Peston reveals what has actually happened inside China since the economic collapse in the west in 2008. It is a story of spending and investment on a scale never seen before in human history - 30 new airports, 26,000 miles of motorways and a new skyscraper every five days have been built in China in the last five years. But, in a situation eerily reminiscent of what has happened in the west, the vast majority of it has been built on credit. This has now left the Chinese economy with huge debts and questions over whether much of the money can ever be paid back.
Link On BBC tonight..
The credit crunch to beat all credit crunches may be around the corner for China. They have financed the same amount in $trillions for building and investment in 5 years that took US banks a century to build up.
You just have to think the checks on bad customers for that vast amount of money has not been carried out with all due regard.
The Chinese have been managing the World's largest population base for thousands of years. Perhaps they learned something doing that. I also believe they took a good look at the Western World's "fiat currencies" before deciding to play the game. The Chinese suffer a huge surplus and hold trillions of dollars of foreign assets and I think they will leverage those assets to maximum financial advantage. It is the Western World, especially the USA, that is mired in nearly unmanageable debt.
The Chinese have been managing the World's largest population base for thousands of years. Perhaps they learned something doing that. I also believe they took a good look at the Western World's "fiat currencies" before deciding to play the game. The Chinese suffer a huge surplus and hold trillions of dollars of foreign assets and I think they will leverage those assets to maximum financial advantage. It is the Western World, especially the USA, that is mired in nearly unmanageable debt.
Even with an ancient culture and history - the sheer amount of credit debt they created since 2008 is astronomical. Nobody has tried to survive a crunch in that kind of credit-debt before.
The USA has rapidly eroding infrastructure it didn't even maintain nor now can afford to repair. The USA used to undertake huge infrastructure and development projects. Not anymore. Between the massive and multiple levels of government, military, social programs, social security, medicare/Medicaid and servicing the debt there is far less than zero left to advance anything. Rather, the only hope is to manage the decline to minimize suffering, while still telling ourselves we are king of the hill.The difference is China has something to show for its debt.
Worked for Japan. Also why to we insist on action as thought the debt and the credit crunch are directly related and not two distinct issues. It was private debt that caused the crisis
and the usa has a huge military that is throwing away money that the usa doesn't have.
China has cooked the books anyway. Their currency adjustment process is one big black box. I don't think they really care what happens because at the end of the day they have physical assets and we have nothing. Their fiat has built up their entire country from a rural backwater to a modern nation in 20 years, while ours is being used merely to maintain a stagnating polity.
In a nutshell, China is still benefiting from the old growth model because for them it's new and they have a lot of ground to cover. The USA and to a large extent the west is tapping out the old model. We'll be onto whatever's next while China is still living in 1960's consumer capitalism, looking up to Audrey Hepburn and Elvis Presley. (Seriously, they are on billboards everywhere there.) On the other hand, it's no secret that it'll be impossible for those 1.4 billion people to all rise to the middle class.
To be fair though, we would still be experiencing good growth if the globalists hadn't sold out our economy to Asian sweatshops, which our government was all too willing to let them do.
China Property Collapse Has Begun - Forbes
With thanks to Demon of Light for the link - maybe this will return the thread to a discussion of China and not America or American debt. :roll:
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