never saw that before.
- Traffic jams. There were only taxi there in Aug of 2002. They are selling 4,000 cars a day in Suzhou. When I left 3 years ago, it was 500 per month.
- The air was bad, I smelt the pollution 3 days in a row. In my 4 years in Suzhou, never smelt it once. Returning to Shanghai on way home, the air in Shanghai was cleaner that Suzhou.

Enough for now, I can confirm bubbles and that the locals are nervous. My first trip to China was 10 years ago, I've never seen it like this.

BTW, a buddy of mine is still in China. He travels to many parts of China with the job. I asked him WTF was happening. He said everywhere he goes in China it is the same!! Scary for me guys.

ps - this blog is blocked in China.

I also agree with your point, however, that monetary inflation causes interest rates to fall below market price and move savings and borrowing out of balance.

Both issues are relevant and important, and both are helping to create a bubble scenario that is contributing to an ever larger crash. Just how the Chinese public react to such a crash will most likely determine China's future. But you can bet money that the Globalist will attempt to leverage any political instability in an effort to seize control of political power in China.

[dannno]

So.. how much is China in debt?

[hugolp]

YouTube - Chinese govt advise gold buying - why? What is their plan? (http://www.youtube.com/watch?v=YPXncTuwFIE)

This guy makes a big mistake. If China makes Yuan gold coins it is increasing the money supply.

The chinese goverment is encouraging its citizens to save in gold and silver because they know fiat currencies will devaluate and want their citizens to conserve their savings, so they can have a strongest economy in the future. The chinese goverment still wants its country to grow, he is not in the looting phase yet, since it needs a strong country to fight against other still stronger countries.

And why is this in General Politicis and not in economics.

[silverhandorder]

Yeah a country doing most of world's production is going to somehow implode? Nosense. Monetary policy is identical between US and China however China has an industrial base we could only dream of.

[InterestedParticipant]

If you grow the country too fast, faster than the goods and services can be consumed or that there is demand for, then all of a sudden, you pull-out most of the capital that is facilitating that false growth, you are going to have a contraction, or decreased need for production of more goods and services as you are at over-capacity.

The size and severity of the decline will be proportional to the size and severity of overcapacity that has been built.

You guys are assuming that production is being driven by demand, but is it not. It is being driven by Int'l capital, who is purposely developing a bubble so that:


they may take huge profits before the bubble bursts
they can create political instability for the current Chinese elite, with the goal that they can replace the current elite with a new class who are loyal to the Globalists.


The reason China has so many dollars as the rest of the World has sent them there in speculation, not because of trade. Do you really think they can maintain their current rate of economic growth, even with their savings, if this speculative capital pulls out?

[torchbearer]

If you grow the country too fast, faster than the goods and services can be consumed or that there is demand for, then all of a sudden, you pull-out most of the capital that is facilitating that false growth, you are going to have a contraction, or decreased need for production of more goods and services as you are at over-capacity.

The size and severity of the decline will be proportional to the size and severity of overcapacity that has been built.

You guys are assuming that production is being driven by demand, but is it not. It is being driven by Int'l capital, who is purposely developing a bubble so that:


they may take huge profits before the bubble bursts
they can create political instability for the current Chinese elite, with the goal that they can replace the current elite with a new class who are loyal to the Globalists.


The reason China has so many dollars as the rest of the World has sent them there in speculation, not because of trade. Do you really think they can maintain their current rate of economic growth, even with their savings, if this speculative capital pulls out?

these are very good points.

[hugolp]

If you grow the country too fast, faster than the goods and services can be consumed or that there is demand for, then all of a sudden, you pull-out most of the capital that is facilitating that false growth, you are going to have a contraction, or decreased need for production of more goods and services as you are at over-capacity.

The size and severity of the decline will be proportional to the size and severity of overcapacity that has been built.

You guys are assuming that production is being driven by demand, but is it not. It is being driven by Int'l capital, who is purposely developing a bubble so that:


they may take huge profits before the bubble bursts
they can create political instability for the current Chinese elite, with the goal that they can replace the current elite with a new class who are loyal to the Globalists.


The reason China has so many dollars as the rest of the World has sent them there in speculation, not because of trade. Do you really think they can maintain their current rate of economic growth, even with their savings, if this speculative capital pulls out?

I agree that China has a bubble. Still think its not as bad as in the USA or Europe.

But its not because of overproduction but because of a deformed capital structure.

