Author Topic: China: Gazing Into the Abyss?  (Read 9887 times)

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Offline bullet308

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China: Gazing Into the Abyss?
« on: June 06, 2012, 10:00:17 am »
In another life, I used to teach US History to 16 year old high school students. When teaching about the stock market crashes of 1929, 1997, 2000, etc, I only gave my students one specific piece of advice on investing: If you ever hear anybody describing a market as being on a permanent upswing, or being somehow different and thus immune to fundamental market forces, or that something constitutes a paradigm shift in how markets work and that THIS market is entirely different from all others, its time to RUN for the exit, because that means the idiots and opportunists have taken to the field en masse and that bad things are afoot.

I see no reason this cannot be applied to the entire economies of nation-states.

Ladies and gentilmen, I present the Peoples Republic of China.

http://business.time.com/2012/02/27/why-china-will-have-an-economic-crisis/
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Online BravoV

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Re: China: Gazing Into the Abyss?
« Reply #1 on: June 06, 2012, 10:23:37 am »
Of course they will, but the question is when ? and how resilience are they ? What happened to Japan just can not be applied there, they're just different.

Also remember, this is not a democratic country, of course human right dept hates them, but with strict and strong centralized gov control, apart from the disadvantages, this condition it self has a lot of advantages compared to a fully democratic country when crisis is coming or about to come.

At certain points especially during the crisis, somehow I believe even leaders from democratic countries are jealous with this kind of absolute power that China gov capable of, like abilities to handle certain bad situations "easily". ;)

I guess we'll have to wait and see how this interesting event will roll up in the future.
« Last Edit: June 06, 2012, 10:25:43 am by BravoV »
 

Offline bullet308

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Re: China: Gazing Into the Abyss?
« Reply #2 on: June 06, 2012, 11:52:34 am »
I suspect it will be one of those things that they keep a lid on until they can't anymore, and then things will go very, very badly indeed. The market will only be denied for so long without something else in the economy coming unhinged even worse than whatever scenario you were trying to avoid in the first place. What I see here is perhaps best termed as the enbrittlement of the Chinese economy. When it comes time to pull the monetary and fiscal levers to head off imminent disaster, they will find that all the levers have already been pulled in an effort to keep all the plates spinning and that nothing is left.  And down it all comes.
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Offline Architect_1077

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Re: China: Gazing Into the Abyss?
« Reply #3 on: June 06, 2012, 02:25:19 pm »
Dictatorship or not, you can't bend the rules of math. Math is math.
 

Online BravoV

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Re: China: Gazing Into the Abyss?
« Reply #4 on: June 06, 2012, 02:37:02 pm »
Dictatorship or not, you can't bend the rules of math. Math is math.
Agree, but unfortunately economy is not pure math, only "minor" part of it.

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Re: China: Gazing Into the Abyss?
« Reply #5 on: June 06, 2012, 02:48:23 pm »
Dictatorship or not, you can't bend the rules of math. Math is math.
Agree, but unfortunately economy is not pure math, only "minor" part of it.
count politics, speculative and probabilistic in. and the latest study... also count psychology and biology.
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Offline G7PSK

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Re: China: Gazing Into the Abyss?
« Reply #6 on: June 06, 2012, 02:59:33 pm »
They will go the same as Russia in the end selling cheap to the rest of the world only gets you so far, then the money and luck runs out.
 

Online BravoV

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Re: China: Gazing Into the Abyss?
« Reply #7 on: June 06, 2012, 03:29:44 pm »
They will go the same as Russia in the end selling cheap to the rest of the world only gets you so far, then the money and luck runs out.

I think economy model of China is not even close to former Soviet Union that went bankrupt because of low productivity & export, but heavily involved in arm race and drained them dry, c'mon, you know better than this.

Wait, are you aware that US has quite big debt to China ? Heck, even US military armaments are currently using tons of tons electronic components that are made in China ;) funny isn't it ? and I'm damn sure that former Soviet Union never had this kinda chance in the past.

Expecting (and some how keep dreaming) that US and it's puppies will grab back the world order and domination like the good old day is just plain too naive & childish.

Face the reality, the world is changing, towards what end say 50 years ahead ? Nobody knows, but for sure this time with this China's phenomenon lately in world economy, its just "feels" different and its never happened before nor any minor resemblance of it in history of man kind.

