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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: GST who wrote (49142)1/9/2006 1:07:57 AM
From: kris b  Read Replies (1) of 110194
 
"That would be 6% of Chinese GDP"

Which means that in 2006 GDP would grow by 4% (10-6) only. They need at least 8% growth per year to absorb the new entrants into the labour market.

"it would only take China 8 months at current growth rates to replace that 6%."

You are double counting. Your 8 months includes the 6% they are going to lose.

"Chinese consumption is the future of China -- not US consumption. They have been working and saving for going on 25 years and they are on the verge of reaping the benefits of that hard work and frugality"

Read "I was cheated" by redfrecknj to learn how they are going to squander 25 years of savings. This also shows you where the domestic consumption is. In empty concrete towers and all other RE linked industries. This "wealth" is going to evaporate as soon as the boom/mania is over. They will go back to earning $ US 100 per annum per capita as quickly as they can say "God help me". It will take generations after the depression to create real domestic demand, especially that everybody around the world (no export led recovery)is going to be broke as well. You will see competitive currency devaluations, competitive lowering of wages around the world, trade wars and armed conflicts (III WW?)over resources. NO WAY OUT. The only unknown is how soon.
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