China to pass US as world’s leading economic power this year

[kosko]

USA is running on fumes. This is why I am on the deflation side of the arguments vs hyperinflation that you side on Samseau. USA has to spend $100 in debt to just get a penny of growth.

But this is where you are mistaken. When governments default on their obligations, the currency loses value.

https://en.wikipedia.org/wiki/List_of_sovereign_defaults

^ Read any example from this list, the currency in every case became shit trash overnight.

There is still a lot of rope before the Govt defaults on its debt. The waste of Army spending will be put to use to make (force) people by Treasuries if it ever came to that point. What has happened with Japan would be of reference with the Govt essentially redirecting citizen savings into the Treasury market to keep it a float will essentially happen in America before the music stops. All I am saying is that the depression of asset prices will become a reality before the neck break moment when things inflate out of control. My take is you will see the 1970s stagnation again before we see any Zimbabwe style shit in the USA. The UK and Japan had stagnated in economic commas for close to 20 years now, the USA could likely see the same fate but I am not sure how much of that the people in the USA could take.

 

[Handsome Creepy Eel]

I've always been curious how the male/female imbalance will play out there. Millions upon millions of men with little chance of mating would seemingly be a powder keg waiting to explode.

Me too, but the USA has a similar gap (because of the Alpha/Beta divide, not the number of individuals of each gender), and it hasn't exploded yet. I think porn has done a lot to blunt the negative effects that would usually appear from such an imbalance.

 

[Mekorig]

I've always been curious how the male/female imbalance will play out there. Millions upon millions of men with little chance of mating would seemingly be a powder keg waiting to explode.

Me too, but the USA has a similar gap (because of the Alpha/Beta divide, not the number of individuals of each gender), and it hasn't exploded yet. I think porn has done a lot to blunt the negative effects that would usually appear from such an imbalance.

Well, a very small contribution to keep the explotion off is the recent surge of chinese/african couples. China is investing a lot in Africa, usually putting their own workforce on those proyects, and the workers end up marrying african women. This cause a whole new issue with the tipical chinese xenophobia.

 

[RussianRootCanal]

I'm not very knowledgable on economics but I go to a public university ranked in the 20's in the states and the Chinese students here drive: brand new BMW M3's, AMG Benz's, S line Audi's, Nissan GTR's, and even McLaren's, Lamborghini's, Bentleys and Maserati's. Take that for what it is.

 

[BadWolf]

"I've always been curious how the male/female imbalance will play out there. Millions upon millions of men with little chance of mating would seemingly be a powder keg waiting to explode. "



You aren't accounting for the samesex pref population which seems to be growing in number by day. Even if 1/100 are, that is still a huge percentage of the population. There are alot here in the South...

Anyone who wants to live in China is absolutely nuts. Most people are doing their best to get out. People who talk extensively about wanting to do business in/with China... most of them I would wager have never spent much time with actual Chinese people or in China itself.

 

[Jaydublin]

The simple fact of the matter is that America's productive population is dwarfed by it's non-productive population.

For a lot of them, their productive jobs were taken away and sent overseas

Or through NAFTA.

I saw that firsthand due to the railroad, Canadian Pacific, that I used to work for. Traffic easily doubled on the route from the border in ND to Chicago after that passed, if not more.

This, I am currently working in Chihuahua, Mexico and this place is like a Detroit back in the day except in Aviation, though they do have a little bit of everything going on. There are plants everywhere. People don't even need to worry about there job as there is another 1 right around the corner. They don't make much but considering that in their culture it is still normal to live with the family until the 30s, they have plenty to spend and they do. At my plant the Mexican engineers make 22,000 -36,000 pesos a year roughly.

Its not like the states where there are few engineers, here they are everywhere in the plants. The engineers to operator ratio is crazy. Its also noticeable how young everyone is. In the USA plants are full of 50+ year olds. Here they are almost entirely 23-33 year olds

Juarez is another city that is just like this one. Loaded with jobs.

Multiple plants in Canada and the USA are shipping more and more projects. The towns are certainly growing because of this as well.