How about similarity with Japan or Korea model ? Naahh.. these two are US's smaller puppies too, totally different like night and day from current US vs China relationship,  and also with China's sheer size, geopolitical differences and resources, you just can't compare them.

Fyi, I'm not China lover either, infact they've killed lots of our local industries here, its just you have to see thing realistically rather than see thing that you're expecting to see.

My 2 cents
« Last Edit: June 06, 2012, 03:40:04 pm by BravoV »
 

Offline G7PSK

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Re: China: Gazing Into the Abyss?
« Reply #8 on: June 06, 2012, 05:22:53 pm »
The money that runs out is not necessarily the Chinese money it is that of the countries importing those "Cheap Goods" every time you import cheap goods you export expensive money/wealth. When no one can afford to buy where do you sell. Empires rise and empires fall and these days it happens faster and faster.
 

Offline tinhead

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Re: China: Gazing Into the Abyss?
« Reply #9 on: June 06, 2012, 05:57:50 pm »
The money that runs out is not necessarily the Chinese money it is that of the countries importing those "Cheap Goods" every time you import cheap goods you export expensive money/wealth. When no one can afford to buy where do you sell.

western civilization is complettly (* check below) dependant on cheap sources, this can be china, ME, Africa .. it does not matter.
The point is, you can't just move the whole production within 2 years - and this is exactly what the author said.
Sure, as US banker/rating agency idiots (** check below) you can today manipulate some markets, but luckily not all.
But still, even with manipulations the dependency on cheap sources is such big that you have to be very carefull what
you doing (when you don't want to "blow away" your country as well).

Since few years investors are moving more and more money to ME (oh well, India belongs to ME somehow too) and Africa,
Asia is for sure still good market but not the cheapest source.
The problem is however that since too many local jobs got lost politicians are making some presure on
money-market - not that they really care but the point is they involved as well in money-making machinery.

(*) - China is making only 11% of world export volume, US 8.4 and Germany 8.3%. However these numbers are little bit wrong,
many US/Germans companies have manufacturing locations in China, that what they producing is counted as company
export and not Chinese export.

(**) - my nephew is working for one of the good known rating agency in N.Y., this is a pain in the ass for me as entrepreneur.

Empires rise and empires fall and these days it happens faster and faster.

no doubt, the history is the best proove. The only question is WHEN, the answer ease - as soon western civilization
found/moved over to another cheap source and/or china not cheap anymore and/or the whole corrupt world collapsed.
« Last Edit: June 06, 2012, 06:25:33 pm by tinhead »
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Offline XynxNet

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Re: China: Gazing Into the Abyss?
« Reply #10 on: June 06, 2012, 07:24:58 pm »
As long as we all buy into the dollar-fraud-sheme, there is no risk for china. And even afterwards...
They now  produce most of our goods and have the industries most western countries lost. Real wealth is generated in the producing industries. If the dollar sheme fails china can target its own people. A billion people is quite a market and with india a second billion people market is just in the neighborhood and both markets aren't as saturated as the western countries..
 

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Re: China: Gazing Into the Abyss?
« Reply #11 on: June 06, 2012, 11:20:39 pm »
I fully expect the US to have a major economic crisis before China does.
But China is inevitable in some way too.

Dave.
 

Offline gregariz

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Re: China: Gazing Into the Abyss?
« Reply #12 on: June 06, 2012, 11:47:33 pm »
I fully expect the US to have a major economic crisis before China does.
But China is inevitable in some way too.

Dave.

I think we are already in one. I see the present crisis as the failure of 30 years of economic theory promoting the service economy. Remember all those ideas that if we let manufacturing go to china we'll all get better jobs programming the computers? Didn't quite happen. More like most new jobs in the US are flipping burgers, there's service sector growth for you.
 

Offline nanofrog

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Re: China: Gazing Into the Abyss?
« Reply #13 on: June 07, 2012, 02:58:34 am »
I think we are already in one. I see the present crisis as the failure of 30 years of economic theory promoting the service economy. Remember all those ideas that if we let manufacturing go to china we'll all get better jobs programming the computers? Didn't quite happen. More like most new jobs in the US are flipping burgers, there's service sector growth for you.
This is how I see it as well.
 