[InterestedParticipant]

I agree that China has a bubble. Still think its not as bad as in the USA or Europe.

But its not because of overproduction but because of a deformed capital structure.
I would argue that "deformed capital structure" is a the direct cause of over-production and over-construction.

[hugolp]

I would argue that "deformed capital structure" is a the direct cause of over-production and over-construction.

Well, over-production is a keynesian concept (and its wrong) since they only look at whole aggreagates. In reality you are doing too much of something, but too little of other things (the things that people really wants), hence the deformed capital structure. It is not a problem of producing too many things, the real problem is not producing what people really want. I have tried to explain this better in the economic section in an answer to a similar post you made.

[InterestedParticipant]

Well, over-production is a keynesian concept (and its wrong) since they only look at whole aggreagates. In reality you are doing too much of something, but too little of other things (the things that people really wants), hence the deformed capital structure. It is not a problem of producing too many things, the real problem is not producing what people really want. I have tried to explain this better in the economic section in an answer to a similar post you made.
Yup, I think I understand your point. So, as I asked in the other thread, what would you label this condition of empty buildings, empty factories, empty homes and empty cities? I agree that malformed capital creates the condition, but I'm looking for a way to describe the condition without having to write paragraphs each time.

[Jeros]

A couple of points of skepticism. The Chinese are the most efficient producers of goods anywhere, period. Nobody can manufacture equivalent goods for a lower price anywhere. Sure, just like any other fiat money monetary system there may be bumps in the road, credit will retract, and bubbles will collapse, but the countries that produce goods and have current account surpluses are the countries that do better in any monetary environment. The financial centers of the world are slowly gravitating to Southeast Asia, just as they gravitated to the US from Europe after we became the efficient manufacturers of the world.

China is also not a command economy. It is nothing like Maoist China and nothing like soviet Russia. There is some regulation that takes place, just like any other country in the world, but as an entrepreneur there, it is far easier to start a business, and direct it how you see fit, than it is in American. There is a small amount of bureaucratic oversight. It is much more capitalistic than America. He also talks about the possibility for social unrest in China, as if it is some how more unstable than any other place in the world. I would argue that it is more stable. The older generation has a mixed sense of patriotism and the younger generation mostly doesn't care. Sound familiar?

The best point he made is that China depends on massive amounts of exports and foreign investment. Not because those are necessarily bad, but because if the world economy turns into a shit storm, China will suffer just like everybody else. Maybe worse than everybody else, and at that point, among the few investments that would do well are the monetary metals gold, silver, and possibly copper, which both Schiff and Mish recommend. By "do well" I mean wont go to zero like everything else. So China is a good hedge against total collapse. If society doesn't collapse, China will do well.

I like Mish a lot. He is a very good investigative Journalist. He has some great ideas, but he doesn't give alternative theories enough credit. He is absolutely confident the economy will follow what he foresees. Even the smartest of investors are wrong quite often. A smart investor should still hedge against what is perceived as a "sure thing." Schiff too has been wrong on occasion. He overlooks the ability of the market to maintain irrationality. He relies too much on logical analysis when the rest of the world is illogical, and though he may be right in the long run, the market can stay irrational longer than you can stay solvent.

[Jeros]

If you grow the country too fast, faster than the goods and services can be consumed or that there is demand for, then all of a sudden, you pull-out most of the capital that is facilitating that false growth, you are going to have a contraction, or decreased need for production of more goods and services as you are at over-capacity.

The size and severity of the decline will be proportional to the size and severity of overcapacity that has been built.

You guys are assuming that production is being driven by demand, but is it not. It is being driven by Int'l capital, who is purposely developing a bubble so that:


they may take huge profits before the bubble bursts
they can create political instability for the current Chinese elite, with the goal that they can replace the current elite with a new class who are loyal to the Globalists.


The reason China has so many dollars as the rest of the World has sent them there in speculation, not because of trade. Do you really think they can maintain their current rate of economic growth, even with their savings, if this speculative capital pulls out?

As speculative money leaves China, the price of the respective assets go down. If China is still producing goods for the rest of the world, many assets will still have a solid return on investment. As the price of the assets go down, the return on investment will go up, making the assets more attractive. As some pull out, others will take their place. Speculators are not going to let performing assets sit at a ridiculously undervalued level.

