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I'm not about to read that article. But I've considered China to be a major problem for at least 10 years. I've always thought their economy was whatever the government said it was.
I think the usual method in this forum by the doomsdayers is "my prediction are right, and if facts shows I'm wrong then the facts are lies."
The same thing could be said about the Federal Reserve/QE/Corporate Bailout cheerleaders that refuse to contemplate any other viewpoint besides the one coming directly from the Fed itself or their pundits.
People predicting doom are doing so because they fundamentally disagree with what The Fed is doing/has done post 2008. Talking about the exact timeline is a distraction from the issues people have with the Federal Reserve and their favorite banks.
To give Pento credit where it is due, he has been describing the macro economic issues for quite some time. The narrative is pretty straightforward and he is certainly not alone in in warning against the ballooning debt bomb that the Fed and all Central Banks were creating. This particular article is good in the way it concisely describes a complicated macro situation.
The one part that he glossed over, and the key to why QE failed so miserably is that, as Pento described, QE was a money transfer, what he's should have contnued to say was that the transfer was ultimately all to the top 1%. Had the transfer been to the 99% from the 1% the economic recovery might actually had succeeded since there would be more money in more people's pockets. Instead QE was merely an exercise in ballooning household and corporate debt.
Cash transfer is one thing. We live in global economy, GWP is what we are dealing with not GDP. So when you transfer a job from a $20 an hr labor pool to a $1 a day labor pool, GWP contracts by the difference in wages. Unless you generate new debt to paper over the difference. But then what you get is less of the economy based on wages and more based on trading money.
If you move a lot of jobs from high wage markets to low wage markets the first thing you get is a debt bubble then the second thing you get is deflation as the debt bubble pops.
The problem isn't that they got our jobs, it is that they also didn't get our wages.
That is the real transfer of wealth from the middle to the top. Undo it by upping wages world wide. US minimum wage everywhere or higher.
Cash transfer is one thing. We live in global economy, GWP is what we are dealing with not GDP. So when you transfer a job from a $20 an hr labor pool to a $1 a day labor pool, GWP contracts by the difference in wages. Unless you generate new debt to paper over the difference. But then what you get is less of the economy based on wages and more based on trading money.
If you move a lot of jobs from high wage markets to low wage markets the first thing you get is a debt bubble then the second thing you get is deflation as the debt bubble pops.
The problem isn't that they got our jobs, it is that they also didn't get our wages.
That is the real transfer of wealth from the middle to the top. Undo it by upping wages world wide. US minimum wage everywhere or higher.
Agreed. And don't use the money of middle class America to facilitate the destruction of their own jobs.
Cash transfer is one thing. We live in global economy, GWP is what we are dealing with not GDP. So when you transfer a job from a $20 an hr labor pool to a $1 a day labor pool, GWP contracts by the difference in wages. Unless you generate new debt to paper over the difference. But then what you get is less of the economy based on wages and more based on trading money.
If you move a lot of jobs from high wage markets to low wage markets the first thing you get is a debt bubble then the second thing you get is deflation as the debt bubble pops.
The problem isn't that they got our jobs, it is that they also didn't get our wages.
That is the real transfer of wealth from the middle to the top. Undo it by upping wages world wide. US minimum wage everywhere or higher.
China's wages have risen considerably, rising from ~$3000 in 2006 (already well into the wage explosion) to ~$8500 in 2015. The jobs in the low wage markets are actually paying a lot more than they used to.
China is a large part of that growth. Many jobs are not "transferring" at this point. Rather, new jobs are being added. The big question is whether China's overall economic growth is slowing permanently, or whether it is undergoing a temporary slowdown. If the slowing is permanent (or at least long-term), then continued wage growth in China is not sustainable at the levels we have seen, and that will drag on real, global wage growth.
China's wages have risen considerably, rising from ~$3000 in 2006 (already well into the wage explosion) to ~$8500 in 2015. The jobs in the low wage markets are actually paying a lot more than they used to.
China is a large part of that growth. Many jobs are not "transferring" at this point. Rather, new jobs are being added. The big question is whether China's overall economic growth is slowing permanently, or whether it is undergoing a temporary slowdown. If the slowing is permanent (or at least long-term), then continued wage growth in China is not sustainable at the levels we have seen, and that will drag on real, global wage growth.
China. There are two Chinas. One in the cities and one in that is rural. China, they are about as see through as coal.
We are in for a debt clearing event. About 90% of the debt out there is bad. If you want that debt to be good then you need a lot of wage driven inflation. Drive inflation with wages not with debt.
China. There are two Chinas. One in the cities and one in that is rural. China, they are about as see through as coal.
We are in for a debt clearing event. About 90% of the debt out there is bad. If you want that debt to be good then you need a lot of wage driven inflation. Drive inflation with wages not with debt.
Per my link, we actually have real wage increases, worldwide (and we have had them for about a dozen years, at least. Chinese wages are a major driver (in spite of the urban/rural divide).
Per my link, we actually have real wage increases, worldwide (and we have had them for about a dozen years, at least. Chinese wages are a major driver (in spite of the urban/rural divide).
What we have is 62 Billionaires owning more wealth than 50% of the world's population and the Billionaires laundering their money in the Canadian housing market. The Corruption Bubble is definitely growing. When it pops depends upon which geographic area erupts first, but people worldwide are at their their boiling point with corporate/political corruption. BTW, I don't think we can take any stats coming out of China seriously.
"In fact, Buiter says that because of political dysfunction in the U.S., America is the least-prepared economy for the major economic changes coming in the years ahead.
Via e-mail, he spelled out his concerns: "Dealing with the growing inequality and possible growing job losses caused by the Fourth Industrial Revolution will require a much larger redistributive role for the state. A guaranteed minimum income and universal state-funded health care, funded out of taxes would not raise many eyebrows in Europe. It would meet huge resistance in the U.S., where there only is a decent social safety net for the old."
In other words, economic changes that will be brought on by technology necessitate major redistributional efforts. And due to U.S. political resistance, that is unlikely to happen."
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