Online Mechatrommer

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Re: China: Gazing Into the Abyss?
« Reply #14 on: June 07, 2012, 05:35:42 am »
China: redefining industries. Go China!
http://www.eetimes.com/electronics-news/4374709/Four-reasons-why-the-CE-chip-game-is-?cid=NL_EETimesDaily
my sense... the balancing force will be... quality vs quantity. so hopefully this will not be the end for everyone.
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Offline Galenbo

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Re: China: Gazing Into the Abyss?
« Reply #15 on: June 07, 2012, 07:33:18 am »
I still have problems with the focus on the word "crisis"
Of course there is a definition for it (or multiple definitions)

But what part of China, will fall into what kind of crisis?
Is it per-definition bad for all the people in that part of the country?

Don't forget there are still huge regions where they don't wear underwear.
They have food if it rains enough. That's it.

Personally, I was vééry happy with the 2008 crisis, with its instantly half-priced heating Fuel.
Saved me 1500 euro. In the mean time Fuel is again on the same level as before.
Can't wait till the next Dip, preferable before October.

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Offline bullet308

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Re: China: Gazing Into the Abyss?
« Reply #16 on: June 07, 2012, 09:12:44 am »
Oh, the US and the rest of the west will have problems, HAVE serious problems. My point is that the Chinese seem to think that they are either immune to the same forces or think they can will themselves into dodging the effects of same. I have serious doubts about their ability to do that. Western economies tend to suffer mightily when transparency goes away, as with the subprime lending fiasco in the US that kicked off the festivities in 2008. Somebody figured out the neatest trick in capitalisim, a way to separate risk from reward. Entities loaned money to people to buy houses that they knew good and well that couldn't repay them, but they didn't care because they would simply bundle up all these loans and sell them as a package to big banks and the like. Good loans and bad were ground up and mixed together in a way to where they were inseparable, like grinding up bad meat and mixing it with the good. That made  the whole hamburger bad, or at least questionable. Once the big financial institutions that bought these hamburgers realized what they had bought was compromised, there was a crisis in confidence and the banking system froze up because nobody could properly evaluate value and risk anymore, and here we are. All for a lack of transparency.

Bad enough for us, but the Chinese seem to  think that NO transparency is a good thing, to where really nobody knows the proper value of and risk companying ANYTHING. If the Chinese weren't human and thus susceptible to such human shortcomings as greed and selfishness, they might be able to make this work over the long haul, but we have growing evidence (as if we need it) that they are indeed as human as everybody else. Endemic corruption at the regional and municipal levels, massive overbuilding of entire cities with nobody to live in them, complete with speculators leaping in to snatch them up with hopes of a quick profit using borrowed money, a banking system that is corrupt and antiquated in its practices, a government that churns out economic data that nobody particularly believes but nobody particularly cares about as long as the arrow points up...for now...on and on and...

I suspect the whole thing ts going to fail, and I suspect fail MASSIVELY, with little warning, and whatever the vaunted Mandarins of Beijing do to stop it will probably make it worse.  Such are the wages of thinking the rules and history do not apply to ME.

So, enjoy your cheap circuit boards and counterfeit caps...for now.
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Re: China: Gazing Into the Abyss?
« Reply #17 on: June 07, 2012, 10:00:33 am »
I suspect the whole thing ts going to fail, and I suspect fail MASSIVELY, with little warning



Dave.
 

Offline djsb

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Re: China: Gazing Into the Abyss?
« Reply #18 on: June 07, 2012, 11:36:58 am »
I hope you don't mind me posting these links. I'm a subscriber to this UK magazine so I value it's analysis and opinions.
I hope you all find the links interesting :)

http://www.moneyweek.com/news-and-charts/economics/asia/money-morning-china-slowing-economy-22200

http://www.moneyweek.com/blog/17-reasons-why-china-is-heading-for-a-hard-landing-22300

David

« Last Edit: June 07, 2012, 11:42:44 am by djsb »
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Offline bullet308

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Re: China: Gazing Into the Abyss?
« Reply #19 on: June 07, 2012, 12:42:46 pm »
Nothing wrong with UK news sources. I get a lot of my info from The Economist.

Part of me likes the idea of "rebooting" the system as well.  The problem is that such a reset is never quite complete. You can make the information disappear, but you cant erase their power on the smaller scale. Having thought about it a bit, I figure the most likely result of such a reboot would be a period of intense local and regional conflict as the the power structure resorts itself into a new form...which, owing to human nature, would end up looking remarkably like things are now over the medium term...or, more like local and regional warlords...
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Offline Galenbo

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Re: China: Gazing Into the Abyss?
« Reply #20 on: July 19, 2012, 05:54:54 am »
When China fails, and goes bust economicaly, they will go to war.. that is a recipt that non democratic nations usen when the shit hits the fan..