China doesn't really have a prominent culture of elitism. Even the CEO's and CFO's of many companies earn around $60,000 to $80,000 a year, which isn't a great amount in an domestic environment of appreciating asset prices. Production is being driven by manufacturing, which is healthy as long as there are not warehouses full of unsold junk. There is no overcapacity. There are only price distortions. Those price distortions will adjust as loans are defaulted on and capital readjusts. The price of unused capital will come down until people are able to use them. A free economy, which China arguably has, is not stationary. Just because an out of balance or distorted condition exist doesn't mean resources will not reorganize to compensate.

Again, this all rest on the hope that the world doesn't sink into a permanent state of unrest, that peak oil is compensated for by other energy sources, that the nations of the world do not engage in total war, and other such optimistic nonsense. I am preparing for both scenarios.

[InterestedParticipant]

As speculative money leaves China, the price of the respective assets go down. If China is still producing goods for the rest of the world, many assets will still have a solid return on investment. As the price of the assets go down, the return on investment will go up, making the assets more attractive. As some pull out, others will take their place. Speculators are not going to let performing assets sit at a ridiculously undervalued level.
EXACTLY. It's a takeover by the Globalists!!!!

[dannno]

So.. how much is China in debt?

:confused:

There are so many of these China disinformation threads I STILL don't know if this has been answered yet.

[dannno]

these are very good points.

WHY is speculative capital going to pull out?

This guy is trying to convince us that too much capital and too much production is a bad thing. It's only bad if the debt is exceedingly worse.

China has the best productive capacity in the world. None of this stuff in this thread that I am reading makes any sense.. I mean yes, they are doing some destructive things, but they are still far better off than anybody because they have the production capacity and I don't believe they are insanely in debt like we are.

[torchbearer]

WHY is speculative capital going to pull out?

This guy is trying to convince us that too much capital and too much production is a bad thing. It's only bad if the debt is exceedingly worse.

China has the best productive capacity in the world. None of this stuff in this thread that I am reading makes any sense.. I mean yes, they are doing some destructive things, but they are still far better off than anybody because they have the production capacity and I don't believe they are insanely in debt like we are.

what i agree with is that central planning leads to malinvestment of capital. it leads to the production of too much for too long of things not in demand.
not saying china is worse off than us- not by a long shot.
but they are about to experience a side-effect of their faulty state controlled capitalism.

[dannno]

what i agree with is that central planning leads to malinvestment of capital. it leads to the production of too much for too long of things not in demand.
not saying china is worse off than us- not by a long shot.
but they are about to experience a side-effect of their faulty state controlled capitalism.

Ya, the side effect will be a huge increase in economic output instead of a gigantic increase.

[dannno]

I don't want to discredit myself because I don't have access to all these anti-Chinese propaganda threads, but I've asked about China's debt 4 times now and I am not aware of a reply (though again one could very well exist)

[torchbearer]

I don't want to discredit myself because I don't have access to all these anti-Chinese propaganda threads, but I've asked about China's debt 4 times now and I am not aware of a reply (though again one could very well exist)

according to our CIA: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html?countryName=China&countryCode=ch&regionCode=eas&rank=101#ch

China's public debt is 18.20% of its GDP.
China's GDP is $4.33trillion (http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:CHN&dl=en&hl=en&q=what+is+china's+gdp)
using that info- you can figure out its debt.

[Jeros]

according to our CIA: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html?countryName=China&countryCode=ch&regionCode=eas&rank=101#ch

China's public debt is 18.20% of its GDP.
China's GDP is $4.33trillion (http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:CHN&dl=en&hl=en&q=what+is+china's+gdp)
using that info- you can figure out its debt.

The 18.2% of GDP is a more relevant than the actual amount of debt. Either way, they are both very low relative to the rest of the world.

[InterestedParticipant]

The 18.2% of GDP is a more relevant than the actual amount of debt. Either way, they are both very low relative to the rest of the world.
You do realize that China includes central bank money printing in its GDP figures?

[InterestedParticipant]

WHY is speculative capital going to pull out?
Because it is a globalist pump and dump. It's a take-over. Here, I'll let our Founders explain....


"first by inflation, then by deflation, the banks...will deprive the people of all property"

-Thomas Jefferson

[dannno]

http://www.reuters.com/article/idUSTRE61E31Z20100215

China has a different problem: its government is under attack for conservative spending policies that, critics say, are damaging long-term productivity prospects and contributing to the economic imbalances underlying the global financial crisis.

The International Monetary Fund and World Bank have long called for China to ramp up social spending so its citizens have less need to save for a rainy day and can consume more. Still, recent advice to Beijing from the Organization for Economic Co-operation and Development was remarkably blunt.

