Economic Crisis

[jpantalleresco]

Forewarning: This is a political/economical blog. Someone may even label this conspiracy. That said, I suggest reading it entirely before jumping to conclusions. Or if you don't even want to take the risk, skip this blog

Comments

[jpantalleresco]

I said strongest, not greatest. They manufacture and produce almost everything, and when you get right down to it, that's the true measurement of wealth. They ran a trade surplus of over 40 billion dollars at the end of 2008, long after the commodity bubble burst in the world.

Walmart was one of the few companies that have made money in the shrinking economy. Over 70% of their goods come from china. While China's exports did slow last year, they did not stop. Consumers were still spending money, even if just downgrading to the cheap knockoffs china makes over the chanels, diors, and what have yous. China makes cheap commodities, which have maintained their strength in the world, as most people will buy them in tough times to insure their way of life continues. They are much stronger than credited and considering their percentage of the treasury, a large reason the US can print the money they do right now.

The reason China has such a gap in their social infrastructure is in large part due to their constant controls against inflation, largely due to the US Dollar. China would love deflation in their market; it would allow them a chance to afford to catch up in the areas you've mentioned. As is however, China has removed a lot of its controls against inflation, which is one of the reasons the US is in trouble right now. Inflation is the one area that would force china to stop worrying about the US dollar. Their food and soy consumption in particular right now, is worrisome in this regard.

To see their bank reports

see this:

http://in.reuters.com/article/asiaCompanyAndMarkets/idINPEK924120090106

and this:

http://www.financeasia.com/News/132417,chinas-banks-to-absorb-shocks-in-2009-says-sp.aspx

They have already started to take steps to distance themselves from the US currency, challenging the dollar outright in things like this:

http://online.wsj.com/article/SB123780272456212885.html

My favorite line in this is how it's admitted that china is one of the major lenders to the US. Which makes sense since they own almost a third of the US treasury bonds.

That does not mean however that the wealth in china is anything close to fair or balanced. Nor does this have anything to do with quality of life. There is a much better social safety net in Canada than the states in a lot of ways, and the gap between rich and poor is much broader in the states by a shot in comparison. Yet the states is far wealthier overall.

Greatest? No.

Strongest? If you go by creation of wealth and manufacturing, their trade surpluses and the strength of their banking system, I don't know if there is anyone else close right now.

JP