Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (6717)	8/5/2001 10:28:01 PM
From: Jacob Snyder	Read Replies (2) of 74559

On your list, numbers 1,3,4, and 5 are dependant on 2 happening. Sustainable economic development, in turn, is dependant on the growth of the export-oriented private sector. And that, in turn, is dependant on the U.S. consumer (every toy I've bought for my 5 and 7-year-old children, for years, has been made in China). And current consumption levels in the U.S. are only possible with ever-increasing levels of debt (see the unsavings rate). This is an obviously unsustainable trend. So at some indefinite point in the short-to-medium term future, things will get abruptly very bad in China. Can the Chinese government survive, if U.S. consumers stop buying Made-In-China toys, in the abrupt way that U.S. corporations have stopped buying Cisco routers? Cisco wrote off a year's worth of excess inventory. I doubt China can "write off" a hundred million or so excess workers.

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