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China Goes Into Overdrive
By now you have undoubtedly heard both that China's economy is now officially overheating and about to blow the NO2 canister, courtesy of another dramatic pick up in credit-driven "growth" and a unmitigated liquidity explosion, and that as a result its stock market has officially entered a bear market. Here are some additional thoughts on China's economy from Citigroup.
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Chinese... ashes to ashes, dust to dust. They aren't capable to join the capitalists of the west. They'll just self destruct.
Capable of joining us WHERE exactly? The dustbin of history?
Industrial societies will always win, and China is the king of all industrial societies on Earth at the moment. Most countries in the west have a one way ticket to socialist hell, with an adjoining flight to 3rd world status.
Within 3 years we will have seen the US, Euro, then Asia blowup. Amazing....
I just don't understand this mindset. Asia is the world's biggest creditor and possesses the world's most powerful industrial base. Why would they blow up? They might have a recession from all this money printing but remember that their printing of money is in direct proportion to their exports Their currency will STABILIZE when the rest of the world blows up (and thus can't afford any more of their products). Sure, bubbles may burst, but that only leads to serious trouble when both the government and the people are heavily indebted.
Not saying I think Asia will or will not blow up or denying the power that owning much of the world's factories etc gives them, but while they are the world's biggest creditor, one must consider the creditworthiness of those that Asia has chosen to extend their debts to. As I understand it, that's what the whole Euro crisis is about now - large credits were extended to those who aren't likely to be good for the money.
They blow up simply because the vast majority of purchases the buy what Asia produces, isn't in asia.
Which means when either U.S. or Euro, let alone both, tank, so does China. It is very possible they have a revolution, before us.
People don't understand that, but without people with money or umm borrowed credit from Capital One, no one else can buy the goods either, which means we are either at 10 percent capacity, or 10x over capacity. I believe we're at both. Not meeting the needs of no one, meanwhile, MONETARILY, the monetarists will say we have overcapacity. Yeah if the world is broke we'll have 99 percent overcapacity, with that being in China and other asia countries.
When this puppy goes, the whole world goes down...new dark age. Believe it.
And I was almost sure that building out 1950s technology on a massive scale was the sure way to become the next superpower. Skyscrapers and cars - real estate and automobiles - everywhere from Dubai to Shanghai thats what the economies revolve around.
Clean, non-carcinogenic water and food? - health care? Nah - as long as the Mc Mansions are there and a car - all is well.
It is a race to the bottom. Greece had lapped the field but China has come on late and the land of the dragon may overtake the PIIGs unless they learn to fly.
++ excellent use of space and a great summary. /bow/
You means Jim Chanos might be correct about China? Who woulda thunk? :>)
http://en.wikipedia.org/wiki/James_Chanos
http://www.youtube.com/watch?v=5D9DC0QhmGg&feature=channel
I just find it odd that while still growing and with the brake lights on the Chinese markets have both rolled over, taking the Aussies with them, while we here are seeing no growth, ex stimulus, soaring public debt, festering unemployment and weak top line revs (except AAPL) have a scalded chimp rocket market. Are Chinese savers escewing stocks for their own mega real estate bubble ?. Do we evenhave a market if it is fed fueled pbd buying with retail liquidating the ponzi for food ?. The invisible hand in now the clenched fist, smashing us all, long, short or in cash. We have killed 5000 Afghani or Iraquis for each of the 911 terrorists and 5000 of our own. The real terrorists sit in the fed. I wish them the same fate, after a trial, of course, Marla.
This is the next big story and posted that observation early this A.M.
http://bit.ly/1ax9Pw
I don't give a damn what Citi, or any Bank, has to say.
Run Banksters!!!! Run!!!
Eh?
I'm with you.
HUH?........what link was that.
There is a huge amount of trapped money in Asia. Dollars earned over the last 20 years - just piling up. Not going to go into US real estate. Most Asians live a relatively carefree life relative to taxes - have no desire to get caught in the US tax net . So nowhere for the money to go other than in driving up the price of local stacked shoebox style apts sitting next to slums, unbreathable air etc. You'll pay 2 to 3 time as much in Mumbai or Shanghai for a similar apt in San Fran. - if you are lucky.
So I think we get our hyperinflation in Asia. Its too late to fix now. Their bond markets are not deep and liquid - that would have been the only hope to avoid hyperinflation. The US is a model of probity and the Fed is conservative compared to Asia.
Wait wait wait. They have a lot of dollars, therefore they will have hyperinflation?
Hyperinflation is when people lose faith in the currency. I see no reason for anyone to doubt the strength of the Yuan ex the dollar tie. All they have to do is sell their dollars for yuan, and we get instant hyperinflation in dollars, a huge increase in purchasing power of Yuan, and suddenly those poor, poor factory "slaves" in Chengdu are making more than the average GS employee.
Its actually quite funny - if we get Dollar based hyperinflation in Asia ( most of the currencies are linked to the Dollar). The huge pile ( several Trillion) piled up over there is just swirling faster and faster - becoming worthless really . Will there be a push by the locals to say, even with all the tax headaches lets buy assets in the US? It will be too late - Iam sure plans are in place to impose entry taxes, exit taxes, restrictions on how much can be brought in etc. Those Trillions of Asian Dollars will be kept out and swirled around until there are all gone.
What's even funnier is that all that crap they sold us self-destructed five minutes after we unboxed it. We got what we paid for.
The things that make you go.....booom.
Which brings me to the Social Purpose of Wall Street. WS has basically enabled the import of a few Trillion Dollars worth of Asian goods ( with imbedded Asian Lobor) into the US over the past 20 years. Their social purpose is to make those dolars go away. So they would have essentially procured for the great unwashed american sheple - Trillions of dolars worth of shoes, clothes, furiture etc etc. That never will be repaid. That is the truth that cannot be mentioned in public - That is whay all the big bonuses etc are tolerated.
ah Primefool
The debt lasts forever, the Chinese shoes lasted.... Well, to be fair, sometimes you can get them out of the box and onto the shelves of Chinese Wallmart before they fall apart.
