China, What Me Worry?

[sailaway21]

Between keeping up with the threat of the yellow peril and the NAFTA super-highway, which I'm lobbying to go through my backyard (I can move the boat), it's easy to miss things. You sceptics can laugh all you want, but it's very important that the super-highway go through my backyard. I have carefully calculated this and any other route will result in massive tie-ups to and from Lambeau Field, Wrigley, and the 2008 World Champion Detroit Tiger's Comerica Park. I can only do so much, and the sad reality is that the St. Louis Cardinals are going to have to move their stadium or start playing interstate stick ball. But enough about me, you get the picture, I'm very busy with weighty matters. So it should be no surprise that I, as well as, well everybody with a calculator, missed the correct answer on the final exam regarding China. And this one isn't the kind of question where they're going to be real happy about getting partial credit. A side benefit is that Wal-Mart shoppers can probably relax, unless they're in Maryland.

It seems that China's economy is only 60% of what we thought it was. No, this estimate was not done by the CIA or whoever dreamed up that last National Intelligence Estimate. (shouldn't the N.I.E. have a question mark after it?) This one was done by the guys with the BS's not the BA's, not that there's much difference anymore. The only consolation is that these guys are economists and accountants, not offshore navigators, although it's possible electronic errors were a factor.

So, Happy New Year, the Yellow Peril is still in the incubator and much smaller than you thought in 2007. See, you're not even out of your pj's on New Year's Day and it's already a better year. Actual story below.

http://www.latimes.com/news/opinion/...day-commentary

[AboardIndigo]

I've always wondered whether China's social issues were being considered when reading articles discussing her apparant rise in economic and political might. It seems that the World Bank is only now beginning to do the same.

How is it possible that supposed experts can have such a blindered view of things?

[sailingdog]

Given the current average IQ of politicians today... the NIE should have question marks and an asterisk next to it.

[TSteele65]

China still owns a large chunk of our debt. We'd better hope the dollar stabilizes sometime soon.

[sailaway21]

Didn't read the article didja?

[TSteele65]

Didn't understand it, didja?

The article talks about the overestimation of Chinese GDP and purchasing power (and its meaning for US companies trying to sell to a Chinese middle class which isn't as developed as previously thought). It doesn't address the fact that China still owns roughly $400 billion of of US debt in the form of T-bonds. If the dollar continues to tank, China could well divest itself, partially or totally, in favor of more stable currencies.

If your point in posting this opinion piece is to say that China is no economic threat, I think the debt issue is the elephant in the room, so to speak.

[Idiens]

To enhanced your level of paranoia.\\http://www.atomfilms.com/film/haha_a...tical_parodies

[sailaway21]

I'd be really interested in those more stable currencies, since T-Bills are backed by the full faith and credit of the US government which is about as conservative an investment as one can make. Which is probably why the Chi-coms bought them in the first place. The debt issue is only significant vis-a-vis China when considering other factors regarding China, which point the article attempted to make. In the meantime, shareholders of John Deere and Catapiller continue to reap the rewards of their product's heavy demand in China and elsewhere, which affects the previous goblin in the closet, the trade deficit. We've been here before, most notably in the 1980's when Japanese dominance was forecast for as far as the eye could see. Of course, reality was that the Japanese were about to enter a protracted period of stagflation, from which they've yet to recover, and the US was about to commence the largest peace-time expansion of it's economy in history. Sinophobia will probably continue, despite any economic basis.