Actually, there is a ton of opportunity for business.

 

[Jaydublin]

I've always been curious how the male/female imbalance will play out there. Millions upon millions of men with little chance of mating would seemingly be a powder keg waiting to explode.

Me too, but the USA has a similar gap (because of the Alpha/Beta divide, not the number of individuals of each gender), and it hasn't exploded yet. I think porn has done a lot to blunt the negative effects that would usually appear from such an imbalance.

Well, a very small contribution to keep the explotion off is the recent surge of chinese/african couples. China is investing a lot in Africa, usually putting their own workforce on those proyects, and the workers end up marrying african women. This cause a whole new issue with the tipical chinese xenophobia.

I wonder what those bitches are gonna look like.... Poosy paradise in a few decades?

 

[Veloce]

I'm not very knowledgable on economics but I go to a public university ranked in the 20's in the states and the Chinese students here drive: brand new BMW M3's, AMG Benz's, S line Audi's, Nissan GTR's, and even McLaren's, Lamborghini's, Bentleys and Maserati's. Take that for what it is.

That's because those students come from China's 1%. Not exactly an accurate depiction of the average Chinese citizen.

 

[RussianRootCanal]

Maybe so, but it's literally having an effect on our economy

http://mobile.businessweek.com/arti...tudents-in-u-dot-s-dot-boost-luxury-car-sales

 

[Alpharius]

This is false. The Chinese government can do whatever it wants. China is not too big. The government is simply too strong to need to change. It's practically lawless out in China. Their population is uneducated. Their population is poor. People who do get educated either a.) get the fuck out of the country or b.) exploit the system in place, and make enough money that they have no reason to change.

I was in China during the Jasmine revolution. China takes things like that very seriously. It was squashed. Reporters got murdered. Fire hoses were brought out at the first sign of unrest.

Additionally, citizens are not allowed to own guns. How can a government with almost total control over its country's internet be overthrown, especially when its own citizens cannot own guns?

Not quite. China's dealing with a lot of internal unrest at the moment. The machete spree in March and the train station bombing yesterday show serious unrest the the Uighur region, which has repeatedly been completely shut off from the internet and has had cell phone service dismantled, yet it hasn't managed to stop the unrest.

And Chinese citizens can own guns. Gun ranges are becoming increasingly popular across the country. It's as of now, it's prohibitively expensive hobby, 12RMB/bullet. Despite this, gun ranges are popping up all over. Hell, I went to one right next door to the Confucius Temple in Qufu, and saw another one when I was in Hainan.

VPNs are almost becoming more common in China, so the government doesn't have complete control over everyone, or the internet. I even stay in touch with a couple people on the mainland through Facebook.

 

[Big Nilla]

Wow, didn't know people could own guns in China. Wonder how many guns are floating around.

 

[pdub]

I've always been curious how the male/female imbalance will play out there. Millions upon millions of men with little chance of mating would seemingly be a powder keg waiting to explode.

China will send those boys out to conquer lebensraum in Africa, Australia, Myanmar and other countries that are not densely populated (by Chinese standards).

Either that or large parts of China turn into San Francisco's Castro District.

 

[svenski7]

Largest GDP by PPP makes for a neat talking point and is an accomplishment (regardless of the size factor). I'm really not surprised that this milestone may be passed right about now given recent economic trends and China's size (4 times that of the USA), but this doesn't change much in the long term IMO. The PRC is already passing the Lewis Turning Point and its demographic dividend will soon quit paying out. China will still get old before it gets rich.

Yeah but what does that turning point matter? America passed it's own Lewis Turning Point a long time ago. We've only made up for it with immigrants that have destroyed the culture and sucked the welfare system dry.

China can easily start taking in African immigrants or, instead of importing Africans, just create sweat-shops in Africa. They started doing this nearly a decade ago. So even if they don't have more of their own labor they will find it somewhere else, and since China has zero morals they will basically enslave the Africans for their own economic gain.

Meanwhile, the USA's economic continues to shrink every year. But most people are fooled into thinking that it's growing when they see positive GDP numbers, because these numbers do not account for inflation. If you take inflation into account, America's GDP has been negative for over a decade.

