They are trying to control interest rates and the exchange rate at the sametime and that is impossible.
China is the trunk and roots. Taiwan and NZ are it's branches. When China "pops", US and the rest of world markets will get decimated. Over 40% of S&P500 earnings are from asia. Get a clue, and stop watching CNBC.
Why would it pop? I would expect the opposite. They will come shopping to the US and will support struggling US consumer.
Um or there may be no depression or if there is one it wil be in the distant future long after index crosses 10000
Did you mean support the US economy by ming up for the declining ability of the US consumer to do so? I don't know how China buying suff in the US is going to help the US consumer.
True. But China won't pop until the US Fed says so. Or, in an unlikely scenario - when PRC bankers pull the plug on rates. #2 won't happen because China has no precedent that would sacrifice growth for a strong yuan. They're playing catch up, remember. Of course, when it plays out, the Fed will cue Chinese labor and output costs as the 'signal' for restricting US credit. When and if that comes about - and it very well may not (Bernacke may hyper-inflate) - it'll be impossible to tell who threw the first punch. Both markets will crash in tandem.
I don't believe the numbers. China's GDP is only about $3 Trillion. That's a fourth or fifth of the US. John
This kind of reply makes me seriously impatient. I despise the OP with a passion. I think he/she/it is an ignorant ass. However, the above is equally ignorant. You're quoting GDP at exchange rate equivalence, which in the case of China is just plain stupid. At PPP (Purchasing Power Parity, for the unwashed) China's GDP comes in at - drum rolls puhleeze - 10.21 trillion, not too far behind the US, and comfortably ahead of Japan, allegedly the second largest economy on the planet. Which is, to put it politely, pure, unadulterated bullshit. Source: <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html">The CIA World Factbook</a>. Use it. These bastids do know what they're doing. If Dubya had half the brain of the GEICO gecko, he would've let them finish Bin Laden. But that's another story entirely.
The Chinese middle class, wage growth, consumer spending is rising too fast. There is no doubt about this. At some point, China will be forced to limit export of it's fabricated goods to sustain it's own consumption rates. The effect is twofold. US, in "the decade of hyperinflation" with rates over 10% will in turn revert back to becoming a manufacturing nation and besides having to manufacture for itself, will export goods to China, and then finally adopting the true strong dollar policiy (by then called the Amero) many years from the big dollar fallout of '09. "Cheap American Goods" paradigm shift is happening NOW. This will be further made possible by the new working class which came from massive bankruptcy and 10's of millions of foreclosures. You are witnesing the construction of our peon working class right NOW. 1) Illegal immigrants, population growth will be exponential reaching the 100 million mark by 2018 and 2) Indebted labor will rise from the ashes of the greatest credit bust in US history. People will literally be working just for food, water and shelter. Look around you. Don't deny that you don't see all those Mexicans working for scraps. CNBC doesn't want you to know that you live half a mile away from basically impoverished slaves. Close your eyes why don't you. Thousands upon thousands of factories will be built out of these people to fab goods at low cost. We'll get what everyone wants.. The return of...... "MADE IN THE USA"