Wednesday, January 19, 2011

A Risk in China

China's Lack of Growth Drivers Is a Bigger Risk Than Inflation

It's a good read. Here's a teaser.

My guess is that if you see a significant slowdown of Chinese economic growth, that will hurt the non-food commodities market a great deal. A lot of the commodities’ prices are held up by Chinese stockpiling and Chinese investment-led growth. I don’t think it will have such a negative effect on food commodity prices. It depends on how the rebalancing takes place in China.

Here's one of the more amusing quotes.

Japanese workers are eight to ten times more productive and expensive than Chinese, and to compare the levels of infrastructure just doesn’t make sense. It’s like saying, “Let’s go to Haiti and build a supersonic flight transportation from one end of the island to the other.”

And here's one more for good measure.

You seem far more optimistic about America’s ability to get its act together.

Deep down I guess I am too or I wouldn't have nearly my entire nest egg in inflation protected US debt. We could very well be the best of the worst.

If you look at the US in 1929, 1930 and 1931, it was a period when American arrogance was simply out of control. They believed that since they were a high savings, surplus country, they were in the catbird seat.

Jim Rogers moved to Asia in 2007 so he could be in the catbird seat. Right?

This article was offered by Coba in the comments. His comment got stuck in Blogger's SPAM filter but I finally noticed it. D'oh!


Stagflationary Mark said...

For those interested, I have added Credit Bubble Stocks to my blog list.

I loved the sarcastic tone to the blog's heckle of Apple.

All-in On Apple (AAPL)

Wow. Why does anyone think they have an edge owning AAPL? What do you know that four thousand other mutual funds don't?

G.H. said...

Eye on China: China Unveils Global Warming Plan

"...industry is currently so inefficient that China uses seven times as much energy as Japan for each dollar of GDP."

'nuf said.

That article was written a few weeks ago. I think the world knows by now that China has a plan to warm the world.

GawainsGhost said...

American exceptionalism. A lot of people hate that term, because their minds are infested with relativism, but it's a real thing.

What made America great was the middle class. You know, the guys and girls who simply go to work every day, earn a modest income, don't aspire to grandeur, just do their jobs.

Read Chaucer's The Merchant's Tale. It's about an aristocrat who wastes all his money and inheritance on fancy clothes and extravagant parties, only to have to borrow money from the comman man, the merchant, who manages his estate. That's the real story of America, the rise of the middle class.

Something happened over the last couple of decades though, corporatism. It's these guys, obsessed with their titles, salaries and bonuses, who exported our manufacturing base and imported low-skill labor, thus destroying the middle class. Soon they will go the way of all things and wind up broke.

In the end, the middle class will rise again, as it does when all other options have expired. The American "can-do" spirit cannot be extinguished, not amongst the people who understand the value of work.

Stagflationary Mark said...


"...industry is currently so inefficient that China uses seven times as much energy as Japan for each dollar of GDP."

Our ultimate goal was to get all of our GDP into the banking sector so that the only energy we'd need for each dollar of GDP would be in the form of fluorescent lighting! We sure blew that one. We're trying again though so there is still hope! D'oh!

Stagflationary Mark said...


Something happened over the last couple of decades though, corporatism.

To back your point, I really do think our problems began around 1990 (two decades ago). That's when we first started embracing the cumulative trade deficit. In inflation adjusted dollars, we've let it grow to roughly $10 trillion.