More Signs China Is Going Bust (Market Oracle)

[johnd83]

China have been riding their own unsustainable bubble that is even more reckless than the here in the USA. In fact it appears that a lot of Chinese exporters have been selling products below cost for some time by taking out loans but operating at a loss. The fact that China is teetering on its own economic collapse has not made it into the MSM. Here are a few interesting links from today. I don't know how reliable the specific sources are, but the general theme seems to be pretty consistent.

http://www.marketoracle.co.uk/Article30702.html

http://au.smallbusiness.yahoo.com/finance/cash-flow/a/-/10376332/chinas-secret-credit-crisis/

http://www.theepochtimes.com/n2/china-news/chinas-real-estate-market-running-out-of-steam-62255.html

http://www.counterpunch.org/2011/09/30/cracked-china/



There is the saying that China will "grow" into its excessive housing that is empty right now, but this is somewhat of a strange concept. Buildings that are left empty decay, and buildings are actually quite expensive to maintain properly. While the China bubble bursting will hurt us in the short term, I think that it will actually help by lowering commodity prices like metals and oil back to a reasonable level, and the Chinese exporters will no longer be able to dump products below cost in the USA like they have been over the last few years. I suppose that corporations will look for another country for low cost labor but I doubt there is anywhere else quite like China to exploit.

[ixion]

1. Good. Let's help them out by making things here again.

That's a win-win for us.

[RUMMYisFROSTED]

2. Good time for us to say "Blow our credit out your ass!"

:woohoo:

:patriot:

[Ichingcarpenter]

3. I read that too plus growing dissatisfaction

and growing organized crime.

Seems like the other economic engine in the world is faltering.
Not good for the status quo and could have serious repercussions.



I think the world is in for a rough ride.

DON'T PANIC......LOL

[johnd83]

4. This actually may be a good thing for the USA

China has so badly distorted the world economy that the US economy can't get any traction. High commodity prices and finished goods that cost less than raw materials is completely insane. China's ability to keep doing this is breaking down. Actually, the Chinese are not doing us any favors buying our national debt. It is just a way to force us to buy more exports from China and depress their currency so stuff is excessively low cost.

[Ichingcarpenter]

9. I think the idea is for the US wage workers

to work more, for less wages, benefits, longer hours and less security.
I don't think that international american corporations care except for
'THE BOTTOM LINE' and the worker is not on it.

This is really a crisis of world capitalism.

[Akoto]

5. I'm no economist, but ...

From my layman's perspective, it seems like they went too far, too quickly. I'm only 26, and I don't recall China being this way in my youth. They had some gains, and suddenly they're exploding with growth both inside and out. Unfortunately, it seems (again, to a layman) like all of that growth came at the expense of careful planning for the future.

[OHdem10]

6. They are already making noises at India.

Oh MY, and it was no more than a Month ago we were being
told--China is cleaning our clock. China is on its way to
being the next world power.

I retorted then and I maintain--No country goes on straight
trajectory upward to the top. There are hills and valleys.

When are the so so called Smart People going to get
things right.

[johnd83]

8. Neocon garbage

We were never at risk of China overtaking us in real quality of life terms. I doubt India is going to put up with the same garbage. Their society is structured differently. I don't think it is a matter of "smart" people getting things right. It is a matter of corruption and greed that is the global problem.

[OHdem10]

7. I am going to be most most cynical. Perhaps this is why the

Republicans have been on such a tear to destroy union
and lower wages. Msy if we can make our labor cheap
enough the Companies will come home if things blow up
in China.

Oh for the Right To Work Country.

[Yavin4]

10. This Decade Will See Series After Series of Global Default

This is what happens when "leaders" put massive profits ahead of common sense.

In sum, it's not natural for there to be so many billionaires in the world.

[ThomWV]

11. If China were to go broke they would demand payment of our debt to them. Hmmmmmm.

And so they would begin to sell our debt on the open market for what it would bring, and the less it brought the higher interest rates would rise. And I don't mean over some imaginary long-term. I'm talking overnight. This in turn would choke off finance of new industry. So that would put us in the interesting situation where replacement of all that Made in China junk would have to come from domestic sources. With interest rates too high to allow small businesses to start up what you would see is further expansion of cash rich industrial titans into what little if left of American manufacturing.

In the end the rich get everything. Don't you doubt it.

[johnd83]

12. China will never sell our debt

Selling off the US debt would cause their currency to appreciate an astonishing amount and their exports would be very expensive. It would also play havoc with their internal economy. This happened to Japan in the late 80s and Japanese products are still very expensive because of their strong currency.

I have no doubt that the rich will continue to accumulate wealth. The Reagonomics capitalist philosophy is obviously not working but any attempt to tweak the rules to be more stable for the 99% are squashed immediately.

[jwirr]

13. Yes, I think their fall in going to happen because as the article states

it is not sustainable any more than ours is and when it does happen it is going to be as dangerous to the world economy as the Greek default will be to the EU. And as it stands now I think the rich will take all but that could well be their downfall. The peaceful revolution is already happening - a disaster like that could easily turn peace into violence.

I hope not but I think it could happen.

[johnd83]

15. Theoretically the US government is designed to allow for peaceful revolution

through elections. That process is being broken down by the corporations and the super rich and that does really worry me.

[jwirr]

17. Yes, because it corners people so that the only answer is desperate

action.

[johnd83]

14. Found another interesting link

http://online.wsj.com/article/SB10001424052748704764404575286060469264510.html

[L0oniX]

16. When our jobs move there then we dont have money to buy their shit ...go figure!

[1776Forever]

18. Can you imagine one billion people in a recession tripping over themselves for crumbs? Scary! n/t

[pnwest]

19. excellent articles, thx for the links. nt