China the biggest bubble ?

[ianp]

Came across this today ,

This bloke has predicted the last few bubbles.

http://www.theage.com.au/business/w...d-by-trade-spat-economist-20101210-18s7d.html

If China does produce 3 times more than it can consume it really needs the US and Europe to be buying a lot of goods..

 

[Bigtone]

Came across this today ,

This bloke has predicted the last few bubbles.

http://www.theage.com.au/business/w...d-by-trade-spat-economist-20101210-18s7d.html

If China does produce 3 times more than it can consume it really needs the US and Europe to be buying a lot of goods..

how many threads can we have on china bubble? one a day?

 

[csc2]

Came across this today ,

This bloke has predicted the last few bubbles.

http://www.theage.com.au/business/w...d-by-trade-spat-economist-20101210-18s7d.html

If China does produce 3 times more than it can consume it really needs the US and Europe to be buying a lot of goods..

all these blokes have odds on their side dont they...50-50 chance....not bad odds..

ill go out on a limb and say they wont for at least another 20 years...50-50 bet to.

so what if they do go backwards, australia has india to look forward to, the powerhouse of the next 50 years.....only wish i could live long enough to see that country really take off....massive stuff on the horizon.

 

[alexlee]

If China does produce 3 times more than it can consume it really needs the US and Europe to be buying a lot of goods..

Remember it's absolute numbers in international trade, not PPP. China's GDP is about 5T. the US 14T and Europe 15T. So for the US and Europe to buy 2/3 of its production, that's only about 10% of their GDP. Assuming 2/3 of the US and European economy is consumption, it's not that much of a stretch for them to buy 15% of that from China.

 

[devo76]

Its Xmas people.

Time for a xmas drinking game.
Grab a case of beer or a few bottles of wine.
Start at the top of this forum and start reading. Take a big gulp for everytime you read a few key words.

Bubble
Burst
Crash

If it originates from a new member then you drink the whole glass/bottle.

See how far you get

 

[Jonril]

Its Xmas people.

Time for a xmas drinking game.
Grab a case of beer or a few bottles of wine.
Start at the top of this forum and start reading. Take a big gulp for everytime you read a few key words.

Bubble
Burst
Crash

If it originates from a new member then you drink the whole glass/bottle.

See how far you get

Take a double swig if the post links to an article that has a "leading economist" predicting said bubble/burst/crash

 

[Bigtone]

Its Xmas people.

Time for a xmas drinking game.
Grab a case of beer or a few bottles of wine.
Start at the top of this forum and start reading. Take a big gulp for everytime you read a few key words.

Bubble
Burst
Crash

If it originates from a new member then you drink the whole glass/bottle.

See how far you get

i am drining johnny and dry but i am getting very drunk!

 

[bluestorm]

What I find amusing as well, is economists being "surprised" by the increasing Chinese inflation (and the government having to really try and control it now).
And the economists here in Australia (and Somersofters), who think China is not heading for some challenges and a slowdown in the near future.

China inflation rise fastest since July 2008, exceeds market forecast
http://www.theaustralian.com.au/bus...-market-forecast/story-e6frg916-1225969373556

Gee, that may tend to happen, when you massively increase the M1 money supply in China. Everything looks rosy for a while, then inflation starts to catch up with you.
A 50% growth in M1 money supply in 2years.
http://www.economicsjunkie.com/wp-content/uploads/2010/11/china-money-supply.png

What may happen longer term, it that this inflation will spread through the world (inflation = higher cost of labour), increasing inflation in other countries (cost of goods go up), but I think assets like property with fall (stagflation).

 

[HomePage]

Its Xmas people.

Time for a xmas drinking game.
Grab a case of beer or a few bottles of wine.
Start at the top of this forum and start reading. Take a big gulp for everytime you read a few key words.

Bubble
Burst
Crash

If it originates from a new member then you drink the whole glass/bottle.

See how far you get

Alternatively, do the same for the words:

Boom
Soft landing
It's different here
Property doubles every 7 years

If it originates from a long-term, high-post member.....you know the drill.

I reckon you'd get drunk quicker my way.

 

[devo76]

Alternatively, do the same for the words:

Boom
Soft landing
It's different here
Property doubles every 7 years

If it originates from a long-term, high-post member.....you know the drill.

I reckon you'd get drunk quicker my way.

true. But you are in a property investing forum after all. !!!!!!!!

And now that I think of it. The comments like " it's different here " and " property doubles every 7 years" seems to mostly come from the crash crowds. Funny that .

 

[Deltaberry]

What I find amusing as well, is economists being "surprised" by the increasing Chinese inflation (and the government having to really try and control it now).
And the economists here in Australia (and Somersofters), who think China is not heading for some challenges and a slowdown in the near future.