"Looking ahead at the exit from the ongoing fiscal stimulus programs, it will be important not to revert to budget surpluses," the OECD said in a report this month. "China's public finance position is remarkably strong and can readily accommodate a permanently high level of government spending."




Now, obviously the above logic is complete bullshit, but interesting to read nonetheless.


I'm just really weary of anything Mish says cause he has used some really hair-brained logic in the past and he is constantly being proven wrong. Peter on the other hand, will be right in the long run. China has the infrastructure to be successful and their government is doing much less harm than others.

[Jeros]

You do realize that China includes central bank money printing in its GDP figures?

All central banks fudge. The US includes Chinese money printing in their figures! That is, all the money they loans us, as well as the money multiplier effect of all the money they loan us.

Even if you take out any money printing fudging of the Chinese, their debt level is still minuscule compared to any other large economy. This doesn't mean their perfect. I don think any body is arguing that. They will have problems, but their situation is much better than other developed economies, so it is ingenuous to say "the Chinese will suffer so pull all your money out," while not mentioning that the rest of the world is worse off. Since the rest of the world is worse off, anybody who invest based on evaluations of national economies shouldn't shun China.

Now, if you are just the type who thinks the entire world if fucked, then yeah, take your money out of China and go buy some Ammo.

[dannno]

according to our CIA: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html?countryName=China&countryCode=ch&regionCode=eas&rank=101#ch

China's public debt is 18.20% of its GDP.
China's GDP is $4.33trillion (http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:CHN&dl=en&hl=en&q=what+is+china's+gdp)
using that info- you can figure out its debt.

Great, their surplus is still almost 10% GDP....soo.....WAAAYYYY better of than we are..


All central banks fudge. The US includes Chinese money printing in their figures! That is, all the money they loans us, as well as the money multiplier effect of all the money they loan us.

Even if you take out any money printing fudging of the Chinese, their debt level is still minuscule compared to any other large economy. This doesn't mean their perfect. I don think any body is arguing that. They will have problems, but their situation is much better than other developed economies, so it is ingenuous to say "the Chinese will suffer so pull all your money out," while not mentioning that the rest of the world is worse off. Since the rest of the world is worse off, anybody who invest based on evaluations of national economies shouldn't shun China.

Now, if you are just the type who thinks the entire world if fucked, then yeah, take your money out of China and go buy some Ammo.

[revolutionisnow]

China can always just start selling to themselves and become a a consumer economy can't they?

[dannno]

China can always just start selling to themselves and become a a consumer economy can't they?

Ya, sure, why not?

They don't have very much debt at all. They aren't saving like they were a few short years ago, but they HAVE the capital and the productive capacity in their country at the moment. Think of this as a game of musical chairs. Greece and Iceland didn't get a chair. The US won't get a chair. China's already sat down.

IP claims that they will pull the capital out.. but all they can do is pull out the debt, which isn't much, and they aren't going to take away all the manufacturing capability because it is too expensive to move. Instead it will be sold to the highest bidder and much of it will continue to be utilized.

We are screwed because we don't have manufacturing capability, so once we stop having the ability to go further into debt we won't be able to buy anything. We'll have to start over. The Chinese don't have to start over because they have the manufacturing capabilities.

Mish seems to look at selective numbers but doesn't understand the broad picture of how capital works. That's why he is a fraud and Peter Schiff is the man.

[InterestedParticipant]

All central banks fudge. The US includes Chinese money printing in their figures! That is, all the money they loans us, as well as the money multiplier effect of all the money they loan us.

Even if you take out any money printing fudging of the Chinese, their debt level is still minuscule compared to any other large economy. This doesn't mean their perfect. I don think any body is arguing that. They will have problems, but their situation is much better than other developed economies, so it is ingenuous to say "the Chinese will suffer so pull all your money out," while not mentioning that the rest of the world is worse off. Since the rest of the world is worse off, anybody who invest based on evaluations of national economies shouldn't shun China.

Now, if you are just the type who thinks the entire world if fucked, then yeah, take your money out of China and go buy some Ammo.
I'm saying pull your money out. That is exactly what I am saying.

Your food for larger fish right now. And when meal time comes, no scraps will be left for any of the small fish. They suck everyone into the hype, then turn on the vacuum cleaner before anyone knows what's happening.

