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China-geddon: A China crash will be scarier than Europe
Firstpost ^ | 12/02/11 | Venky Vembu

Posted on 12/07/2011 11:52:05 AM PST by TigerLikesRooster

China-geddon: A China crash will be scarier than Europe

Venky Vembu Dec 2, 2011

Say you’re at a railway station, waiting for the slow train to eurogeddon. You’ve been told that the eurozone is in deep trouble with all those piles of debt, that it will fall apart inevitably, dismembering the euro and inflicting pain and misery around the world.

Months go by, and although there’s a lot of shunting and hooting, and lots of frenetic activity, the eurogeddon train doesn’t steam in. You begin to grow impatient, and wonder if the train is coming at all. And then in the way that we all do, you crane your neck over the platform in the direction from which you expect the train to come.

And then, before you can say PIIGS, a monstrously big train steams in from the other direction on the same track – and knocks you down flat.

/snip

Speaking at a closed-door seminar in Shenyang a month ago, Lang revealed, among other things:

China’s economy, contrary to claims that it grew by 9.1 percent, is actually in recession, and contracting by perhaps as much as 10 percent.

China’s inflation rate, again contrary to government statistics putting it at 6.2 percent, is close to 16 percent.

China’s debt burden is about $5.7 trillion, more than the size of its economy. Of this, local government debt makes up about $2.5 trillion, and the liabilities of state-owned enterprises about as much.

And with the interest burden mounting at an exponential rate, he reckons it will all unravel rapidly.

In his assessment, China is just as bankrupt as any European peripheral country, and when the “economic tsunami” hits, it will be worse than what Japan experienced in the 1980s.

(Excerpt) Read more at firstpost.com ...


TOPICS: Business/Economy; Foreign Affairs; News/Current Events
KEYWORDS: china; crash; distraction; economy; freetrade; globalism; propaganda

1 posted on 12/07/2011 11:52:14 AM PST by TigerLikesRooster
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To: TigerLikesRooster; PAR35; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; happygrl; ...

P!


2 posted on 12/07/2011 11:53:24 AM PST by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigerLikesRooster

Ruh Roh...


3 posted on 12/07/2011 11:56:58 AM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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To: TigerLikesRooster

I realy, realy hope this isn’t true...


4 posted on 12/07/2011 11:57:43 AM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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To: TigerLikesRooster

what bs

the majority of china is dirt poor. a ‘crash’ would effect a small portion of their population.

BUT, unlike the US, they have a manufacturing base through which to climb out

we don’t


5 posted on 12/07/2011 11:58:33 AM PST by sten (fighting tyranny never goes out of style)
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To: TigerLikesRooster
Bad news; China is way to big to be bailed out.

Good news; that fact is so obvious that not even the idiots at the Fed will try.

Bad news; China's collapse will raise the prices of nearly every manufactured good in the US.

Good news; With no alternative the US manufacturing and energy sectors will of necessity rebound. Bare, cruel and unavoidable necessity will drive out the EPA regulators, Union bosses and free trade traitors. It is chemotherapy for the US economy. It will make us sick as hell in the short run. But it will kill the cancer of progressives long before the body of the USA succumbs. And free of the progressive parasite we will rebound much faster.
6 posted on 12/07/2011 12:02:47 PM PST by GonzoGOP (There are millions of paranoid people in the world and they are all out to get me.)
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To: April Lexington
When Japanese economy crashed, it took a couple of years for people to realize that it had indeed done so. We will see the same response when China does. First they say it is not a hard landing but soft one. Then they say it may be serious but China will rebound in a short time. Next the spin is that it may not improve soon but could be managed for a while until the eventual turnaround happens. Then full-scale riots and political turmoil hits and spins will abruptly stop. Finally they will say they have known this all along despite their dismal track record to the contrary.
7 posted on 12/07/2011 12:04:41 PM PST by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigersEye

Ping.


8 posted on 12/07/2011 12:06:04 PM PST by Army Air Corps (Four fried chickens and a coke)
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To: TigerLikesRooster

With China’s history of revolution, this might not end well...


9 posted on 12/07/2011 12:07:16 PM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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To: TigerLikesRooster
If China's economy dumps so goes WalMart and Target. Darn, US business may have to start making stuff again.
10 posted on 12/07/2011 12:10:11 PM PST by drypowder
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To: April Lexington

China could show what the ‘full-scale’ unrest really means. It is not impossible that folks in other countries stop their rioting for the moment and watch China’s scale of unrest in awe.


