China is getting alot of bad karma...we have seen nothing yet. Most of the people in China are still quite poor. The younger generation does not respect elders...watch out if the economic tide turns...which is inevitable.
You have said before that the United States was on a path to "Brazilification". The last 8 years under Bush and his cronies have accelerated the transformation. When and in which American city is the next riot like the 1992 one in Los Angeles going to occur?
Oh yes! And the Chinese leaders are afraid of this. Only the eastern third of the country has a raised standard of living. They've had to enact laws to keep everyone from moving to the big cities, but its happening at a pace of 10 million per year anyway. There is still extreme poverty in the west, and roughly 100 million people are malnourished (discussed in a thread about a year ago). China is very paranoid about unequal wealth distribution and what could happen. They say at current rates of growth, China passes the US in 25 years. I say the place implodes first. India is the one that looks good long term.
Some Fed bosses do what they believe is right without regard to what others want them to do. Volcker for example. Other Fed bosses base all or part of their policies on what Wall Street or the Federal government want them to do. Greenspan for example. We have yet to see which camp Bernanke is in. But it is clear that Greenspan was heavily influenced by Wall Street and the Federal government. Whether or not the Fed is truly independent depends entirely upon who is running it.
From what I studied in college during previous years, there is a somewhat academic consensus that the communism system will eventually be unable to sustain economic growth in China. Another interesting observation about China, is that their growth numbers are generally exaggerated. The provinces and counties dilute the real numbers in order to impress the central power and make sure that they recieve some funding. Corruption is not uncommon of this nature throughout the third world, but we should also remember that corruption is always rampant in any communist socities. Do any of you guys remember the histories books telling us that in the 1950s, while the Soviet Union was still under Stalin, how successful their economy was? I see the situation with China as very similar. I therefore have more optimism in countries such as India and Brazil. Their education systems are also superior (on a wide scale).
I strongly disagree. China is focused right now on building out its energy and transportation infrastructure - both necessary to sustaining the world's largest manufacturing base. They know exactly what they're doing. They're sacrificing short term (and terrible) pollution in their quest to irreversibly entrench their country as the world's factory - and it's working. India has a sliver of a fraction of China's manufacturing and distribution might because they have yet to seriously take on such a massive endeavor.
China isn't even close to the communist model any longer. Lots of very wealthy people there, and income distribution is extremely unequal. If they were a true Marxist economy, as they once were, they wouldn't be growing at all. They do still control the populace and tell then where to live, etc., but economically, they are closer to capitalism than communism. It is true, communism doesn't work. Look at the true Marxist states, N Korea and Cuba. Mess. The USSR never had a successful economy under Stalin. It was always a house of cards, with lots of people starving so they could build missiles.
China's economic system is certainly more capitalist, but their political system is still communist/authoratarian. That's the problem, the government's authority may ultimately impede economic growth. (Just like Jayford's example that the USSR wanted to build missiles instead of feeding its citizens). Also, America did percieve the USSR as a prosperous nation during the early 1950s. That comment related to my arguement that communist countries dilute the economic statistics to look like they are very successful. The case in China slightly varies because their economy is capitalist and we can see all their goods imported into America and elsewhere. What is important, however, is that their statistics may still be exagerrated. I'm not saying they neccasarily are, but this has been already exposed in the provinces. Corrpution also goes hand to hand with any communist system.
Not sure how much they distort facts, but their banks are definitely a mess. Supposedly, just about all of them would be insolvent without constant government infusions. lots of very inefficient biz there still, which is propped up to employ people. definitely generating some impressive cash flow however.