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How Will Their Relationship Shape the Future World Economy?
with Carlos Alegría, PhD and Edward Dowd
“China will almost certainly try to push as much of [its huge and growing debt burden] as possible onto its trade partners. It has every incentive to maintain the largest possible trade surplus for as long as it can, allowing excess production to be absorbed abroad rather than forcing a sharp contraction in domestic production and employment.”
Carlos Alegría and Edward Dowd of Phinance Technologies consider the U.S. export of inflation and China’s potentially deflationary manufacturing export juggernaut.
I had to laugh, european countries will have to choose! Hmm, choose between cholera or the plague. Propably live in the one that will get me stuck with the USA.
Not that I trust China, but I really don’t trust mammon country.
This presentation is very thought provoking with so much information and quality analysis. Thanks! We’re opposing two data centers in SW Missouri. Some information has come out that the county is open to issuing Missouri Chapter 100 bonds where the county buys the real and personal property and leases it back to the company. Also a concern is whether the city will issue industrial revenue bonds. Is local government another capital source for this scam and who’s left holding the bag when the hyperscaler defaults?
The trade war is just a consumption tax and a revenue source for the US Treasury. Whereas other tax hikes would be hugely unpopular, Trump is able to make people cheer for 135% price increases. A masterful psy op.
The US needs China to be an imminent threat so that the trade war can be justified and that tariff revenue can keep flowing to the US Treasury.
What is the impact of a country going into debt by way of nation building – spending going into building great infrastructure, production capabilities – vs. social programs, tremendous corruption, private profits & bailouts? When the music stops, China and Japan will still have world class transport and a world leading manufacturing base.
One of the main differences between the US and Chinese housing markets is that in the US, despite all its problems, a house built here, even one poorly built, will likely stand for a century or far longer. But in China, there is no serious inspection or care for quality so most of this construction (and we are not speaking about ghost cities etc.). So these properties start degrading immediately and likely have a true lifespan of only 20 years, maybe less in some cases. So there is already replacements needed for buildings that were started at the beginning of the boom.
You also have the mortgage problem. A lot of families avoid mortgages because you cannot get out of them as there is no bankruptcy. In fact your children inherit your debts. None of this comes into play while the economy is booming; however, when you talk about recovery – the economy doesn’t. Why even work I you and any children you have will forever be a debt slave?
Thanks for a great discussion. I have an issue with “productivity”.
There’s GDP and leaving aside the problems with that. Smilarly with employment numbers.
So that’s GDP per capita.
Now, correct for inflation? How does that work?
And great discussion on AI. Clown world.
I had to laugh, european countries will have to choose! Hmm, choose between cholera or the plague. Propably live in the one that will get me stuck with the USA.
Not that I trust China, but I really don’t trust mammon country.
This presentation is very thought provoking with so much information and quality analysis. Thanks! We’re opposing two data centers in SW Missouri. Some information has come out that the county is open to issuing Missouri Chapter 100 bonds where the county buys the real and personal property and leases it back to the company. Also a concern is whether the city will issue industrial revenue bonds. Is local government another capital source for this scam and who’s left holding the bag when the hyperscaler defaults?
Strongly recommend Susan Luschas’s new piece as well as Tim’s new article
https://luschasforsd.net/news/data-centers-what-do-we-need-all-this-data-for-a-mathematical-analysis
https://solari.com/taking-control-of-your-investments-a-primer-for-u-s-investors-who-do-not-want-to-finance-the-digital-control-grid/
Got to move the money
Thanks!
The trade war is just a consumption tax and a revenue source for the US Treasury. Whereas other tax hikes would be hugely unpopular, Trump is able to make people cheer for 135% price increases. A masterful psy op.
The US needs China to be an imminent threat so that the trade war can be justified and that tariff revenue can keep flowing to the US Treasury.
Yup.
What is the impact of a country going into debt by way of nation building – spending going into building great infrastructure, production capabilities – vs. social programs, tremendous corruption, private profits & bailouts? When the music stops, China and Japan will still have world class transport and a world leading manufacturing base.
Yes. The important things about debt financed investment is whether it has a positive return – it creates the value necessary to retire the debt.
Thank you ! I’m always learning and wish I had subscribed sooner.
One of the main differences between the US and Chinese housing markets is that in the US, despite all its problems, a house built here, even one poorly built, will likely stand for a century or far longer. But in China, there is no serious inspection or care for quality so most of this construction (and we are not speaking about ghost cities etc.). So these properties start degrading immediately and likely have a true lifespan of only 20 years, maybe less in some cases. So there is already replacements needed for buildings that were started at the beginning of the boom.
You also have the mortgage problem. A lot of families avoid mortgages because you cannot get out of them as there is no bankruptcy. In fact your children inherit your debts. None of this comes into play while the economy is booming; however, when you talk about recovery – the economy doesn’t. Why even work I you and any children you have will forever be a debt slave?
Jonathan:
In China, children are only liable up to the estates ability to pay the debt – same as the US
https://www.chinajusticeobserver.com/a/what-is-the-law-of-inheritance-in-china
Thanks for a great discussion. I have an issue with “productivity”.
There’s GDP and leaving aside the problems with that. Smilarly with employment numbers.
So that’s GDP per capita.
Now, correct for inflation? How does that work?
And great discussion on AI. Clown world.