11 posted on 12/07/2011 12:10:17 PM PST by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigerLikesRooster

I read some strategic assessment somewhere that said one of the most probable places for a limited nuclear exchange is a Chinese civil war.


12 posted on 12/07/2011 12:12:17 PM PST by redpoll
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To: drypowder

From the global point of view, no real recovery would start until both U.S. and China hit bottom, and EU along the way. Of course, between the crash bottom and recovery, we could see major wars breaking out.


13 posted on 12/07/2011 12:13:25 PM PST by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigerLikesRooster
I'm sick of hearing about all these bubbles and potential crashes. Much of it is based on worthless paper and even more worthless derivatives.

Let let them play themselves out and start the hell over.[without all the games]

14 posted on 12/07/2011 12:14:48 PM PST by wolfcreek (Perry to Obama: Adios, MOFO!)
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To: TigerLikesRooster

China dealing with an economic collapse is nothing but good news for her neighbors.


15 posted on 12/07/2011 12:21:40 PM PST by MeganC (No way in Hell am I voting for Mitt Romney. Not now, not ever. Deal with it.)
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To: TigerLikesRooster

China is an empire. As such, they are subject to the insurrectionist forces normal empires generally face.

Question I’d like answered is what does it cost the Central Government to garrison all of its territories.

The Mongolians can’t stand the Chinese. We know where Tibet stands, but we also know that Tibet is the one thing they will die holding onto (this is where all the water is).

Russia’s election was eye opening. Assad’s in trouble in Syria. Whither China?

You have to wonder whether China will look to be thrown into the briar patch like the USSR was. True, the USSR flew apart. However, Russia was then no longer obligated to prop up all of the satellites and territories. The cost of running the empire went down, since the cost of support was baked into the benefits of ‘freedom’ for the satellites and territories.

That the freedom only SORT of came to Ukraine and others is the best part for Russia. They can meddle at no charge in their sphere of influence.

Maybe China learns from this and cuts some of its ‘losers’.


16 posted on 12/07/2011 12:22:08 PM PST by RinaseaofDs (Does beheading qualify as 'breaking my back', in the Jeffersonian sense of the expression?)
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To: sten

There was a show on the travel channel last year called “An Idiot Abroad.” Ricky Gervais sent a friend of his, Karl Pilkington, to a different country each week to see the seven wonders of the world. One of the episodes was in China. If you can find it, watch it. China is a house of cards built ten times higher than anything anywhere else in the world.

They have a huge peasant population. Every time a farmer gets a tractor, fifty peasants are instantly unemployed and head towards the cities looking for work. They need to find jobs for millions of them every year and now they can’t. The government is trying to prevent peasants from entering the cities looking for work. It is, in the long run, untenable.


17 posted on 12/07/2011 12:23:31 PM PST by pie_eater
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To: TigerLikesRooster

The Chinese Government owns everything including labor. The communists in power just drop wages, raise the price of food and shelter for the public and print money when necessary.

That’s the ticket!


18 posted on 12/07/2011 12:25:39 PM PST by sodpoodle ( Newter the Democrats and newtralize the RINOS - the Senate, House & WHouse)
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To: TigerLikesRooster

It looks like China is trying to do to us what we did to the USSR...ie; bring us down financially. They may have bitten off more than they can chew, especially if we unload that anchor on our economy currently situated at 1600 Pa. Ave.


19 posted on 12/07/2011 12:26:05 PM PST by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: TigerLikesRooster

The China myth is bigger than the Japan myth ever was. The reason for it is so liberals can speak dreamily about the China “miracle”. Somebody’s roosts are coming home to chickens.


20 posted on 12/07/2011 12:31:44 PM PST by Da Bilge Troll (Defeatism is not a winning strategy!)
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To: RinaseaofDs
It has always been the case that China would rather shoulder the huge overhead of empire maintenance than take the economically viable path, forgoing unrealistic territorial ambition. It has turned into an ingrained tradition for two milenia. One China is their destiny, as far as China is concerned. However, there used to be a long period of time in which their empire broke up, and they first fought one another to near extinction and warring states persisted for centuries. When it is overwhelmingly untenable to maintain an empire, they relented with great reluctance.