China inflation rise fastest since July 2008, exceeds market forecast
http://www.theaustralian.com.au/bus...-market-forecast/story-e6frg916-1225969373556

Gee, that may tend to happen, when you massively increase the M1 money supply in China. Everything looks rosy for a while, then inflation starts to catch up with you.
A 50% growth in M1 money supply in 2years.
http://www.economicsjunkie.com/wp-content/uploads/2010/11/china-money-supply.png

What may happen longer term, it that this inflation will spread through the world (inflation = higher cost of labour), increasing inflation in other countries (cost of goods go up), but I think assets like property with fall (stagflation).

So Chinese inflation will accelerate, more Chinese will enter middle class realm and wages will go up. Yet asset prices will fall... ? Hey can I ask have you actually been to China to see what's happenning?

 

[Aaron Sice]

So Chinese inflation will accelerate, more Chinese will enter middle class realm and wages will go up. Yet asset prices will fall... ? Hey can I ask have you actually been to China to see what's happenning?

keyboard warriors rarley venture any further than the uni bar.

 

[bluestorm]

So Chinese inflation will accelerate, more Chinese will enter middle class realm and wages will go up. Yet asset prices will fall... ? Hey can I ask have you actually been to China to see what's happenning?

Better than that even Deltaberry, Married to a chinese girl, who's extended family live in Shanghai. Parents here in Sydney have the ubiquitous Chinese satellite to watch all the China TV (CCTV, etc). So get all the regular news updates. The inflation is really starting to hurt people (especially with food), and people are really starting to complain. China does not want public unrest (where the average person earns 5-7K RMD/mth), so they will do anything to try and bring inflation under control.

So I know probably more than you do about the situation in China.

In terms of chinese property, Beijing have so far attempted to put in meaures across the provinces to try and cool property from the bubble (50% deposit on 2nd property, limiting investors to only 2 properties), but at this stage nothing has worked. Apparently the chinese are quite efficient in getting around these measures ;-)). Beijing will continue to try and control, and slow inflation, and to stop rises in property.

Beijing flooded the country with a hugh injection of money ($580B), now they are trying to bring the resulting infation under control. With too much inflation, cost of labour goes up, so your cost of goods goes up. Hence the spread of inflation world wide.

 

[zed_kid]

keyboard Warriors Rarley Venture Any Further Than The Uni Bar.

Oh Snap!!!

 

[Aaron Sice]

Beijing flooded the country with a hugh injection of money ($580B), now they are trying to bring the resulting infation under control. With too much inflation, cost of labour goes up, so your cost of goods goes up. Hence the spread of inflation world wide.

right.

spot on.

they will now be exporters of inflation.

what happens to prices when inflation comes home to roost? yet asset prices will somehow go....down?

the RBA tried to control imported inflation with the last half of 2007 rate hikes when oil prices were on the move.

they slashed them VERY quickly because they realised it was artificial data - then the GFC hit and they continued to slash.

 

[Ausprop]

what happens to prices when inflation comes home to roost? yet asset prices will somehow go....down?

could be a rerun of the 70s... a little before my time but I understand stagflation and the oil crisis had the central banks bamboozled yet they got off the hook (due to technology demand??)

 

[Aaron Sice]

could be a rerun of the 70s... a little before my time but I understand stagflation and the oil crisis had the central banks bamboozled yet they got off the hook (due to technology demand??)

this is WELL before my time.

if anyone cares to comment on what living through the 70s was like insofar as residential and commercial prices went, please add ..... ?

cheers.

 

[Intrinsic_Value]

right.


what happens to prices when inflation comes home to roost? yet asset prices will somehow go....down?

QUOTE]

asset prices could very much go down, i think two major factors that determine the chance of this are
(a) % finance that is on a variable rate
(b) term structure of the finance.

We have never been in this situation before, so its hard to get an idea from recent history.
I dont think one can directly refer to the 1970's because prior to that money was tied to the gold standard, so credit and monetary expansion didnt operate in the same manner as today.

There was definately not the same level of debt in the whole system running into the 70's as there is now.

PS i dont have the answer.
My gut feeling is telling me that 2011 could be a deceptive year, it could look good on the surface, but its just like the calm before a storm.

 

[Intrinsic_Value]

how many threads can we have on china bubble? one a day?

its very interested looking at the history of bubbles.
Often its reasonably possible to identify the 'bubble stage'.
But its very hard to calculate the 'priicking point' of the bubble.

Here is an interview with CNBC from two days ago.
http://wallstreetpit.com/53027-chanos-chinese-overdependence-on-new-re-to-hit-a-wall

Now i did a quick google search, and similar presentations were made by chanos at the start of 2010 (and possibly earlier).

For myself i am playing defensive, i might be early to the party, but i have made fantastic gains over the last 3 years, now the objective is to maintain those gains.

 

[Intrinsic_Value]

Remember it's absolute numbers in international trade, not PPP. China's GDP is about 5T. the US 14T and Europe 15T. So for the US and Europe to buy 2/3 of its production, that's only about 10% of their GDP. Assuming 2/3 of the US and European economy is consumption, it's not that much of a stretch for them to buy 15% of that from China.

interesting view point.

by the way how would you respond to the interview with chanos concerning the composition of chinese GDP. ie the influence of construction in GDP