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China's Subprime Crisis Is Here

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Re: China's Subprime Crisis Is Here

#171

Post by jpeg_hero »

jcoffland wrote: post #33

The American media seems to jump at any opportunity to dismiss China as an economic threat. It makes us feel more secure but leads to a public informed only about one side of China's story. Namely the part our ego can handle. China has regularly surpassed the US in number of cars sold since 2009. China also holds more US debt than any other country. Another way to put that is the US government owes China over 1 trill…

>If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

>J. Paul Getty

we have powerful enough printing presses to print $1T USD.

Re: China's Subprime Crisis Is Here

#172

Post by khuey »

jcoffland wrote: post #91
carboncopy wrote: post #64

Earlier quoted context omitted.

No, I read it right. It's American public debt they hold. They don't have 1 trillion dollars in cash sitting in a vault. They are holding U.S. Treasury bonds. And again, I don't understand why having 1 trillion dollars in a reserve bank is a useful measure of economic power. The Chinese economy has a GDP of $10tn compared with the U.S. economy of $17tn. That is an example of a meaningful metric of power. ^^^ the pare…

They have $3.9T worth of cash reserves sitting in a vault in addition to holding over $1T in US debt.

No, they don't. There's only 1.4 trillion dollars in circulation.

http://www.federalreserve.gov/faqs/currency_12773.htm

Re: China's Subprime Crisis Is Here

#173

Post by DominikR »

karmacondon wrote: post #133
jcoffland wrote: post #33

The American media seems to jump at any opportunity to dismiss China as an economic threat. It makes us feel more secure but leads to a public informed only about one side of China's story. Namely the part our ego can handle. China has regularly surpassed the US in number of cars sold since 2009. China also holds more US debt than any other country. Another way to put that is the US government owes China over 1 trill…

It's interesting that all of the numbers in your post seem to be significant, but really aren't. The US "owes" China a trillion USD because the Chinese, investing on a national scale, need a safe investment that can support trillions and trillions of yuans. And in that regard right now, the US is the only game in town. China's GDP growth is high, but that's because they're starting from a GDP that's much lower than t…

> It's natural to cheer for your team and boo the other team. I wouldn't take too much offense.

It is a primitive behaviour because it fosters racism and hatred for others instead of cooperation. The one thing we do not need more of right now is hatred, there's enough of it in the world.

Edit: It is also one thing if a private person holds his opinion (however detestable it might be - I don't care) and if we get this shoved down our throats on a large scale via all types of media and politicians. The latter is what I feel is offending.

Re: China's Subprime Crisis Is Here

#174

Post by busterarm »

idanoeman wrote: post #166
karmacondon wrote: post #133

Earlier quoted context omitted.

It's interesting that all of the numbers in your post seem to be significant, but really aren't. The US "owes" China a trillion USD because the Chinese, investing on a national scale, need a safe investment that can support trillions and trillions of yuans. And in that regard right now, the US is the only game in town. China's GDP growth is high, but that's because they're starting from a GDP that's much lower than t…

Why would growth be "logarithmic"? Growth is exponential, with rates that yes, probably decrease over time. It's not logarithmic.

https://www.google.com/search?q=logarithmic+vs+exponential+c...

An exponential curve, by definition, does not decrease over time.

Re: China's Subprime Crisis Is Here

#175

Post by altcognito »

cylinder wrote: post #155
bdisraeli wrote: post #153

Earlier quoted context omitted.

The US can't default because it prints the currency it's debt is denominated in.

the US can default if it wants to.

Oh silly, why would anyone want to...

http://www.masslive.com/politics/index.ssf/2013/09/house_rep...

Oh yeah, now I remember why our credit rating was lowered.

Re: China's Subprime Crisis Is Here

#176

Post by idanoeman »

busterarm wrote: post #174
idanoeman wrote: post #166

Earlier quoted context omitted.

Why would growth be "logarithmic"? Growth is exponential, with rates that yes, probably decrease over time. It's not logarithmic.

https://www.google.com/search?q=logarithmic+vs+exponential+c... An exponential curve, by definition, does not decrease over time.

Sure, but a piecewise-linear function on a log-log graph is still qualitatively "exponential growth", with a rate which changes over time.

Re: China's Subprime Crisis Is Here

#177

Post by idanoeman »

BookmarkSaver wrote: post #167
idanoeman wrote: post #166

Earlier quoted context omitted.

Why would growth be "logarithmic"? Growth is exponential, with rates that yes, probably decrease over time. It's not logarithmic.

Are you serious? As they start reaching the upper levels of wealth the ability to keep catching up decreases dramatically. When they are an impoverished country and a wealthy partner throws money at and around them, they will start catching up fast because that amount of wealth is massive compared to what they had.

Logarithmic growth would literally be sub-linear growth. Historically countries growth looks something like a piecewise-linear growth in a log-log graph.

Re: China's Subprime Crisis Is Here

#178

Post by GFK_of_xmaspast »

BookmarkSaver wrote: post #167
idanoeman wrote: post #166

Earlier quoted context omitted.

Why would growth be "logarithmic"? Growth is exponential, with rates that yes, probably decrease over time. It's not logarithmic.

Are you serious? As they start reaching the upper levels of wealth the ability to keep catching up decreases dramatically. When they are an impoverished country and a wealthy partner throws money at and around them, they will start catching up fast because that amount of wealth is massive compared to what they had.

Are you sure you're not thinking of "logistic".

Re: China's Subprime Crisis Is Here

#179

Post by petermcd »

jcoffland wrote: post #33

The American media seems to jump at any opportunity to dismiss China as an economic threat. It makes us feel more secure but leads to a public informed only about one side of China's story. Namely the part our ego can handle. China has regularly surpassed the US in number of cars sold since 2009. China also holds more US debt than any other country. Another way to put that is the US government owes China over 1 trill…

A few points to ponder:

- Money spent counts toward GDP, even if the money comes from a bank loan that will never be repaid (Example: big real estate project in a third-tier city that will never sell for its listed price)

- China's foreign reserves can not be used to pay back debt denominated in Chinese Yuan (foreign currency reserves are the result of people/institutions giving the Chinese government foreign currency in exchange for Chinese Yuan -- you can't do the conversion twice)

- China has a shrinking workforce due to demographic shifts. Specifically, they have moved from an agrarian birthrate to an industrialized one.

You are correct that China has a huge population and workforce. Their wages are rising (which is good for China!) which makes them less competitive as the factory to the world. The Chinese are making progress at moving up the value ladder to help justify those higher wages, but they aren't quite at the top yet. And the workers are very much getting squeezed between high living costs and soon-to-be higher costs to service all that debt and pay benefits to those not in the workforce. These are some reasons why experts are suggesting that China needs a new and more sustainable growth model.

The Chinese government will not allow the Chinese banks to fail the same way the USG did for Bear Stearns. They will likely buy the bad loans from the banks at face value and put them in government-owned asset management companies who will attempt to restructure them.

The cynic in me expects it will probably go worse than Japan since the '90s.

Re: China's Subprime Crisis Is Here

#180

Post by duaneb »

jcoffland wrote: post #33

The American media seems to jump at any opportunity to dismiss China as an economic threat. It makes us feel more secure but leads to a public informed only about one side of China's story. Namely the part our ego can handle. China has regularly surpassed the US in number of cars sold since 2009. China also holds more US debt than any other country. Another way to put that is the US government owes China over 1 trill…

I don't understand why a "real reason" is necessary when we may have shared interest. Why not report on China? There are just as many—like you—eager to report how invested we are in each other.
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