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Old 12-12-2012, 10:00 PM
 
Location: Atlantis
3,017 posts, read 3,465,803 times
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The US as a government that owes China money, should do what an individual debtor in the US does once he has defaulted and starts getting calls from collection agencies.


Threaten not to give them anything, then 'settle' for 30 cents on the dollar or less. It's not like China can garnish the US governments wages (money collected by the IRS in the form of taxes) or seize assets.

Settle up all at once for pennies on the dollar with China then put tariffs on everything they attempt to export into the US.

Problem solved.
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Old 12-12-2012, 10:18 PM
 
28,900 posts, read 48,883,228 times
Reputation: 46302
First thing's first. Every time I see someone taking the trend line of past Chinese growth and interpolating future growth from it, I shake my head.

Why? Because nobody knows what the real data really is in the first place. The Chinese have been cooking their books for years, chiefly because party hacks in the provinces massage their data to meet the demands of the party leaders in Beijing. Yet there are some tells that indicate that Chinese growth has not been what they say it has been. For example, electrical production has been increasing at about half the rate that the Chinese say their GDP has grown. This is an economic impossibility, for you have to have at least corresponding increases in electrical production to power new machinery, new computers, and the better lifestyles of workers. Nobel prize economist Lester Turow has pointed that out but has been roundly ignored.

Next point? Almost the entirety of Chinese growth has been based on a very volatile commodity -- the price of labor. A couple of manufacturers I work with have begun pulling back manufacturing to the United States because of the precipitous rise in labor costs. One watched their labor costs rise 25% in 2011 alone. As an anecdote, I went to a large furniture trade show in September. At previous shows, the Chinese manufacturers were really making inroads into the market. At this year's show? The Chinese were suddenly not much of a factor while the Indonesians were everywhere.

Further, China has not made the leap to high-tech manufacturing. Yes, computers and iPods are put together there. However, roughly 95% of their high-tech manufacturing is assembly only. The parts are shipped in, they are put together, and the finished product is shipped out again. Because, once again, the only thing the Chinese are supplying are workers.

And that's the final problem. Because not only are wages rising inexorably, but China is actually facing an enormous demographic crisis. Right now in history, for the next 2-3 years, China will have the highest working age population that it ever will. After that, the working age population begins a fairly precipitous decline, a direct result of Mao's One Couple One Child policy. In fact, in the later part of the 21st Century, the United States working-age population may be within 40-50 million of China's.

Even more frighteningly for Chinese planners, there is no healthcare system, no savings, no sophisticated investment instrument in place to support hundreds of millions of aging workers. What's more, because of One Couple One Child, that means that we will be seeing a ratio of one child supporting two parents, whereas Chinese society used to rely on large extended families to take care of its elderly.

To me, China is the ultimate bubble. When it pops, the country will suffer massive economic dislocation and, oddly enough, the United States will be there to pick up the pieces.
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Old 12-13-2012, 12:08 AM
 
7,993 posts, read 7,484,159 times
Reputation: 2876
Quote:
Originally Posted by cpg35223 View Post
First thing's first. Every time I see someone taking the trend line of past Chinese growth and interpolating future growth from it, I shake my head.

Why? Because nobody knows what the real data really is in the first place. The Chinese have been cooking their books for years, chiefly because party hacks in the provinces massage their data to meet the demands of the party leaders in Beijing. Yet there are some tells that indicate that Chinese growth has not been what they say it has been. For example, electrical production has been increasing at about half the rate that the Chinese say their GDP has grown. This is an economic impossibility, for you have to have at least corresponding increases in electrical production to power new machinery, new computers, and the better lifestyles of workers. Nobel prize economist Lester Turow has pointed that out but has been roundly ignored.

Next point? Almost the entirety of Chinese growth has been based on a very volatile commodity -- the price of labor. A couple of manufacturers I work with have begun pulling back manufacturing to the United States because of the precipitous rise in labor costs. One watched their labor costs rise 25% in 2011 alone. As an anecdote, I went to a large furniture trade show in September. At previous shows, the Chinese manufacturers were really making inroads into the market. At this year's show? The Chinese were suddenly not much of a factor while the Indonesians were everywhere.

Further, China has not made the leap to high-tech manufacturing. Yes, computers and iPods are put together there. However, roughly 95% of their high-tech manufacturing is assembly only. The parts are shipped in, they are put together, and the finished product is shipped out again. Because, once again, the only thing the Chinese are supplying are workers.

And that's the final problem. Because not only are wages rising inexorably, but China is actually facing an enormous demographic crisis. Right now in history, for the next 2-3 years, China will have the highest working age population that it ever will. After that, the working age population begins a fairly precipitous decline, a direct result of Mao's One Couple One Child policy. In fact, in the later part of the 21st Century, the United States working-age population may be within 40-50 million of China's.

Even more frighteningly for Chinese planners, there is no healthcare system, no savings, no sophisticated investment instrument in place to support hundreds of millions of aging workers. What's more, because of One Couple One Child, that means that we will be seeing a ratio of one child supporting two parents, whereas Chinese society used to rely on large extended families to take care of its elderly.

To me, China is the ultimate bubble. When it pops, the country will suffer massive economic dislocation and, oddly enough, the United States will be there to pick up the pieces.
The One child policy was not made by Mao. In fact he was against it.
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Old 12-13-2012, 10:02 AM
 
28,900 posts, read 48,883,228 times
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Originally Posted by Bettafish View Post
The One child policy was not made by Mao. In fact he was against it.
Does it really matter? What's more, I'm sure that if Mao was seriously opposed to it, he would have kept it from being implemented.
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Old 12-14-2012, 04:16 AM
 
7,993 posts, read 7,484,159 times
Reputation: 2876
Quote:
Originally Posted by cpg35223 View Post
Does it really matter? What's more, I'm sure that if Mao was seriously opposed to it, he would have kept it from being implemented.
So you don't know the one child policy was enforced since 1978, and Mao had been dead for two years by then?

In the 1950s, a scholar named Ma Yinchu said China should control population. Mao and other leaders attacked him and he was forced to resign from the position as the dean of Zhejiang University.
In 1979, the Chinese Communist Party officially apologized to him.

Ma Yinchu - Wikipedia, the free encyclopedia
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Old 12-15-2012, 02:58 PM
 
5,369 posts, read 10,283,190 times
Reputation: 4423
Quote:
Originally Posted by cpg35223 View Post
Does it really matter? What's more, I'm sure that if Mao was seriously opposed to it, he would have kept it from being implemented.
And while we are on details, details . . . the idear of going beyond the known data points is generally called Extrapolation, not Interpolation (inter - being in between) . . .

But let's Extrapolate China, then. As far as the numbers -- they have had, do have and will continue to have the numbers to burn. Who cares if the population ages, just a big die-off. Think of this maybe more along the lines of a Bee or Ant Colony. Not US, per se. Very different value system and operation. Study some of the wars and real history.

So. Big Problem(s) = Big War(s). That is what the likely Extrapolation says is coming.
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