Financial Armageddon!!

[Wayne]

At the end of the day, there are 1.5 billion people in China, that itself is the foundation for decent economy for centuries to come.

Even if there is a huge gender imbalance and that in the near future they will struggle to care for the rapidly increasing numbers of elderly with a reducing working population?

[ivanp]

Saying that "the whole Chinese economy is a house of cards" just shows one's lack of knowledge of history...

China was the world's largest economy for the last two thousand years, right up to the industrial revolution in UK and the rest of Europe. China is just to big to fail.

[PTILoveYou]

Even if there is a huge gender imbalance and that in the near future they will struggle to care for the rapidly increasing numbers of elderly with a reducing working population?

What people don't understand in the West, is that population figures in China is often massively under reported, especially in the rural areas outside main cities.

Many people in the 2nd or 3rd tier cities and especially the villages will go out of their way to have more children.

When I was in primary school in China, approximately 1/4 of the class pupils were 2nd or 3rd child.

Japan I would more worry about population problems.

China? Well they could do away with 1 billion less people really.

[Wayne]

Saying that "the whole Chinese economy is a house of cards" just shows one's lack of knowledge of history...

China was the world's largest economy for the last two thousand years, right up to the industrial revolution in UK and the rest of Europe. China is just to big to fail.

Was it being suggested that the whole economy totally fail?
They are, so far, managing the issues but that doesn't mean they will be able to forever.
When they hiccup, it will look like a disaster to us.
The old saying - when the USA sneezes the rest of the world catches a cold.
Well when China sneezes we will get the flu.

[Davo36]

Saying that "the whole Chinese economy is a house of cards" just shows one's lack of knowledge of history...

China was the world's largest economy for the last two thousand years, right up to the industrial revolution in UK and the rest of Europe. China is just to big to fail.

That's just a stupid reply.

Were they running a capitalist system for ANY of that 2000 years? No? Then they mean nothing.

And to say they're too big to fail makes no sense either. The size of their population has nothing to do with it.

The US has 300 million people but had a very serious property correction. Are you saying if they were bigger it wouldn't have happened?

Whether it's 3 million or 3 billion, it's the same maths, you just add a zero (or not).

[elguapo]

Saying that "the whole Chinese economy is a house of cards" just shows one's lack of knowledge of history...

China was the world's largest economy for the last two thousand years, right up to the industrial revolution in UK and the rest of Europe. China is just to big to fail.

err....China was the worlds largest economy prior to the industrial revolution simply because it had by far the largest population and when everyone was roughly as poor as each other that's what makes the difference. That did not stop China spending huge periods of time as a basket case of revolution and instability either, not to mention mass famine etc. China is a house of cards that regularly falls over and has been for 2000 years, that's a large part of why the Chinese are so keen to get their money out!

[chrisgoh]

The First Paper Money

The First Paper Money
Paper bills were first used by the Chinese, who started carrying folding money during the Tang Dynasty (A.D. 618-907) — mostly in the form of privately issued bills of credit or exchange notes — and used it for more than 500 years before the practice began to catch on in Europe in the 17th century. While it took another century or two for paper money to spread to the rest of the world, China was already going through a fairly advanced financial crisis: the production of paper notes had grown until their value plummeted, prompting inflation to soar. As a result, China eliminated paper money entirely in 1455 and wouldn't adopt it again for several hundred years. Another not-so-well-known fact: the word cash was originally used to describe the type of round bronze coins with square holes commonly used in the Tang Dynasty, called kai-yuans.

(Source: TIME)

[Wayne]

China had an advanced culture while Europeans were still trying really hard to eliminate each other.
Then, somehow, they lost their way and managed to enter their own dark ages with the cultural revolution et al.
I still wonder how they could have gone backwards so fast, but they did.
And now they play catchup.
I think for such a large economy they have done well to get where they are now so fast - well managed for the most part.
But making the changes they are making is a fine balancing act and it wouldn't take a lot for a wobble to cause an implosion.
Being large just means the implosion would be big rather than can't happen.

[Davo36]

I still wonder how they could have gone backwards so fast, but they did.

I always thought it was because of their leader's decisions to block access to the outside world. They deliberately decided to stop any foreign 'contamination' of ideas etc.

Probably done as a way to keep control over the population.

Unfortunately, they're still doing it to some extent.

[eri]

european banks to be penalized further

for not lending money

IN JUNE of last year the European Central Bank reduced its benchmark interest rate, at which it lends to commercial banks, to 0.15%

and its deposit rate, which it pays to banks on their reserves, to -0.1%.

For a central bank that was once cautious about unconventional measures, setting a negative interest rate was a bold move.

The ECB was in effect charging commercial banks to hold their excess deposits at the central bank, in the hope that this would drive down borrowing costs more generally.

Three months later, the ECB cut the deposit rate again, to -0.2%.

When the ECB’s rate-setting council next meets, on December 3rd, it is widely expected to trim the deposit rate even further, as well as to approve more “quantitative easing” or QE (the creation of money to buy bonds).

In a recent speech Mr Draghi claimed that the ECB’s unconventional policies over the past 18 months had been the “dominant force” in spurring the euro-zone economy and staving off deflation.

Lending by banks is slowly reviving. Even so, he suggested, deficient inflation and lingering concerns about the strength of recovery justify further action.

The deposit rate in Denmark and in Switzerland is -0.75%. In Sweden it is -1.1%.

This week Alternative Bank Schweiz, a tiny Swiss outfit, said it would be forced to levy negative rates on personal accounts from January

http://www.economist.com/news/financ...can-go-bankers

[propertysearch]

Really?

"Growth was very strong in 2014, New Zealand was the fastest-growing [developed] economy in 2014 and that's why we labelled it as a bit of a rockstar," he said.

Most economists are anticipating annual gross domestic product growth in the region of 2 per cent this year, down from 3.3 per cent in 2014.

Bloxham told Fairfax that strong tourism figures - annual international arrivals broke through the 3 million mark recently - were bolstering this country's growth.

"What you're seeing is a shift towards tourism being a key driver of growth," he said.

.....

BUT

that almost halving of growth

will likely continue...

http://www.nzherald.co.nz/business/n...ectid=11533351

Never did anything much for Dunedin property prices.

[eri]

[Perry]

Chinese sharemarket will crash sometime this year...

Not many days of 2015 left, now.

[PTILoveYou]

Not many days of 2015 left, now.

Chinese sharemarket crashed in June if my memory serves me right.

[Perry]

I don't follow the share markets. As indicated earlier, I was bringing the
matter back to the fore to see how reality and the prediction related.