The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: 10K a day who wrote (28420)	3/20/2005 2:43:18 PM
From: GraceZ	Read Replies (1) of 306849

Thats not a fair comparison. I can buy dinner for 4 with drinks and appetizers for 7 dollars in asia. In california it would cost me 150 bucks with tip.... And I can buy dinner and drinks for four up at the Emerald Garden in Shrewsbury, PA for $35 but I wouldn't make the mistake of thinking I was buying the same dinner as your California one @ $150. Economic fallacy number six in Thomas Sowell's Basic Economics to think that two things with different prices are actually the "same". Besides I implied what you claimed when I suggested that you not believe that China's GDP and CA gross state product are worth the same, even though, in dollars they are roughly equal. Back to Asia, what part of Asia? Certainly you weren't referring to Japan. Plus, what could you buy equivalently with the wherewithal in that part of Asia where you could buy this meal. "Wherewithal" means the modicum of income, i.e. the amount of income denoted in the local currency you get from your labor or skill in an Asian country. I think you'd find that the meal costs the same in wherewithal. It's foolish to think China will not rapidly close the gap in many ways... China is coming on strong, I have no doubt, but do the math in terms of GDP per capita. Apply a mediocre rate to US growth, say 2% real growth, equal to the long run rate of productivity in the US. Apply a fantastic rate to China, like 8% real and then tell me in how many years they will have the same per capita GDP we have if their currency remains pegged to the dollar?

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