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China's biggest strength, their large population of "middle class" is also their biggest weakness...
China is a communist state, a large middle class doesn't do "communism" well, China will either conflict with them or need to change their government
China is more a centrally directed command economy. And working so well so far, as millions have recently risen up to their middle class. As they pivot more towards their consumers, their people will demand many of the same social supports as we did post-WW2.
China is more a centrally directed command economy. And working so well so far, as millions have recently risen up to their middle class. As they pivot more towards their consumers, their people will demand many of the same social supports as we did post-WW2.
EXACTLY....! People act like China's middle class will happen over night. It will take time and you are correct. Eventually China will have to create the safety nets that the west had to create after WW2. With such a large population companies in the west will be fighting to sell their products to China and other large eastern countries with large populations. The west has pretty much erased their middle class.
Gradual changes as China moves more toward a consumer economy like ours. They may indeed end up buying more stuff from us. And also from many other nations. Looking for cheap and looking for quality.
cheap/quality goods? from where? china is the cheap producer of the world, if they cant buy their own goods...
if china insist on continuing to subsidize chinese factories to keep costs low, china will eventually run out of money, the rest of the world run deficits to subsidize social welfare. chinese social welfare = subsidizing factory jobs but it is still the same deficit problem as the west
cheap/quality goods? from where? china is the cheap producer of the world, if they cant buy their own goods...
if china insist on continuing to subsidize chinese factories to keep costs low, china will eventually run out of money, the rest of the world run deficits to subsidize social welfare. chinese social welfare = subsidizing factory jobs but it is still the same deficit problem as the west
Cheap and/or quality, depending on their consumer's choice or source.
China will no sooner 'run out of money' than we. i.e. never as we are both monetarily sovereign. Or have the same 'problem' depending on how you view it.
China holds I believe 2 trillion dollars worth of US debt. Almost every media says it's a doomsday if China were to dump its holding in US debt.
Is anyone able to paint a picture of that scenario? Yes we all know price of US debt can plummet and yield can shoot up; I am talking 3,4, or even 10 steps beyond the obvious. What is that doomsday?
I for one, might convert most of my assets to US debt if 30 year Treasury yield goes to say 5-6%. Seems to me it would be a good opportunity to pick up some quality investment...
Hmmmm, "dollar bills" (federal reserve notes) are IOUs denominated in dollars (see Title 12 USC Sec 411). They were repudiated in 1933, in HJR 192. They're basically worthless notes, that are borrowed, at usury, into existence.
And to pay interest with more frns, requires more deficits to authorize their creation. And congress is borrowing more than it pays in debt service. And there is only 1.5 trillion 'dollar bills' in circulation. While the government's budget is 3.5 trillion...
Yessir.
Nothing to worry about.
Move along, move along.
The issue is would be the timing and quantity of debt they dump on the market. We have significant cuerrent deficits that need be funded this year plus a rising interest rate will mean we have to issue more debt just to service the interest holding cost. Now if China dumps the entire portfolio during a period in which we are trying to issue significant debt to fund government spending one can see the impact on interest rates, value of the dollar, and governments ability to fund the budget. Finally if we enter a war you can also see the pressure that starts to appear.
The international financiers/power elite want a one world government based on the Chinese blend of Communism and hyper capitalism. One more war and 5% interest in the debt....USA can't service the debt = toast. Power elite win....yet again.
The international financiers/power elite want a one world government based on the Chinese blend of Communism and hyper capitalism. One more war and 5% interest in the debt....USA can't service the debt = toast. Power elite win....yet again.
Dumping their dollars would only make their exports more expensive for Americans to buy. They want a strong, not a weak, dollar.
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