We will see if this pattern repeats in the future or the cycle is broken for good. As it stands now, I see the breakup and long period of multiple 'Chinas,' not China.

21 posted on 12/07/2011 12:37:00 PM PST by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigerLikesRooster

Chinese workers get raises for allowing them to buy more products—thus, inflation. And what costs them more, costs you more: inflation in imports to our USA from other countries. So it takes more US dollars to buy the foreign stuff, and our dollar falls internationally.

The rest of the piece is propaganda that makes us feel so good about trade imbalances.


22 posted on 12/07/2011 12:37:41 PM PST by familyop (cbt. engr. (cbt), Army National Guard, '89-' 96)
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To: sten

Our manufacturing base is quite large still. In fact it is larger than China’s even now. One step further, China’s is really there to sell to the U.S. so there is a lot to think about. America has an excellent base to grow out of anything but this is assuming we can get the Marxist out of the White House first.


23 posted on 12/07/2011 12:38:03 PM PST by DebraAI
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To: TigerLikesRooster

The global security ramifications of such a thing cannot be understated, in my opinion.

There must be viable possibilities for extending western intelligence networks into disgruntled territories in order to soften the landing for the west if it does break apart.

There is a ghost city in Mongolia that is still under development and nobody lives there. You can’t keep supporting the military burden of garrisoning your territories, the cost of force projection, AND the ‘jobs’ programs necessary to keep the peasants out of the cities.

China is the most important and fascinating thing not being talked about right now. All eyes are on Europe, the inevitable.


24 posted on 12/07/2011 12:44:27 PM PST by RinaseaofDs (Does beheading qualify as 'breaking my back', in the Jeffersonian sense of the expression?)
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To: April Lexington

“I realy, realy hope this isn’t true...”

On the bright side such a collapse would shut up the Andy Sterns of the world who tout China as a model for the US. It would also weaken their military build-up and de-rail their global ambitions.


25 posted on 12/07/2011 12:50:42 PM PST by Hacklehead (Nearly all social problems in America have liberalism as their root cause.)
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To: pie_eater

“They need to find jobs for millions of them every year and now they can’t. The government is trying to prevent peasants from entering the cities looking for work. It is, in the long run, untenable.”

Not if you are willing to kill millions of people.


26 posted on 12/07/2011 12:53:10 PM PST by Hacklehead (Nearly all social problems in America have liberalism as their root cause.)
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To: Hacklehead

China has been in a construction frenzy and has new ghost cities which are essentially desserted.

even so, how will city dwellers learn to farm or eat?


27 posted on 12/07/2011 1:01:16 PM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: DebraAI; All
This article is pure media bs.

The U.S. is in debt and debt is growing by 4 billion per day. Is that manufacturing prosperity? Hell no. China is lending the U.S. trillions. The U.S. will collapse soon unless we bring back manufacturing jobs and that means banning imports from China and other countries.

What you say about the U.S. having more manufacturing than China is another media lie.

The U.S. has only 11 million workers in “manufacturing” as the gov defines it. In reality probably less. And those jobs are disappearing fast hence the U.S. decline.

This “base” will soon erode as most countries including China are ripping the U.S. off.

China has more than 100 million workers in manufacturing.

A company can pay a worker in China 1/20 what they pay an American worker. So that's unfair and so we have to ban almost all China products and those of other countries soon or we won't have any manufacturing nor any jobs left at all soon.

28 posted on 12/07/2011 1:05:31 PM PST by Democrat_media (China is destroying all our jobs and manufacturing ability. China makes everything.)
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To: longtermmemmory

“China has been in a construction frenzy and has new ghost cities which are essentially desserted. even so, how will city dwellers learn to farm or eat?”

If there are ghost cities its not because of a lack of people. If millions of peasants are moving to cities the problem would seem to be how they learn to work in factorys. Im not sure why the city dwellers would need to farm.


29 posted on 12/07/2011 1:07:57 PM PST by Hacklehead (Nearly all social problems in America have liberalism as their root cause.)
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To: TigerLikesRooster

RUGGED INDIVIDUALISM AND FREE MARKETS NEVER WORK

30 posted on 12/07/2011 1:26:43 PM PST by PhilDragoo (Hussein: Islamo-Commie from Kenya)
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To: GonzoGOP
Good news; that fact is so obvious that not even the idiots at the Fed will try.

