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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: UncleBigs who wrote (54988)3/1/2006 5:59:49 PM
From: GST  Read Replies (2) of 110194
 
<China is growing because they are producing for the U.S.>

China is growing -- period. They are indeed producing for us, and unless we are thrown back into the stone age they will be producing for us through any protected economic setback on our side. In fact, as we go broke, we will need their lower production costs even more tomorrow than we do today. And as our deficits swell in a recession we will certainly need their savings. On this score we will suffer badly as their savings pool will shrink exactly at the moment when our need for their funds grows more dire.

Supply and demand are global. Eventually you will see that. In the global context, China is not merely growing as an export platform -- although it certainly plays that role as well. China is also growing as a mighty economy in its own right and for its own people -- productive people who work hard and refuse to spend more than they earn -- what a concept. You perpetuate the myth that we are financially strong and they are dependent on us. In reality, they are growing financially strong as we grow weaker by the day. What that means is that they will turn their talents and resources more and more to meeting their swelling needs. Prices will rise as our economy stalls -- that is the grim reality of living beyond our means in a global economy -- our standard of living is about to be repossessed.
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