by zeb 4 Replies latest social current
In October 2015 there will be a huge move likely to include China into the worlds "Reserve Currencies".
This is likely to see a run on the US dollar and trading that is done in US dollars.
I am not predicting gloom but it will impact on all of us and perhaps may be behind the obsession of the wt to stack up as much real estate and the green stuff as they can.
The Chinese have been buying US dollars over the past few month.
I doubt that they want to destroy the value of a US dollar, its in their own interests for the US dollar to remain stable.
What they are after is to be able to circumvent the commissions payable, when you buy a foreign currency to pay a contracted bill. The USA, in having the US dollar as the key currency in trade, got a free ride every time money changed hands. That's what's likely to come to an end, which of course will rob the USA's government of a source of income.
Is debt always a problem? To answer my own question, I'll say, "that it depends," with the biggest factor being one's ability to repay. The world would look very different if no-one had ever borrowed money to do something.
So do the Chinese have a debt problem? Consider, perhaps first of all we should remember that we are talking about more than 20% of all humans on the earth. The second thing to consider I suggest, is the point made by the speaker in the attached video, that the Chinese (mainly) finance their own projects. The third thing, is that the money has in most cases been spent on infrastructure projects. Since commencing to build VFT (Very fast trains -i.e. trains running at up to 350 km/hr) in 2008, they now have more than 16,000 km of VFT rail track and project 20,000 km by 2020. Even now, they have more VFT track than the combined total of the remainder of the world. In addition a network of highways has expanded across China, with time cutting bridges and super ports to handle their exports. Hence most of the money spent on these projects generates income that pays for the borrowings.
Don't think I need add more than that: but listen to this Singaporean money guy discuss this so-called problem.
http://www.cnbc.com/2014/07/21/chinas-debt-to-gdp-ratio-breaks-250-of-gdp.html
Since that person comes from Singapore, a small but very prosperous nation, that is Chinese in origin and a prototype for what is happening in the PRC, let me make another point.
Sterling Seagrave in his 1995 book, 'Lords of the Rim,' made the point that 'overseas Chinese' (People of Chinese origin living in Pacific Rim countries) were then the third largest investment/wealth group (with Japan second, and the USA first) in the world. (Not sure where the OS Chinese stand now, but I imagine they are not poorer.)
Like the Chinese government, the government of Singapore owns through its own investment company a wide range of investments. It is an active shareholder and investor, and its portfolio covers a broad spectrum of sectors including financial services, telecommunications, media and technology, transportation and industrial, life sciences, consumer, real estate, as well as energy and resources.
