True people have been lambasting and predicting China's demise for decades on end now. What I can say is that the US will fall sooner than China at this point (and already half melted down), so it is better to watch our massive out of control spending spree than China's. After all, our government's absurd financials and the Federal Reserve that supports it is the gas that drives the Chinese export economy.
That said, the reason China has clamped down on borrowing is because the US is throwing too much gas on the fire and its encouraging inflationary fires. China's credit contraction is purposeful. I wish I could have said the same with the US. If it was done the way China is doing it then this ongoing mega recession we are in today would not have materialized in the size or duration it is today.
I like all the Chinese oil companies. As for China, the real issue is mainly inflation which cold be countered more effectively by raising the value of the RMB (the real root of the problem) and re-exporting it back to the source which is the USA.
As for China banks, they have a growing problem but none really worse than the US banks that are dependent on the government to bail them out of most all home loans via Fannie Mae and Freddie Mac and are still hemorrhaging from prior unbooked losses and hidden derivatives positions. If you want to talk about unrecognized liabilities with China why don't you talk about off book accounting in the US where the whole derivatives still remains hidden from view and growing ever bigger.
It is true China is still a developing country. Just seeing that it is still manufacturing based driven proves that. However, the US is increasingly a country on the decline with massive government wastage, a declining currency, overspending and over commitments to expensive military forays around the world, and according to PPP we overpay for most things.
Indeed GDP tracks money wealth but not standard of living. The US has been experiencing declining standards of living for the past decade with no recovery in sight. China on thee other hand is increasing their standard of living. It is true Chinese have a long way to go to catch up to the US in standards of living but another US recession could narrow the gap surprisingly fast. If China revalues their currency up 100% their $7k income becomes $14k and the if the US loses 50% of its value then it becomes a mere $23k. The gap is a lot smaller than you would think.
The US better shape up if it wants to stay on top. Letting Bernanke devalue your currency 5-10% a year is a very bad way to stay on top. Especially when economic growth is under 3% and you are running trillion dollar annual deficits. Pretty much you can't do much of a worse job economically than the US when it comes to running your economy.
Street One's Scott Freeze: Stocks Over Bonds in 2011 [View article]
The author is not going out on a limb much. Better than munis haha. Ummm, cash is better than munis nowadays. That is not saying anything. Even so, there is a big rotational shift out of bonds that will continue in 2011 now that inflation is apparent to everyone.
Brewing A Chinese Banking Collapse [View article]
That said, the reason China has clamped down on borrowing is because the US is throwing too much gas on the fire and its encouraging inflationary fires. China's credit contraction is purposeful. I wish I could have said the same with the US. If it was done the way China is doing it then this ongoing mega recession we are in today would not have materialized in the size or duration it is today.
Warily Watching China [View article]
As for China banks, they have a growing problem but none really worse than the US banks that are dependent on the government to bail them out of most all home loans via Fannie Mae and Freddie Mac and are still hemorrhaging from prior unbooked losses and hidden derivatives positions. If you want to talk about unrecognized liabilities with China why don't you talk about off book accounting in the US where the whole derivatives still remains hidden from view and growing ever bigger.
China: Still Far From No. 1 [View article]
Indeed GDP tracks money wealth but not standard of living. The US has been experiencing declining standards of living for the past decade with no recovery in sight. China on thee other hand is increasing their standard of living. It is true Chinese have a long way to go to catch up to the US in standards of living but another US recession could narrow the gap surprisingly fast. If China revalues their currency up 100% their $7k income becomes $14k and the if the US loses 50% of its value then it becomes a mere $23k. The gap is a lot smaller than you would think.
The US better shape up if it wants to stay on top. Letting Bernanke devalue your currency 5-10% a year is a very bad way to stay on top. Especially when economic growth is under 3% and you are running trillion dollar annual deficits. Pretty much you can't do much of a worse job economically than the US when it comes to running your economy.
Street One's Scott Freeze: Stocks Over Bonds in 2011 [View article]