Will china surpass the U.S.? | 15 comments (15 topical, 0 hidden)
The cycle is broken (none / 0)
"U.S starts to grow what will china look like?"

China will grow, because the Chinese economy is mainly based on exports. When America can consume more China can export more, therefore grow.
Has America been in deflation for the last three decades? Because in this time Chona had an average annual growth of 10%. When was the last time America had that?
To China 8% growth is the minimum because they want to become stronger compared with their competition and they want to limit it below 12% because they are afraid that the economy will overheat.
For a foreigner you have very well adapted to the American "us-against-them-mentality" . China doesn't want to beat America, they want to exploit it. Big difference.

"china doesn't have most of the world U.S does"

None of them has most of the world, but admittedly America has currently a bigger part. What I'm trying to explain is that it won't stay that way.

After that you seem to talk about the benefits of having reserves. I could not have made a better point. Currently China's foreign currency reserves have reached a value of more than 1Trillion $. They could raise their own reserves with the blink of an eye, because they control the value of their own currency. That's the advantage of having an underrated currency. They can down or uprate it as they want. And they raised the value of their currency to fight inflation in the past.

"3% of the money supply is real money and 97% is in the computers"

Money in the computers is as real as printed money. There is no difference except that it is easier and faster to transport.

I have to say that it was really hard to read your post, because it was not always clear what you were speaking of and what your thought process was. Otherwise I could have explained things more accurately.

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 11/29/2009 11:48:18 AM EST

[ Parent ]
You don't get it (none / 0)

The fact that you have stated that AMERICA had no growth is showing the lacking of understanding you have.To simply put, america is in a deflation now due to INFLATION.What this means is they where at their highest in growth,then they began to fall now.Therefore, your logic is incorrect and you need to look at that.The other is 97% of money in computers is NOT REAL PAPER money,and the fact that it is easier to transport means the fed can easily move it out of the monetary circulation,which in turn raises the dollar;this is also what the fed approves-- HIGHER DOLLAR.

You state that china can double their reserves,how will they double it if there is no demand for their currency?United states currency is the highest demanded,and as i have stated that this is why the fed is issuing money to England,which deliver the U.S reserves it's banks and the banks of the world.This is due to england being the underwriter and the dollar is in demand.

This is it,china economy as crashed before and time again JUST like the U.S..It is just recently they have return to growth,and in those time U.S. was in the bubble housing market and it's stock market was booming;which is the opposite of what was occurring in china.Lesson"THE CYCLE" you need to get that, and also get that china's growth will not last just like all the countries who faced recessions.That includes china they face it before and will again.

by sesshoumaru2st on 11/29/2009 02:07:00 PM EST

[ Parent ]
Just recently for 30 years (none / 0)
"The fact that you have stated that AMERICA had no growth is showing the lacking of understanding you have."

I didn't state that, I asked a rethorical question (more on that later). Of course America had growth, but so had China. There is no correlation that the Chinese economy is growing when the American one is getting smaller. As I explained it is even easier for the Chinese economy to grow when demand is high in America.

"You state that china can double their reserves,how will they double it if there is no demand for their currency?"

It's not as easy as that. It is a fact that China is keeping the value of their currency artificially low, so they are able to export more. If they would stop doing that the Yuan would become more valuable. It is not the case that people somewhere say: Oh, $$ are great, they are nice and green and American, I want to have many of them.

How much a currency is worth is determined by much more complicated things and reflects the economic power of the country that currency is mainly used in compared to other countries. That is the reason why the $ has lost half its value compared to the € in the last 5 years.

If you have enough reserves it is quite easy to keep your currency artificially low. Keeping it high is much more difficult and hardly to achieve artificially.

"It is just recently they have return to growth,and in those time U.S. was in the bubble housing market and it's stock market was booming;which is the opposite of what was occurring in china."

Another example of your language making you hard to understand.
I have no idea what you are trying to say here.
In the last 30 years America had phases of bigger (about 4%) and smaller growth (about 1%). Some industries have struggled in those times (e.g. internet bubble), but most of the time there was a small growth. Then one year ago the housing market bubble burst, the stock market was influenced by that, but the stock market is recently growing again.

Now we can compare that to China. Indeed China had a growth of 8-9% in the last year. This is not really high, because America's economy has tanked.
It is not us against them. It is a low number, because China could export less, because of the declining demand in Europe and America. That was the worst that could have happened to the Chinese industry.
That's why their numbers are so bad.
Usually China's GDP grows at about 10%. That was the average during the last 30 years. In this time the growth was always between 8 and 14%. There was no "cycle". If 30 years to you are just a recent trend, than please explain to me what could be a substantial, long term trend.
And while America had to get bigger debt (which decreases the value of the currency) China increased their reserves.

"The first thing Fascists usually try to do is silencing the opposition."

by opposition on 11/29/2009 03:03:36 PM EST

[ Parent ]

Will china surpass the U.S.? | 15 comments (15 topical, 0 hidden)