This is easiest to see when you evaluate America's GDP as a percentage of the world GDP:

http://acrossthestreetnet.wordpress.com/2012/11/28/the-cost-of-kidding-yourself/

Basically, America's elites are sucking all the wealth out of the middle class through home mortgages, student loans, and car loans. Meanwhile none of the money they take is reinvested into the American labor force, instead they find cheap third-world labor overseas to produce shit and sell back in America. This means America's money is slowly drained from two fronts.

On top of this, the immigrantion policy we have is retarded, claiming that we need "more labor to do the jobs American's won't do," when in reality our unemployment is at record levels so more immigrants has zero effect on reducing labor costs.

Everyone says immigration is to reduce labor costs in America and is therefore supported by big business, but this is a lie. America has more labor than it knows what to do with. Both educated and uneducated labor are at all time highs. College degrees at all time highs, and so is the population size.

The real reason immigrants are being let in is because it has become politically impossible to kick them out. Republicans know they cannot kick out the hispanics, because conservative whites are completely outnumbered. Thus liberal whites + immigrant hordes = more votes than conservative whites, so republicans are trying to pander to future immigrant votes by being pro-amnesty.

It won't work, of course, since all the new immigrants will vote democrat, but this is just one more step toward's America's next civil war.

Regardless America's economy is shit, and inflation is the only thing creating the appearance of a recovery. America is equally bad as China, probably much worse. China's demographic problem can easily be overcome with immigration or slave-labor sweat-shops in Africa, but America's problems can no longer be overcome by any political policy.

Once America goes bankrupt (i.e. hyperinflation), people are going to get very violent.

Samseau, as Althone pointed out, the importance you place upon Gross Domestic Product (GDP) in measuring economic progress is unfounded.

The Macroeconomics 101 definition of GDP is:

The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory.

Population of US = ~325 million
Population of China = ~1.1 billion (four times the US amount)

If the GDP of China and the US are equal, it means that the economic output of every US worker is equivalent to the economic output of four Chinese workers.

Have you ever been to Southeast Asia? The work ethic sucks and there are tons of inefficiencies.

A better measure of a country's global economic output might be Gross National Product (GNP) which attempts to measure the economic output of all things done by American citizens both domestically and abroad. This would account for all the jobs that companies such as Google and Microsoft create abroad whose income is then enhanced by said operations. Another example would be Japanese GNP when considering all of the Toyota manufacturing plants located around the world (US included). Unfortunately, GNP is extremely hard to calculate (just like GDP).

What foreign endeavors would add to China's GNP? I truly don't know. It is obvious that they are heavily investing in Africa and the US but I would still bet that their GNP would not be as impressive as that of Japan or the US.

You've also overlooked the quality of life factor. How many people on this forum would give up their Western citizenship to go live in China because their GDP has become the largest in the world? None. I'm pretty sure it was you who was hating on the RVFers over in Bangkok. That's a clean city compared to most in China.

The price of China's growth has been the pollution these factories have created. Some areas have pollution on par with nuclear fallout conditions.

People vote with their feet. Where are people trying to go? Where do the Chinese want to go? It seems everyone is still trying to get into the US — legally and illegally. Who's trying to get into China? A few North Korean escapees who from there are probably trying to get asylum in the US. I won't even go into what happens to them if the Chinese catch them.

I also recall you were an avid reader of alt-news sites such as Drudge and Zerohedge. That's great, I read them as well. So then you will remember the attention that Zerohedge has been giving the shadow banking / QE to infinity going on in the Chinese provinces. According to these libertadian :tinfoilhat: sites its even worse than the US financial system.

The US has problems but China is a powder keg in many regards.

 

[Suits]

And Chinese citizens can own guns. Gun ranges are becoming increasingly popular across the country. It's as of now, it's prohibitively expensive hobby, 12RMB/bullet. Despite this, gun ranges are popping up all over. Hell, I went to one right next door to the Confucius Temple in Qufu, and saw another one when I was in Hainan.

