March 5, 2013 at 12:03 pm #17643
Chris has warned that the Chinese property bubble could be the “biggest in history.” Others claim that central planners have the situation under control. What do you think? Is this something members should be concerned about?March 5, 2013 at 4:06 pm #27027
The US buys about $600 billion of stuff from China a year. China in turn buys stuff from the EU (that’s Germany), like transport systems and elevators for their new towns, and lots of cement and copper. When the US stops buying because the public is short of cash or credit, China takes a hit … and then Germany takes a hit. It seems like the US buyers are slowing down. Bankers bonuses for a few does not make a big market for Chinese goods.
So what if we stop buying?
Well, what will the central planners do with all those workers who were supplying goods to the US, and a bit to Europe? Sell to Africa? Not likely. Without jobs, the workers can not buy expensive condos in new cities. With no jobs and no place to put all the stuff the workers might like to buy, the central planners have a problem on their hands. From most accounts, there is a surplus of housing. The planners better like their properties because they may own them for a long time.
Modern economists think that creating demand is the front end of an economy. What better than to push people into breeding boxes (houses) where they can store stuff they buy? What modern economists have not worked out is that there is not enough cheap energy for such a huge population to live like middle class Americans with suburban lawns, traffic jams and imported stuff. They can not afford it.
Yes, the Chinese property bubble is a problem. The unfulfilled raised expectations of a lot of people has a habit of turning ugly. The central planners have a Magilla on their hands and we need to avoid ruin because of what they have done. This is a global problem.
Everything seems so calm … except for the politicians everywhere. They look anxious.April 3, 2013 at 2:40 pm #18046
Let’s just remember the basics of history: Central Planning has never worked. Nothing has changed to justify a belief that it will work. “Downsized versions” of it are now failing in Europe & the States; hence, why should a “steroid charged” version of it work in China?
Moreover, those who run it will not admit it has failed, until it has COMPLETELY failed, and they are driven out of power.
You must be logged in to reply to this topic.