I have a feeling China is itself running into trouble. Rising commodities with stagnant wages is not a good sign. One of my volunteer colleagues who recently flew to Shanghai for a trade show had conversations and discussions with expats in the area, where they expressed that many of those big buildings (not sure what type, maybe both business towers and apartment complexes?) are empty, and built there just for show. So I do support the idea that China might run itself into debt one day, because of the chain reaction of its workers not being able to stay fed, therefore dropping off in production, less exports of material goods, less revenue... bam.
if US ever learn from their mistakes they wouldnt be US. they like to continue making the same mistakes over and over again
wow... there's quite a bit of bull shit to wade through... 1) US Debt is GOOD, for US anyways... think about it... there's a reason why the Dollar = World Currency, not because of it's worth, but because there's so much of it out there and because the US will NEVER default(The US owns the goddamn presses)... That makes US Treasury Bonds a SAFE, virtually RISK FREE investment... If the US paid off it's debt in it's entirety, there would be NO TREASURY BONDS... in which case, that would mean no one is holding US Dollars... LITERALLY... 2) The US doesn't have a cash flow problem, the US prints it's own money, and continues to loan because the US is the world currency... 3) China will NOT go into debt, it controls it's own currency, pegs it however it wishes, how the hell would it go into debt? 4) China is a pretty open market system with some exceptions of course... there is free enterprise everywhere... there wouldn't be investment in the country otherwise... you think ppl invest in the Chinese government? psh... what fail thinking is that? People need to realize, if there is no debt there is no money, if there is no money, ppl can't invest and therefore can't generate any ROI cuz they can't invest... derp... As an example, what if everyone in the US stopped spending and instead spent wisely, frugally and tried to pay off ALL of their debt? The economy will go down the shitter because no one is spending money, there wouldn't be a need for Applebees, Starbucks, Forever 21, Best Buy, Ford, new housing, etc... jobs would disappear, economy will become stagnant and eventually go negative... a la depression mode... on a side not, FDR's New Deal was pointless spending that did nothing but extend the depression... instead of making the money available for people to borrow and generate new businesses and new jobs, he spent it on government projects that promoted unskilled labour... the US was in another recession by 1937, right before the war took off during the new deal... furthemore the war helped the economy recover based on need of INVESTMENT of new production, also it helped later when the war was over by essentially doubling the work force since women now started working... what ultimately propelled the US out of the depression and into economic boom is the fact that war torn Europe had to depend on US production of goods... and the US had all their factories pumping bullets and tanks turned into factories pumping sowing machines, tvs, fridges, toasters, etc... and now you had double the work force to further capitalize on the demand... and guess what? with demand comes opportunity for INVESTMENT... what does investment need? MONEY... how do we get money? DEBT... derp... People also need to realize that China isn't BAILING the US out everytime it buys Dollars, China is also bailing itself out from future catastrophe... NO ONE buys Chinese currency... in fact China FORCES exporters to buy Chinese currency once they sell in dollars... the problem with the Chinese economy is that IT MUST grow continuously at about 8-10% in order to sustain itself because no one buys the damn currency and therefore relies on surplus' to sustain itself and keep US Dollars as an insurance policy... China can't buy shit with renmenbi, they have to convert it to dollars to buy anything same as the rest of the world... the problem the US is facing now is indeed overspending, but it's overspending in the wrong area... instead of simply dropping interest rates to create new businesses for new jobs with federal reserve injections and tax returns, we have billions in the war and "rebuilding" Afghanistan as well... that's why our debt ceiling is shooting through the damn roof instead of a steady increase...
The critical point is not whether US will learn as bankers and businessmen dictate what happens in a free market economy. The symptoms are resullts of the fundamental behaviour of "self" + capitalism and the race to control as many assets (capital) as possible. In effect the indebtedness of the majority enables the relatively "few" to "hide" the money in offshore "tax free" locations set up by the old orders in the empire periods. The staggering amount of debt worldwide is balanced by the staggering amount of wealth locked in Switzerland, Monaco, Liechtenstein, Bahamas, Turks and Caicos, British Virgin Islans etc.. In farming terms the money lenders' and business people's prime aim is to devise schemes, systems and promote excess consumption to make as many people in debt as possible. The reason is that each person in debt produces an "interest" yield to a third party. The people become "cash" crops. The last thing that they want is each person to spend exactly as much as he/she can afford (living within one's means(=) or worse still ... make savings! When more and more people become heavy in debt the national governments are also in debt... the lenders are meeting their objective of ...the borrower in heavy debt will pay interest forever with little ability to pay off the capital. However the few with assets and with lots of money will get richer in this process. This is the utopia to the lender and investor as by holding ever increasing amount of capital and cash the debtor will labour in a lifetime not only for his own good but also for a third party.. .this is elegant and made possible by tax havens (try wiki to see where they are). If these tax havens did not exist a state of equilibrium would reach in the world as capital and cash would "flow" back into the countries and be more "accessible" by the taxation regimes and be invested in business enterprises for the betterment of the general populace. In simple terms the "free" market system in the absence of government regulation with a social conscience and in the absence of business responsibility to the community will always result in an increasing burden of debt. In this way US and other countries "will" never learn as big businessmen have a huge influence on the democratic process and they have their vested interests. But it is business too who create wealth and jobs too. This is the irony.
Who cares. In ten years, China will no longer be "on top". In fact, Eastern Europe will be. Ups and downs. The way of the world.