Think about it- it BIS "adjusts" consumer inflation to account for qualitative improvements- all entirely subjective. But they do not account for loss of quality, everything outsourced to China is inferior in every respect.
Therefore we are experiencing hyperinflation.
Of course when it all goes boom - you will no longer be able to buy your sweater at Wall mart for 4.99 on sale. You'l have to get granma to knit you one.
Who cares about $4.99 sweaters anyway? The things you own end up owning you, its all just polishing the brass on the Titanic, its all going down no matter what so I say lets evolve! I hate sweaters anyway, always wanted a nice buckskin shirt stitched with gut twine, and those are free!
"....always wanted a nice buckskin shirt stitched with gut twine, and those are free!"
Not beating you up, just introducing a different view here.
It's not free from the deer's perspective. Has it ever occurred to anyone that the financial elite and the powers that be may see us in the same way as this poster sees the deer? Free, expendable, replaceable, useful, self replicating etc.
Yes - in nature you will never see for instance, a leopard wearing a deerskin coat. Such vanity. Animals should only be killed for food. That is more natural.As for clothing better to wear pure cotton tunics made by a 12 year old in bangladesh.
I think this has occured to many people, actually. Especially Socialists and Communists have argued this for 160 years or so.
Indeed, if it is true that there is a close relation between Capitalism and social darwinism, then this behaviour of Capitalist towards everyone else is to be expected.
I guess I wasn't really talking about the ZH audience but rather the population at large. And even when a person does suspect or even know the real score, the level of self deception engaged in to allow themselves to continue to work, play, procreate etc under those conditions actual helps perpetuate the system.
we don't have "capitalism" -
we have government central planning, central banking, fiat money, bailouts, corporate lawmakers, criminal regulators, and a general climate of kleptocracy.
'darwinism' is being prevented and forestalled at every turn.
MC,
How right you are..........for a different reason.
People who do not believe in Conspiracies, kill me.
A Conspiracy can simply be two people making an agreement for a common cause.
What we have here, is a PLANNED destruction of the entire world political, monetary system.
Europa, has Socialism,Socialistic Democracies..............their Going to Hell.
Why are WE, Hell bent on dismantling Capitalism, a Constitutional Republic, and at light speed, trying to emulate/become just like the failing,destroyed,bound to fail systems that are melting down, as we watch?.
I think we all know the answer to that, and the end goal is not Socialism.
If China had a brain, they would spend all those FRN's on US Land, properties, NOW...............
Why should they get screwed because we are being herded into Fascism?.
And do not think Europe will not be just like us............THE END GAME.
You have state capitalism which you get when capitalist own the government. State capitalism is a early form of fascism.
Good luck.
yah!
darn tootin!
Dude, please cut down on your coffee intake and keep a defibrillator nearby.
did anyone hear anything about that IMF meeting today?
Did you say "MEET" ? We were discussing "MEAT"
Yo, there are plenty of Chinese running cash into Brooklyn. All-cash acquisitions. They're taking over downtown at the same time as private equity thugs are kicking them out of Chinatown.
Mainland China is pretty retarded, yeah, but you never, ever want to fuck with a real Chinese businessman. Bwahahaha. White dude real estate people have nothing on these guys.
Put a Chinaman and an American on a desert Island each with one can of beans, one pack of matches, one broken tennis racket and a half bag of beef jerky.
Who do you think will manage to survive?
Hmm - OK I'll play. Chinaman. He ties up the Americans hands behind his back - with the beef jerky. Sets fire to the tennis racket using the matches, warms the can of beans by the fire and enjoys .
No no no. How stupid of me . The American - of course! He uses the matches to write out an IOU to the Chinaman promising him 100 cans of beans. Takes the tennis racket, matches, beans and jerky in exchange - as collateral. Eats the jerky. saves the rest to use for the next deal.
Continuing - The American then fixes up the tennis racket - teaches the natives how to play tennis, mates with the best looking native. When the Chinaman shows up to claim his 100 cans of beans - turns the natives on the Chinaman. Rules as a beloved King and supreme ruler of all the lands.
If we do a series, you deserve to be the MC!
primefool has not only been watching closely but has been taking notes. All hail the new king of the greater fools.
By the way, NO2 is nitric oxide, a toxic, corrosive substance found as air pollution and an intermediate step in making nitric acid. I think you were intending to refer to N2O, nitrous oxide, the stuff that makes cars go silly fast and makes people just plain silly.
http://en.wikipedia.org/wiki/Nitrogen_dioxide
Welcome to the 21st century:
http://www.bloomberg.com/apps/news?pid=20601109&sid=ad9H.w7xD3MU&pos=13
Enjoy it while it lasts.
Citi....? Now we're listening to what citi has to say?
What I want to know is when Chanos is finally going to unleash all those short positions he has on China...b/c while I think he's overstating the case a bit, the fundies are hideous--we talk about overleveraged positions constantly, but China's an overleveraged society--to the tune of 900,000,000: 50,000,000 (or 18:1, phbt)
India's in the same sort of boat, but ironically their massive bureaucratic bloat has actually helped in this instance since the sort of speculation and housing bubbles simply are not possible on the same scale b/c the Indian middle class is not quite strong enough yet (give it 5-10 more years). This is not to say they're in the clear--far from it, as they could get embroiled in a world of pain were the tensions with Pakistan to boil over yet again.
Does anyone here see a way that all this nonsense doesn't lead us into open warfare? I feel like such a Debbie Downer, but it's all headed in the same direction.