How many times do we have to go through this same BS, and argue the same stupid points? It's a setup. And if you are not on the inside, you're the one being setup.

[dannno]

I'm saying pull your money out. That is exactly what I am saying.

Your food for larger fish right now. And when meal time comes, no scraps will be left for any of the small fish. They suck everyone into the hype, then turn on the vacuum cleaner before anyone knows what's happening.

How many times do we have to go through this same BS, and argue the same stupid points? It's a setup. And if you are not on the inside, you're the one being setup.

Ya, and as usual this "Mish" guy is warning us, and not Peter Schiff :rolleyes:

So how are those gold shorts doing for you?

[InterestedParticipant]

Ya, and as usual this "Mish" guy is warning us, and not Peter Schiff :rolleyes:

So how are those gold shorts doing for you?
Because Schiff is a fraud. I discussed this in detail early last year. The discussions are here in this forum, just search for my username and schiff's name.

[dannno]

Because Schiff is a fraud. I discussed this in detail early last year. The discussions are here in this forum, just search for my username and schiff's name.

Ya, those discussions are what completely turned me off from Mish. They don't make any sense and they have been proven wrong.

Why anybody here would continue to trust his faulty analysis I haven't a clue.

So how much $$ have you made on those gold shorts?

[Jeros]

I'm saying pull your money out. That is exactly what I am saying.

Your food for larger fish right now. And when meal time comes, no scraps will be left for any of the small fish. They suck everyone into the hype, then turn on the vacuum cleaner before anyone knows what's happening.

How many times do we have to go through this same BS, and argue the same stupid points? It's a setup. And if you are not on the inside, you're the one being setup.

Ive never argued with you before, so I am unsure of the number of times or what the points are.

Mish isn't saying there are people who are controlling the impending decline in China, he is saying that there are fundamental flaws in their economic system that are going to lead to a decline, which is false and fails to acknowledge the rest of the worlds comparative situation.

I think you are giving the powers behind the scenes too much credit, or not enough. If China falls, what do you think is going to happen to all those dollar reserves they are holding? They will be thrown onto the market for stimulus. That will be the event that triggers the ultimate decline of the dollar. I doubt they have the ability to effect anything significantly without crashing the entire system. If that's the case, then we are all screwed, and as I have said before, I am preparing for it but hedging my bets.

I also wish you wouldn't pick and choose what to respond to. It seems like you are acknowledging only the information that suites your argument.

[InterestedParticipant]

Ive never argued with you before, so I am unsure of the number of times or what the points are.

Mish isn't saying there are people who are controlling the impending decline in China, he is saying that there are fundamental flaws in their economic system that are going to lead to a decline, which is false and fails to acknowledge the rest of the worlds comparative situation.

I think you are giving the powers behind the scenes too much credit, or not enough. If China falls, what do you think is going to happen to all those dollar reserves they are holding? They will be thrown onto the market for stimulus. That will be the event that triggers the ultimate decline of the dollar. I doubt they have the ability to effect anything significantly without crashing the entire system. If that's the case, then we are all screwed, and as I have said before, I am preparing for it but hedging my bets.

I also wish you wouldn't pick and choose what to respond to. It seems like you are acknowledging only the information that suites your argument.
All the evidence supports that the Globalists seek a global crash, but only in a scenario where they control the political infrastructure and ownership of the assets post-crash. The problem in discussing this material resides in the fact that people cannot come to grips with these goal sets, and therefore arguments tend to be illogical. When this goal is seen, the logic makes sense. But yes, MISH does not understand this either.

I've posted this many time before, but I don't think people take it seriously, nor do they seem to appreciate that this is just anther pump 'n dump....


"Isn't the only hope for the planet that the industrialized civilizations collapse? Isn't it our responsibility to bring that about?"

Maurice Strong,
1992 Rio Earth Summit

You'd think people would see what's going on after so many countries have been victimized.

[dannno]

You'd think people would see what's going on after so many countries have been victimized.

Well it certainly isn't sustainable, but most countries in China's position, like the US once was in after WWII, go through a gilded age after they've collected massive capital and productive capacity and the government decides to pump them. The complete crash comes after they've exhausted all of the capital through debt. That's about where we are now.

China is destroying individual's savings through their creation of money, but their trade surpluses help to offset that in order to retain their productive capacity and manufacturing infrastructure. They have decades probably before I would consider a total collapse, but they will certainly have their ups and downs on the way if they continue the Keynesian path... but mostly ups for a while.