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Old 03-12-2013, 12:32 PM
 
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Quote:
Originally Posted by GiantRutgersfan View Post
Fastest-Growing Cities On The Planet - Business Insider


Look at the link. Many cities in china have had 5x population growth in the last 20 years. When you are rapidly growing like that, deficits matter much less.

There is no reason why we cant maintain sound infrastructure and run a balanced budget in the USA
And why is that?
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Old 03-12-2013, 12:33 PM
 
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Originally Posted by stoutboy View Post
I keep telling people that its economy is the LAST thing China needs to be worried about. The fact that the country is an ecological basket case is of vastly more concern.
Thats the economy under externalities.
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Old 03-12-2013, 12:35 PM
 
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Originally Posted by Bettafish View Post
In China all cities have grown rapidly.

My hometown has grown from 300,000 in 1994 to over 1 millioin now. It is just a "small" city nobody knows.
You can now find KFC, McDonald's, and Walmart there! Last time I went to the McDonald's restaurant in downtown I saw a black man order in Chinese.

Sounds like the US in the 20s and Japan in the 80s. Creditor nations never need concern themselves, clearly.
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Old 03-12-2013, 12:44 PM
 
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Originally Posted by gwynedd1 View Post
China to Raise Budget Deficit by 50 Percent to Boost Demand - Businessweek

As I predicted, China is steering for domestic consumption. Its good to finally see that there are real Americans somewhere , even if its in Asia.


Henry Ford's $5-a-Day Revolution - Press Release


They had no choice. The housing bubble is ticking away there.
They are in for a titanic economic collapse the likes of which the world has never seen.
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Old 03-12-2013, 12:58 PM
 
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Originally Posted by cpg35223 View Post
They are in for a titanic economic collapse the likes of which the world has never seen.

Not necessarily , but if they screw up their fiscal and monetary policy like such fine creditor countries in the past, it is certainly possible. In economics you have to make it all the way across the shark tank.
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Old 03-12-2013, 01:11 PM
 
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Originally Posted by gwynedd1 View Post
Not necessarily , but if they screw up their fiscal and monetary policy like such fine creditor countries in the past, it is certainly possible. In economics you have to make it all the way across the shark tank.
Here's my reasoning. Right now, at this very moment in history, China has the highest working-age population that it ever will. The demographics are such that, beginning around 2015, the working-age population begins a precipitous decline. Yet there is a enormous oversupply in housing. Not only that, but the price/income ratio sits at around 30-1. Now, to put things in perspective, Japan at the top of its property bubble had a price/income ratio of around 16-1, and the United States at the height of its property bubble had a price/income ratio of 5-1. However, the United States has the demographics to absorb its overbuilt real estate. In fact, it is well on the way to doing so. The same expectation simply is not in place for China, which means trillions upon trillions in real estate investments will have to be written off.
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Old 03-12-2013, 01:20 PM
 
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Quote:
Originally Posted by gwynedd1 View Post
China to Raise Budget Deficit by 50 Percent to Boost Demand - Businessweek

As I predicted, China is steering for domestic consumption. Its good to finally see that there are real Americans somewhere , even if its in Asia.


Henry Ford's $5-a-Day Revolution - Press Release


They had no choice. The housing bubble is ticking away there.
The fact is really that like Japan the deficit spending is based on savings which are high in both countries. They basically owe themsleves in this spending. They also have enough left over from the high rates of savings to be the first and second foreign owners of US debt. Deficits oweed to yourself are much different than debt payments that go out of the country. One reason japan has started to change is that this savings is getting to be close to not enough and at 200% plus deficit to GDP that will change everything when borrowig from outside sources. its much like SS where the government is only one who can borrow the money at rates they set but of course we don't have foreign treasuries invested in. Much of our debt is the retirement money of those two countries which as popualtion ages will be drawn on.So its based on owing themselves at rates they set and they still have foreign investment owed them like US treasuries.
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Old 03-12-2013, 01:39 PM
 
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Originally Posted by texdav View Post
The fact is really that like Japan the deficit spending is based on savnigs which are high in both countries.

We clearly use different money models. I use the post Bretton Woods, soft money model of government debt which is not convertible to any market instrument. Therefore sovereign debt = money. Now if you can convince me why Japanese need to buy intrest bearing bond rather than just printing money we can proceed. Otherwise to me its like comparing sail boats and nuclear submarines.


Its a chartalist system. You never pay off the debt in such a system. If you don't assume that model then half of what I post will be completely incomprehensible.

Metallism vs Chartalism

I have asked for some time for someone to convince me why I should use a metallist market driven money system when we have nothing of the kind. This is especially troubling to me because I know there are no inherent limits which means there is only a political limit which will be arbitrarily and oppressively opposed, kinda like now.



Quote:
They basic owe themsleves inthis spending. They also have enough left over from the high rates of savings to be the first and second foreign owners of US debt. Deficits owede to yourself are much different than debt payments that go otu fo teh country. One raso japan has started to chnage is that this savings is gettig to be close to not enough and at 200% plus deficit to GDP that will change everyhting. its much like SS where the governamnt is only one who can borwwo the money at rates they set but of course we don't have foregn treasuries invested in. Much of our debt is the retirement money of those two countries which as popualtion ages will be drawn on.

Rather than making up our own versions may we agree to use this standard on the description of the perils of a reserve currency and the dual economies. There is a world wide dollar glut due to ZIRP stupidity, yet a domestic shortage.

Money Matters, an IMF Exhibit -- The Importance of Global Cooperation, System in Crisis (1959-1971), Part 4 of 7


Would it not make sense to have policies to address this?
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Old 03-12-2013, 01:48 PM
 
17,752 posts, read 15,107,768 times
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Quote:
Originally Posted by cpg35223 View Post
Here's my reasoning. Right now, at this very moment in history, China has the highest working-age population that it ever will. The demographics are such that, beginning around 2015, the working-age population begins a precipitous decline. Yet there is a enormous oversupply in housing. Not only that, but the price/income ratio sits at around 30-1. Now, to put things in perspective, Japan at the top of its property bubble had a price/income ratio of around 16-1, and the United States at the height of its property bubble had a price/income ratio of 5-1. However, the United States has the demographics to absorb its overbuilt real estate. In fact, it is well on the way to doing so. The same expectation simply is not in place for China, which means trillions upon trillions in real estate investments will have to be written off.
Depends on whether they run deficits or use mortgage credit to run their economy. If they run deficits then housing taking a dump with be their crown jewel. Unfortunately in our completely horrible system , money is only printed when real estate has equity so we have ourselves a monetary choke chain of a colossally stupid proportion. China has already allowed step one.

The last time I recall economies directly funding industry was Germany, Japan in WII and then the US followed suit to beat them. Too bad for Japan and Germany we used their trick long enough before we went back to feudalism.
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