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

To: skinowski who wrote (108855)	6/23/2010 3:05:56 PM
From: Elroy Jetson	1 Recommendation Respond to of 110194

If the world and China are to experience price and wage deflation, the workers in China can earn more by earning the same as prices fall. But this wipes out the value of collateral for loans held by the banking system. And it's here that China is vulnerable to deflation just as our banking system is. Regardless of how you look at it, the process of China becoming its own best customer is not going to be a smooth ride. But China's leaders have previously dealt with Tiananmen Squares and other public discontent. They can always resort to the model of the "Great Leap Forward" and force city dwellers and the educated to work on farms as laborers and other Orwellian "reeducation" models. .

To: skinowski who wrote (108855)	6/23/2010 3:07:22 PM
From: GST	1 Recommendation Read Replies (1) \| Respond to of 110194

The supply of cheap labor in China is not what it seems. Years ago, China had already come to realize that the cheap labor model would soon fall apart. Moving people around as they have is not sustainable. More development will push up the Pearl Delta and farther inland -- this is already well established as a trend. While this is going on, wages will move up sharply in the more developed coastal regions. China's demand for everything under the sun is skyrocketing -- and there is no end in sight for decades.