You shouldn't have any doubts, then, should you? Put those turkeys on the market.
China to blow up this year...
- Thread starter DanielG
- Start date
You shouldn't have any doubts, then, should you? Put those turkeys on the market.
Hi Bill
You have dealt with the second issue but not the first, which is still a terrible economic risk following the global govt response to the GFC.
Of course being long in property in the middle of a global outbreak of inflation may not be such a bad thing...
Yes I've heard that from others too.
It's funny because in the 1890s the WA govt borrowed 100% of the State's GDP in one year to build a pipeline so they could pump water from Perth to Kalgoorlie. That pipeline is still being used. It was a decision that is now widely regarded as a good one.
The politicians of the day seem to have had a little more backbone than the current breed, to put it rather mildly.
All this alarmist talk about the level of govt debt gets a tad wearying. It's not so much the size of the debt that is a problem but rather what it gets used for that should be the key question.
And in China, the govt is the economy and vice versa. They (the govt and the economy) are swimming in money that their population don't get to share. They can deal with a property bubble or two easily as they control all the levers, unlike Western democracies. I tend to think the unsustainable thing about China is their system of government. Greater economic freedoms will eventually clash with their lack of political freedom and it may not be pretty when it happens.
But their cultural cringe means it may not happen for quite some time to come... although here's hoping Google was the canary in the coal mine.
I wouldn't be surprised if China keeps on growing for a few more years - calling the top is always difficult, and there's the whole market remaining irrational for longer thing.
What would a crisis in China affect Australia?
If Australia avoided the worst of the GFC due to its economy being more synchronised with China than the US then there would be a risk of contagion, leading to a recession. Particularly if it was the resources boom that kept growth going.
Australia's fiscal position isn't too bad in many ways (government debt as a percentage of GDP remains low), but there's a lot of private debt. If a large part of the workforce got into trouble then the banks might start looking shaky.
If things turned really bad (and there's no guarantee that they will) then I'd like to be in cash, and probably divided amongst several banks. That's largely because it's liquid, and there might be opportunities to acquire assets on the cheap when the dust has settled.
I wouldn't want to be highly geared up in shares or cashflow negative properties. I'm guessing that you might get margin calls with the former, and prolonged pain with the latter.
What would a crisis in China affect Australia?
If Australia avoided the worst of the GFC due to its economy being more synchronised with China than the US then there would be a risk of contagion, leading to a recession. Particularly if it was the resources boom that kept growth going.
Australia's fiscal position isn't too bad in many ways (government debt as a percentage of GDP remains low), but there's a lot of private debt. If a large part of the workforce got into trouble then the banks might start looking shaky.
If things turned really bad (and there's no guarantee that they will) then I'd like to be in cash, and probably divided amongst several banks. That's largely because it's liquid, and there might be opportunities to acquire assets on the cheap when the dust has settled.
I wouldn't want to be highly geared up in shares or cashflow negative properties. I'm guessing that you might get margin calls with the former, and prolonged pain with the latter.
Of course being long in property in the middle of a global outbreak of inflation may not be such a bad thing...
I'd agree on that one. And I think that it's a very possible scenario, particularly when you look at the amount of money that the US, UK and Chinese governments (in particular) have printed.
I thought the above is worth highlighting and IMO we should not be worried about China
watch out for self appointed "gurus"
Are you quite sure he is spot on in his analysis? And he sent you a personal email? To you and how many hundreds of thousands of others? These guys are out to sell something or have a personal agenda and it would be prudent to be cautious of what they say.
http://randomlyspecific.vox.com/library/post/hothead-blogger-karl-denninger-of.html
Are you quite sure he is spot on in his analysis? And he sent you a personal email? To you and how many hundreds of thousands of others? These guys are out to sell something or have a personal agenda and it would be prudent to be cautious of what they say.
http://randomlyspecific.vox.com/library/post/hothead-blogger-karl-denninger-of.html
I travel to Beijing pretty regularly. The number of cranes over new buildings was definitely lower on my last trip, which was a couple of weeks ago. So, I think there is a slowdown in the number of new residential buildings, which should help avoid a bubble.
There is such a strong domestic demand for goods/ services that China is not so dependent upon other countries to prop up their economy. So, I think they are going to be strong for some time to come.
What I really noticed, in our industry is that there has been a definite shift from purchasing/ selling the cheapest products available to looking for more higher end, functional products... not just from private purchasers, but also from govt purchasers. ite a significant shift in attitude in a short space of time and is an indication of a maturing of the market.
Its a very positive indication to me of future growth opportunities in China...... I don't think its crashing any time soon.
The US on the other hand...... I don't see much positive news coming from there, and the seeming unwillingness to restructure the economy is bad news for their future. In fact, I think that many people in US can't even see that they have a problem yet! and some of this D and G stuff coming from USA is just a way of perpetuating inefficient and unhelpful practices and of keeping their eyes off their own problems.
Pen
There is such a strong domestic demand for goods/ services that China is not so dependent upon other countries to prop up their economy. So, I think they are going to be strong for some time to come.
What I really noticed, in our industry is that there has been a definite shift from purchasing/ selling the cheapest products available to looking for more higher end, functional products... not just from private purchasers, but also from govt purchasers. ite a significant shift in attitude in a short space of time and is an indication of a maturing of the market.
Its a very positive indication to me of future growth opportunities in China...... I don't think its crashing any time soon.
