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Strategies & Market Trends : ahhaha's ahs

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To: Ahda who wrote (3616)	11/27/2001 8:19:11 PM
From: ahhaha	Read Replies (5) of 24758

Your words on Japan and China were words stated here several years ago in regards to our own situation and Japan reduced costs playing a very important part in the reduction of the American manufacturing end. I said Japan needed to change their economic configuration from a neo-mercantilistic orientation to an added value manufacturer and knowledge worker one. I also said that the Japanese don't have deflation, nor a banking crisis, nor do they have any of the invented problems which presumably should have destroyed them five years ago. They do have a huge quantity of money and very little debt, about 2% of assets. It's ten times worse here. So why is Japan doomed if we aren't? It is my belief that in the case of Japan Germany and all nations with a high wage scale that long range the gains in the over all economy will be limited. I feel that China due to lower wage scale and increased exposure to technology will be able to maintain growth. Think about this. The Chinese economy has grown because they practice neo-mercantilism too, but that approach makes them hostage to robust demand for their output from their trading partners. Their trading partners have built too much demand on debt and now that has to slow perhaps significantly. So Chinese growth must slow even though they're the at scale lost cost producer. The Chinese have other problems associated with any degree of a slowing of exports. Unlike the Japanese or the US the Chinese have little domestic demand infrastructure to buffer the effects of a drop in exports. So China gets hit with a recession that is leveraged to the downside relative to us. It's almost sure that in 2002 China will see significant negative growth perhaps on the level of 5%. Let's say this is true. So what? How can I make money with these conclusions?

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