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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (55002)	3/1/2006 7:48:37 PM
From: Mike da bear	Respond to of 110194

RE: "Chinese stealing of key potential exports of the US: software, movies, music, and other intellectual property" Whoa... will be fun watching the China apologist attack this one :)

To: KyrosL who wrote (55002)	3/1/2006 7:52:11 PM
From: UncleBigs	Read Replies (1) \| Respond to of 110194

As for China's productivity, China's present GDP per capita on a purchasing power parity basis is one seventh that of the US Let's analyze the gdp of America. When a mortgage broker convinces a person take on a 100% pay option arm mortgage to buy a $500,000 house and pockets a $15,000 commission, is this really "gdp"? Then that mortgage broker goes out and spends his income on dinners, fancy vacations, and salon treatments for the wife. Is this really gdp? When the U.S. economy adjusts to a sustainable equilibrium, we will see huge chunks of "gdp" evaporate out of thin air. Then we will really see how productive the U.S. economy is.

To: KyrosL who wrote (55002)	3/1/2006 9:25:44 PM
From: I_C_Deadpeople	Read Replies (1) \| Respond to of 110194

"While I agree with you that the US is due for a severe recession in the not too distant future to correct its huge imbalances, I think future prospects for the US are fairly bright, compared to those of China, because I believe that US politicians will acquire a bit more spine relatively soon. The US simply needs to adopt policies that strongly encourage savings and discourage excessive consumption, particularly energy consumption. Say, a VAT and a hefty gasoline tax, like in the EU, accompanied by corresponding tax reductions elsewhere, unlike the EU." Counting on politicians to have more spine or do the right thing or plan correctly for the future is indeed a fool's wish. As has been discussed on this board ad nauseam, the problem for the US is that there is just not one area they need to correct - they have trade deficits, budget deficits, unrecorded future SS and health care costs, huge personal and government debt levels, etc. Not to mention dependency on foreign energy. Adding a VAT tax and reducing other taxes does nothing. If they 'encourage' savings they will implode the economy. If they discourage consumption of anything they will implode the economy. What you have is a country living off credit and BELIEVING that it is a God given right to continue to live that way. What you are saying is that the American public will willingly accept they they are no longer the greatest nation in the world, willingly accept the fact they cannot continue to afford their lifestyle. That will likely eventually happen, but it will not happen willingly.

To: KyrosL who wrote (55002)	3/2/2006 1:22:03 PM
From: GST	Respond to of 110194

Hi K <The US simply needs to adopt policies that strongly encourage savings and discourage excessive consumption, particularly energy consumption. Say, a VAT and a hefty gasoline tax, like in the EU, accompanied by corresponding tax reductions elsewhere, unlike the EU. Hopefully, the coming recession will wake up the politicians so they take such action.> We could debate the usefulness of this approach -- but this has the same chance as a cellophane cat in hell of surviving the special-interest-money-politics of the US political process. <China's present GDP per capita on a purchasing power parity basis> This is a meaningless number. The vast majority of Chinese today live in the dirt poor world of an agrarian society supplemented by inefficient state enterprise. The efficient parts of the economy on the other hand are rapidly gaining world class status. Of course at this point that is only about 200 million people. This sector is rapidly growing and will double in the next ten years -- based on demographics and the Chinese system of education -- still a mere 400 million out of 1.3 billion. But at 400 million China will exceed the educated productive workforce of Europe and the US combined. <China's huge savings are mostly generated by a relatively small elite at the top, which enjoys a huge income inequality compared to the masses at the bottom. Most of Chinese savings are the savings of this small percentage of the population at the top of the pyramid> The national savings rate -- taking ALL Chinese into account -- runs at about 45% of income. Yes there are extremely rich and extremely poor. The middle class is about 100 million -- a tiny fraction of the population. But ask yourself this: How many middle class Americans are there today? 100 million? And in China the middle class is rapidly growing and will soon easily outnumber the US. <rampant Chinese stealing of key potential exports of the US> Chinese exports do not reflect "rampant stealing". Chinese exports represent US companies selling products to Americans from their factories in China. When you buy a Motorola phone, it comes from China. Same goes for most of what you buy at Walmart, or Macy's or home depot - etc. etc. etc. Finding something not made in China is harder than finding something made in China. China is not inherently better than the US -- they are simply making good decisions to secure their future while we squander what we have and mortgage our future to them.