Sounds like a good way to clear out the trillions in Treasury debt that we now owe them.

31 posted on 12/07/2011 1:59:18 PM PST by glorgau
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To: TigerLikesRooster

Well all know about Gordon Chang’s book 10 years ago about the coming collapse of China. Fast forward 10 years later, and so far, he is still wrong. So, I dunno, maybe the likes of Gordan Chang and the author of this article are correct, but they maybe off by 30-40 years. So, it might happen in 2050 or so, who knows. One thing I do know, Chang has been wrong for 10 years so far, and counting.


32 posted on 12/07/2011 4:22:41 PM PST by ponder life
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To: April Lexington
I realy, realy hope this isn’t true...

For the most part, it is true. There was a massive property bubble that is now bursting, in fact Beijing property prices are now down 20% already. Their bubble is proportionately bigger than ours, and will crash harder. Furthering the damage, during the top of any boom there is always a misallocation of capital that pursues more and more economically marginal investment.

Things that appeared to make sense during the boom will appear insane afterwards. China beats everyone by a mile in this regard, building whole unnecessary cities, spending 500 million on the opening ceremony of the Olympics, etc. They also over invested in the manufacturing and export sector, and as a result have extra industrial capacity just when everyone else, including their biggest trading partner Europe, is collapsing.

Also, their wages have been growing now, and factories are moving to other, lower wage countries.

33 posted on 12/07/2011 4:38:04 PM PST by Vince Ferrer
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To: TigerLikesRooster
As it stands now, I see the breakup and long period of multiple 'Chinas,' not China.

If it gets anywhere near that bad, we will start seeing riots and violence against Han in the outer territories, such as already has happened in the Muslim territories. If the Han start moving in to the center, that will be a signal China may crack up.

34 posted on 12/07/2011 4:42:21 PM PST by Vince Ferrer
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To: RinaseaofDs
China is the most important and fascinating thing not being talked about right now. All eyes are on Europe, the inevitable.

Good post. I would like to add that China's problems will remain systemic for over a generation. In many ways they have committed national suicide with their one child policy. All of this will happen in less than one generation. A good article can be found at Seeking Alpha.
35 posted on 12/07/2011 5:49:59 PM PST by PA Engineer (Time to beat the swords of government tyranny into the plowshares of freedom.)
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To: Vince Ferrer
They also over invested in the manufacturing and export sector, and as a result have extra industrial capacity just when everyone else, including their biggest trading partner Europe, is collapsing.

Some of that extra industrial capacity is in counterfeiting all kinds of goods, which they make a fortune on by ripping us off. For example, lots of fake silver and gold American coinage on eBay, cheap plating over bronze. We produce real goods, while they take the time to produce fakes ripping off the rest of the world.

36 posted on 12/07/2011 6:22:27 PM PST by roadcat
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To: PA Engineer

Let’s not forget the 40,000,000 Chinese men that have no date. Their policy has created an imbalance between men and women to the tune of 40,000,000 men.

40,000,000 completely disposable people from a military point of view.


37 posted on 12/07/2011 7:33:23 PM PST by RinaseaofDs (Does beheading qualify as 'breaking my back', in the Jeffersonian sense of the expression?)
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To: PA Engineer

Let’s not forget the 40,000,000 Chinese men that have no date. Their policy has created an imbalance between men and women to the tune of 40,000,000 men.

40,000,000 completely disposable people from a military point of view.


38 posted on 12/07/2011 7:59:58 PM PST by RinaseaofDs (Does beheading qualify as 'breaking my back', in the Jeffersonian sense of the expression?)
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To: RinaseaofDs
40,000,000 completely disposable people from a military point of view.

I have thought of that. I agree, however the demographic dynamics also play here. There is no safety net in China except the family. These men ultimately have to take care of an extended family. I think China's military window is very small. Just another dynamic.
39 posted on 12/07/2011 8:57:22 PM PST by PA Engineer (Time to beat the swords of government tyranny into the plowshares of freedom.)
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To: April Lexington
I realy, realy hope this isn’t true...

I really, really wish I knew how to spell...

40 posted on 12/13/2011 8:20:59 AM PST by April Lexington (Study the Constitution so you know what they are taking away!)
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