Right, and also the "democratic" named nations will do so.

What country against what is not known yet. Or region/region, or community agains community.
Or very likely, a Civil war, originals agains muslim immigrants against jews against fags against government against ...
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Offline DrGeoff

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Re: China: Gazing Into the Abyss?
« Reply #21 on: July 19, 2012, 06:33:47 am »
Wars are very expensive, and you don't get good value for your money.
Unless you are in the business of making war-toys.
Was it really supposed to do that?
 

Online Mechatrommer

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Re: China: Gazing Into the Abyss?
« Reply #22 on: July 19, 2012, 06:39:37 am »
Wars are very expensive, and you don't get good value for your money.
but "human like to doing that". anybody can say anything any reason/unreason they want. i'll stand by that statement.
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Offline A Hellene

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Re: China: Gazing Into the Abyss?
« Reply #23 on: July 19, 2012, 11:08:41 am »
Quote
Wars are very expensive, and you don't get good value for your money.
Unless you are in the business of making war-toys lending money with interest (loansharking/usury) to BOTH the opponents and you get them to fight each other (by using corrupt politicians) --which is exactly what the privately owned Central Banks (meaning, ALL the Central Banks) have been doing for centuries. You also condition the people by creating sentimental movies (references: 1a, 1b), revealing to them how virtuous and honourable is to be dying or getting mutilated for a piece of tin, or how noble is the profession of the informer/snitcher/squealer/fink/spy/betrayer/mercenary (killing for a living)/etc., in order to make people (at least, the less perceptive ones, which is the vast majority) to happily do the job for you; preferably, while they are still young.
There, I fixed it for you!


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« Last Edit: July 19, 2012, 11:24:14 am by A Hellene »
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Offline amvakar

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Re: China: Gazing Into the Abyss?
« Reply #24 on: July 19, 2012, 02:23:33 pm »
Oh, the US and the rest of the west will have problems, HAVE serious problems. My point is that the Chinese seem to think that they are either immune to the same forces or think they can will themselves into dodging the effects of same. I have serious doubts about their ability to do that. Western economies tend to suffer mightily when transparency goes away, as with the subprime lending fiasco in the US that kicked off the festivities in 2008. Somebody figured out the neatest trick in capitalisim, a way to separate risk from reward. Entities loaned money to people to buy houses that they knew good and well that couldn't repay them, but they didn't care because they would simply bundle up all these loans and sell them as a package to big banks and the like. Good loans and bad were ground up and mixed together in a way to where they were inseparable, like grinding up bad meat and mixing it with the good. That made  the whole hamburger bad, or at least questionable. Once the big financial institutions that bought these hamburgers realized what they had bought was compromised, there was a crisis in confidence and the banking system froze up because nobody could properly evaluate value and risk anymore, and here we are. All for a lack of transparency.

Bad enough for us, but the Chinese seem to  think that NO transparency is a good thing, to where really nobody knows the proper value of and risk companying ANYTHING. If the Chinese weren't human and thus susceptible to such human shortcomings as greed and selfishness, they might be able to make this work over the long haul, but we have growing evidence (as if we need it) that they are indeed as human as everybody else. Endemic corruption at the regional and municipal levels, massive overbuilding of entire cities with nobody to live in them, complete with speculators leaping in to snatch them up with hopes of a quick profit using borrowed money, a banking system that is corrupt and antiquated in its practices, a government that churns out economic data that nobody particularly believes but nobody particularly cares about as long as the arrow points up...for now...on and on and...

I suspect the whole thing ts going to fail, and I suspect fail MASSIVELY, with little warning, and whatever the vaunted Mandarins of Beijing do to stop it will probably make it worse.  Such are the wages of thinking the rules and history do not apply to ME.

So, enjoy your cheap circuit boards and counterfeit caps...for now.

I'd say there will be plenty of warning. China's assent did not occur in a vacuum; consumers and corporations elsewhere decided that they would shave costs wherever possible by handing over industrial capacity whenever possible. No matter what happens inside, they'll be propped up as long as everyone else can afford to import cheap crap. The domestic economy's true strength and the character of the Chinese citizen will become significant when the US completes its transformation into a nation of self-important paper-pushers and burger-flippers that nobody else truly needs.
 


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