Skip to comments.Forget Greece, China Biggest Risk to Global Economy: Faber
Posted on 05/19/2012 3:40:00 AM PDT by TigerLikesRooster
Forget Greece, China Biggest Risk to Global Economy: Faber
Published: Friday, 18 May 2012 | 6:16 AM ET
By: Jean Chua
Writer for CNBC.com
Forget Greece, which is an "insignificant" economy, it is China that poses the biggest risk to the global economy, Marc Faber the editor and publisher of the Gloom, Boom and Doom report told CNBC on Friday.
"I think the biggest risk is actually China because if you look at Greece, it's an insignificant economy," Faber said on CNBC Asia's Capital Connection. "Yes, they owe money, but the market knows that it's bankrupt."
The European Central Bank will be able to support Greece and European taxpayers would pay for it, he added. On the other hand, a slowdown in China, the world's second-largest economy, would have a huge impact on prices of industrial commodities, Faber said.
(Excerpt) Read more at cnbc.com ...
Deflation is already here, save for the impoverished sots who see “food” as a bigger expense than “homes.”
...and the danger to the world economy is the marriage of vast debt and regulations, both of which slow prosperity.
Since we export hardly anything TO China, how would a slow down there have much of an effect on our economy? Its not like their market is vitally important. Their cheap crap will still come and fill Waltonsons China Mart shelves, day in and day out. If they stop buying T-Bills Timmy will just print more and “sell” them to the Federal reserve with phony money, QE754.
We have fall guys ready in case money lords run out of options. Wild card is China and N. Korea. These two countries are competing with Israel for the fall guy spot. I won't be surprised if Kim Jong-eun would volunteer for the role.
People will afford less and less of cheap stuffs. China may have no real serious competition but people have less and less money. Demand goes down even for cheap stuffs.
Commodities have been subject to rampant speculation, completely unmoored from the economic realities on the ground. An unraveling of this unhealthy trend in place since 2008 would not necessarily be a bad thing.
Deflationary? Yes. It would, however, help offset the supply shock and inflationary effects of the loss of low cost consumer goods from China.
Think of the bout of inflation triggered by another memorable supply shock, that of the Arab oil embargo in the seventies.
Being forced into onshoring to replace supply would be beneficial regarding unemployment.
Call me Pollyannish, but I don’t see it as an entirely bad thing.
The wild card would be the likely increase in traditional Chinese xenophobia and the war fears tha would come with that.
The rest of the article is barely newsworthy - THAT is the salient point made here & I doubt the author even realizes it!
There is some bubble here with the Chinese. Hard to say where it ends, or how it would start the final weeks.
And remember China tried Keynesian Stimulus too, and they had a surplus to start with;
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
” .and the danger to the world economy is the marriage of vast debt and regulations, “