Cheers!
Posted on 11/10/2009 7:51:15 PM PST by blam
3 Arguments for China’s Looming Economic Crash
By Rocky Vega
11/10/09 Stockholm, Sweden – Billionaire hedge fund investor Jim Chanos, the famous Enron short seller, is in the camp of professionals who view China as headed toward a crash. The China bears suspect that the economy is not as healthy as portrayed, and that many of its components that are actually stronger have become overheated. Basically, they believe that the “entire system is teetering toward collapse.”
Here are three factors that suggest serious problems in China…
* First, they claim the huge $900 billion spent by the government on economic stimulus to support the $4.3 trillion economy is underperforming.
* Second, China could be cooking its books. There are notable inconsistencies in official statistics. They highlight that car sales are rising dramatically but gasoline consumption is flat, one of many unexplained economic phenomena.
* Third, the Chinese potentially face problems with overcapacity. For example, China uses more cement than the rest of the entire world combined, and it increased production by an amount greater than US, India, and Japan’s combined consumption. It’s one example, but the concern is that China will not be able to find a market for many of the goods it is producing in massive amounts.
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(Excerpt) Read more at dailyreckoning.com ...
China bump
Cheers!
Never trust a guy named Rocky Vega
Chinese tiger may be in trouble.
They need our money to keep their economy going, but we can live without them.
It’s easy to root for China’s downfall. But we must remember, they are financing our debt along with Japan.
$900 billion spent by the government
^
and 90% of those jobs will be in the private sector. Where have I heard that lie before?
(February 17, 2009: American Recovery and Reinvestment Act = 111th United States Congress)
^
Meaning I don’t think they got private sector growth. It was only Government spending that increased their GDP, same result, they just didn’t go into $mega-debt
Its George Bush’s fault.
Yes...this is true. What happens if China collapses. Can anyone paint the picture of events and the overall affect that it will have on the U.S. and the rest of the world?
Human sacrifice, dogs and cats living together... mass hysteria! ...
I just spent a couple of weeks in China. What a frickin mess. The concept of them as a world power is so hard to believe - the problems there are so endemic and impossible to overcome that the eventuality of collapse is inescapable.
It is past time to demand that the RMB become de-linked to the US dollar so that it trades at its actual value. Once that happens, China will collapse. Quickly. Which is why China is pushing so hard to remove the US dollar as the world’s reserve currency.
Taxis and public transportation are rapidly being moved from gasoline to natural gas/LPG fuel, so that gasoline consumption by these vehicles offsets the new vehicles on the road.
Seriously, in most large Chinese cities, the taxi IS the dominant form of transportation for most people as it's cheap, quick, and flexible. Even if the ride is scarier than any Indiana Jones chase scene!
I guess all that wealth redistribution via free trade with Communist China did not work...
I just wonder how the Free Trader Globalists will explain away this...when Communist China’s economy tanks.
When Red China implodes, their portion of US debt purchasing will be maintained by the US taxpayer leading to hyper-inflation. Means, prices will rise but not due to demand. No telling what the Red military will do.
The longer we keep the charade going with the thin air finance and bailouts and stimuli the harder the final fall will be. This “recession” should have been a sharp Panic of a year’s duration, maybe two, but instead promises to be a long slide involving at some point a major collapse, not a Panic, a COLLAPSE.
Prices will rise meaning housing, etc. but the cost to live in any house will rise also, right? Taxes, energy, etc. At the same time will the market rise? Or will it collapse because the economy, GDP,etc. sucks?
You are asking a lot there. 1st Stock markets are used as a safe haven to park money to get a return that is higher than a bond of 1% - 4% as large companies have positioned themselves for worldwide markets, not relying on US consumers any longer. Unfortunately that only works if the bottom is in and economic recovery has begun worldwide. Means, we probably crash again to establish a bottom since the banking crisis is not over yet.
Is owning a house really necessary? You can always rent. Government inducements make a bad situation worse by interfering with normal ebb and flow of markets. Housing will correct longer and harder before interest rates begin rising which then helps home values.
Things you need go up in price as electronic debt creation further erodes confidence in the US$ regardless of inflation/deflation. As government tries to restart the economy by countering deflation (debt) with inflation (more money is actually more debt) things can only get worse.
Boils down to how governments handle the crisis. So far, clueless, unless positioning for re-election. Actually what we need is controlled growth but greed refuses to cap their profits.
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