The US on the other hand...... I don't see much positive news coming from there, and the seeming unwillingness to restructure the economy is bad news for their future. In fact, I think that many people in US can't even see that they have a problem yet! and some of this D and G stuff coming from USA is just a way of perpetuating inefficient and unhelpful practices and of keeping their eyes off their own problems.
Pen
No I haven't, and I really don't appreciate the snarky replies I get when I am only wanting to discuss my legitimate concerns. I thought this forum was to discuss concerns and bring about awareness about all aspects of investing. It seems to get along we all need to be bullish about property, like bulls and bears on the fox network.
I will not post any more of these subject matters any more.
I got your back matey....I love a good fight. Im a D&Ger from way back.
It aint healthy but it sure is fun
I dont know this guy, and havent bothered to read the link (too much information can lead to investment paralysis). I prefer to be selective in my reading material.
I will say one thing however, over most points in time, bulls win over bears, why because capitalism works over time. Resources are constantly being allocated to the most profitable ventures and mankind constantly adjusts and then seeks to profit from his environment.
I am also nervous about residential property, i think its unsustainable (at least for the melbourne market). I dont know how it will pan out, but i am doing what i always do in this situation, i am slowly taking skin out of the game at incremental price increases.
The trouble is nobody knows when the change in inflection points will occur, or what the degree of inflection change will be.
Just as i dollar averaged downwards into the recent stock market crash (because i couldnt be certain of picking the low in the market), so am i dollar averaging outwards in the residential property market (because i cant be certain where the top if any will be.
I will say one thing however, over most points in time, bulls win over bears, why because capitalism works over time. Resources are constantly being allocated to the most profitable ventures and mankind constantly adjusts and then seeks to profit from his environment.
I am also nervous about residential property, i think its unsustainable (at least for the melbourne market). I dont know how it will pan out, but i am doing what i always do in this situation, i am slowly taking skin out of the game at incremental price increases.
The trouble is nobody knows when the change in inflection points will occur, or what the degree of inflection change will be.
Just as i dollar averaged downwards into the recent stock market crash (because i couldnt be certain of picking the low in the market), so am i dollar averaging outwards in the residential property market (because i cant be certain where the top if any will be.
what a crock of sheeyat.
china is attempting to house 200mil people before 2020 from rural areas into new cities like Chongqing - look it up. that's australia's population EVERY YEAR for 10 years.
they'll do it whether they can afford to or not. part of a longer term population control strategy "you'll do what's good for you or we'll make you" rhetoric.
China thinks LONG TERM - 200 years plus - a 10 year quip in debt levels worries them about, oh i dunno.... >< this much?
all thoe numpties out there worried about a bubble and unsustainability are thinking like a capitalist.
China is communist - newsflash - rules don't apply here.
china is attempting to house 200mil people before 2020 from rural areas into new cities like Chongqing - look it up. that's australia's population EVERY YEAR for 10 years.
they'll do it whether they can afford to or not. part of a longer term population control strategy "you'll do what's good for you or we'll make you" rhetoric.
China thinks LONG TERM - 200 years plus - a 10 year quip in debt levels worries them about, oh i dunno.... >< this much?
all thoe numpties out there worried about a bubble and unsustainability are thinking like a capitalist.
China is communist - newsflash - rules don't apply here.
I agree. Rules dont apply to China. But economics do. You can only fight gravity for so long. The arguement it seems is:- are they actually fighting gravity?? It is amazing how well they have "booked" there numbers. We can all agree theyre fudging numbers. Id just like to know by how much.
If OPEC nations can get away with fudging there quotas for so long im positive china can do it for an equal amount of time.
Iv seen the fake cities they have built, that currently hold no people. Just ghost towns that are in place to trump up figures...But....they are ghost towns only in the intrum.
Ghost towns usually occur after an economic event. Chinas making them prior to one. At the moment they are the masters of "build it and they will come"
They will come. There just not there yet in some parts of China.
but the laws of economics only apply if everyone involved plays by them.
china has no care for the rules as it is big enough on it's own to support itself - and if it isn't - it'll just cut back services to it's citizens so it can.
i think everyone needs to take off their rose coloured glasses when talking about china. be cynical, skeptical and think like a manic depressive after reading 1984 and stop assuming that because they hold western currency that they want to be a western economy.
china has no care for the rules as it is big enough on it's own to support itself - and if it isn't - it'll just cut back services to it's citizens so it can.
i think everyone needs to take off their rose coloured glasses when talking about china. be cynical, skeptical and think like a manic depressive after reading 1984 and stop assuming that because they hold western currency that they want to be a western economy.
BC,I agree with that,but also look at it like this,it has only been in the last 30 years that China has been open too the world in Business terms
10%growth per year over that period when taken over a 30 year span what i think about is the next 10 years and what will happen in the world currency markets,also everyone stops to think about one simple item" they are yet to be tested in any serious "Crisis",just like Berlin prior too the
Wall being blown apart..willair..
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everyone wants to be apart of western society in some forms. Even the extremes that you would never think...Saw a doco that made me laugh. Of all places; woman in Iran and Iraq lining up to have plastic surgery. Nose jobs are in and growing rapidly it seems.
I do forget Chinas size sometimes. They are an entire planet all by themselves.
in some forms. Even the extremes that you would never think...Saw a doco that made me laugh. Of all places; woman in Iran and Iraq lining up to have plastic surgery. Nose jobs are in and growing rapidly it seems.I do forget Chinas size sometimes. They are an entire planet all by themselves.