Are you sure that they can personally own fire arms? My understanding is that despite the increasing popularity of gun ranges, you have to rent a range gun. As well, although there are a few ranges here and there, the only one open to public use in Beijing, for example, is an hour's drive north of the city and there can be long lines on a busy day (any weekend).

 

[Alpharius]

And Chinese citizens can own guns. Gun ranges are becoming increasingly popular across the country. It's as of now, it's prohibitively expensive hobby, 12RMB/bullet. Despite this, gun ranges are popping up all over. Hell, I went to one right next door to the Confucius Temple in Qufu, and saw another one when I was in Hainan.

Are you sure that they can personally own fire arms? My understanding is that despite the increasing popularity of gun ranges, you have to rent a range gun. As well, although there are a few ranges here and there, the only one open to public use in Beijing, for example, is an hour's drive north of the city and there can be long lines on a busy day (any weekend).

Hunting rifles can be purchased if you can get your hands on a hunting permit, or if you belong to a sports organization. Not exactly easy access, but available for the right price (like everything else in China, pretty much).

 

[Samseau]

snip

GDP or GNP is irrelevant, they are too easily gamed by inflation and make-work jobs. What matters is GDP as a percentage of the world economy. That is the key metric because it gives a relative picture that cannot be obscured with inflation or make-work jobs.

All of America's growth right now is from debt. Take away the debt and everything dies.

China is the largest creditor nation in the world. They have nothing to worry about, they've got a huge cushion.

China is in the position the USA was prior to WW2.

I agree that China has cooked its books to a huge degree. They've got ghost towns, cities, and shopping malls. But it's still far less waste than America's diploma mills, unsold housing, and endless spending on useless consumer items.

Economists can measure the amount of trade and exporting a nation does, and China exports more than nearly any other country due to their ability to turn their citizens into slaves via their endless currency depreciation.

Compare that America, which has one of the highest trade deficits in the world. (If not the highest)

If America goes bankrupt, China can just start consuming their own goods instead of selling it to America. China has the infrastructure to be self-sufficient while America will descend into a world of no jobs and no money.

People are going to be blown away at how fast it happens, but that's because most people have no understanding of how economics work.

It's not about who consumes, but who produces. He who produces always wins in the end.

 

[Tail Gunner]

If America goes bankrupt, China can just start consuming their own goods instead of selling it to America.

You made some good points, but this one was way over the top. Do you really think that China wants to depend on an export economy? If China could make this happen, it would have done so long ago.

This is the Chinese leadership's freakin' dream. It would solve almost all of its many problems. But that is all it is -- a dream. Most Chinese are still dirt poor and have no purchasing power. There is also no retirement system, so any extra income goes towards purchasing gold, not consumer goods.

 

[Valhalla]

china can export cheaply because it devalues it's currency

 

[Royale]

^^^Exactly. China is purposely devaluing their currency.

Reuters

Washington has been pressing China for years to allow its currency to trade at stronger values. A weak yuan makes Chinese exports cheaper for U.S. consumers at the expense of U.S. producers. A weaker yuan also makes Chinese consumers less able to buy foreign goods.

By playing this devaluation charade with the U.S., it's indirectly disrupting the trade statutes established by both countries. At the same time, since they have the largest manufacturing base in the world (SOURCE), it seems to me that they are just trying to solidify their economic markets. This helps to explain their high GDP, but like many others said before, it doesn't take into account quality of life, life expectancy, etc. The country may be making economic strides, but I don't think it'll unseat the USA anytime soon. On another note, who's up to day game?

 

[Samseau]

If America goes bankrupt, China can just start consuming their own goods instead of selling it to America.

You made some good points, but this one was way over the top. Do you really think that China wants to depend on an export economy? If China could make this happen, it would have done so long ago.

This is the Chinese leadership's freakin' dream. It would solve almost all of its many problems. But that is all it is -- a dream. Most Chinese are still dirt poor and have no purchasing power. There is also no retirement system, so any extra income goes towards purchasing gold, not consumer goods.

Do you not see the big picture? Most Chinese citizens are already poor. They are not going to lose anything if the world slips into depression. China produces enough food to feed itself.

Chinese citizens buy gold because they know their currency is worthless. Citizens who own gold will be able to switch into a new currency much easier than citizens without gold.

I think China keeps up the devaluation game because it satisfies two roles:

1. Keeps Chinese citizens poor and unable to stand up to their own govt.
2. It bankrupts America.

If America was actually smart enough to place tariffs on Chinese goods, in order to prevent the slavery of Chinese citizens, the world would be a much better place both in America and China. But instead America's government caters to big businesses who wants free trade. Thus the only effective American response has been to print lots of money, which causes the Chinese government to devalue their currency even faster.

The effects of printing money in America have been extremely lopsided, however, with most of the freshly printed cash going to the top 6 American banks. These banks don't know how to spend their reserves, so instead of loaning it out to anyone they sit on their cash. That is why current excess bank reserves are at all time highs yet everyone is broke. This is why wealth concentration is also at all time highs in the top 1% of America: it's all a result of money printing.

This was the exact same situation in Weimar Germany before hyperinflation hit.

Proof:

http://en.wikipedia.org/wiki/Money_...s_in_the_United_States_Federal_Reserve_System

[attachment=18466]

^ Look at the chart. See the following: "Notes and coins in bank vaults (Vault Cash)" and "Federal Reserve Bank credit (required reserves and excess reserves not physically present in banks)"?

Those two items are only measured by "MB." What is MB? MB stands for "Monetary Base." What does the current monetary base look like?

https://research.stlouisfed.org/fred2/series/BASE/

It's been quadrupled since 2008. And it's going up at a breakneck pace:

[attachment=18467]

Currently our banks are sitting on an enormous pile of cash... so why is everyone starving for cash? Why does it feel like deflation instead of inflation?

Because inflation is a formula of (total money) x (money velocity) = (total supply of goods and services). Money velocity is the rate at which money is circulated through the economy.

So although money supply is at all time highs, how much is actually going through the economy?

[attachment=18469]

None. Money velocity is at all time lows. It has never been lower in all of recorded American history! Note that during the 1990's, when everyone felt rich, money velocity was at all time highs. The 90's in America were truly good times, all established by Reagan's policies in the 80's. That's why there's a continuous upward trend from 1986 to 1997. However, Reagan created this prosperity with the sin of debt, and once that bubble popped it has been a downward spiral ever since.

Regardless, low velocity is what is containing inflation right now. Because if money velocity were to increase on top of the insane excess reserves American banks have, inflation would start to spiral out of control. Gas and food would quickly double and triple in prices.

Additionally, not only is money not being circulated but the amount of money currently in the hands of people outside of banks are at all time highs!

https://research.stlouisfed.org/fred2/series/M2

[attachment=18470]

Do you guys not see how epic this is? America is beyond fucked. How can the economy be in such a deep recession despite being flooded with cash?

Why is money not circulating through the economy despite the fact that more money is on the sidelines than at any other time in history?

Why are prices rising right now despite the fact that money velocity is at all time lows? Gas is up over 50% since 2008. So are most food items. This should be impossible in a recessionary environment, but if you quadruple the bank reserves that money is going to leak out and cause inflation no matter what.

The FED doesn't know what it's doing. They are trying to force feed the American economy money when money is the last thing America needs. America needs circulation of its money, not merely more money. America needs jobs (the only method we have so far of circulating money efficiently) and not printed cash.

And because money isn't circulating properly, the government cannot collect any taxes to pay for its expenditures which is why the government has to take on more and more debt. Eventually this debt becomes unserviceable due to rising interest rates, or the money velocity increases and causes massive inflation. The outcome is the same either way: the destruction of the dollar (hyperinflation).

This brings us back to China. China's currency, and economy, works on the premise of being undervalued. So when the great global reset comes (it's mathematically guaranteed at this point, it was a while ago), China isn't going to suffer much if at all, while America's entire way of life will be destroyed forever.

China has nowhere to go but up, and America has nowhere to go but down. The day America did it's bailouts and started to print cash was the day America was doomed.