The next big economic crash: China?

[Thunder]

http://finance.yahoo.com/retirement/article/108534/contrarian-investor-sees-economic-crash-in-china?mod=retire-planning

So says the guy who predicted Enron. This would be very bad if it comes true.

[INRM]

This sounds good and bad.

The good: China imploding under it's own weight might be useful in that they have such influence currently and have a horrible human rights record. It would take away a lot of their power

The bad: It could set in motion a sequence of events causing all sorts of financial hardships here in the US and around the world, potentially leading to a world government

[Thunder]

The bad: It could set in motion a sequence of events causing all sorts of financial hardships here in the US and around the world, potentially leading to a world government

an economic collapse of China would lead to a Great Depression. I have no doubt about it.

China would also likely seek to cash in on all of those treasury bonds and other investments they have in the USA's national debt.

Snowball effect straight to hell.

[INRM]

Parky 76,

Agreed. It would lead to a complete world-wide implosion. That would then advance the justification for a world-government...

There already is a "Bank of the World". It would gain more power in the wake of this, and if you control the economies of the world, you control the world. It wouldn't be hard from their for a world government to fall into place.

[Thunder]

Parky 76,

Agreed. It would lead to a complete world-wide implosion. That would then advance the justification for a world-government...

only in your greatest fantasies.

[corplinx]

A contrarian investor predicted it. His bias is stated up front. The big news would be if a contrarian investor thought differently.

Much of China's economy is based on exports. As long as the rest of the world is buying them, that part of their economy is fine. The domestic part could crumble and burn and those people will be lined up at the factories' making crap for Wal-mart for jobs.

If they stop buying our tbills, we might have to cancel a few wars or something. Or we might have to put some sanity back into our own government.

Sounds like a good deal to me!

[A W Smith]

Is Walmart aware of this?

[stilicho]

an economic collapse of China would lead to a Great Depression. I have no doubt about it.

No doubt? Why?

Here's the probable impact in graph form: http://www.data360.org/dsg.aspx?Data_Set_Group_Id=804

California defaulting on its debt obligations would have a far more dramatic global effect than a recession in China would. The thing is, defaults are already priced into our appreciation of debt issued either by California or by China.

Sinophobia now is no different than Sinophobia in years gone by.

[stilicho]

If they stop buying our tbills, we might have to cancel a few wars or something. Or we might have to put some sanity back into our own government.

Tail wags dog.

Political or military initiatives are not constrained by purely economic considerations. If they were then the EU, the UN and the USA would have supported Serbia in its efforts to keep Yugoslavia together.

[Thunder]

Sinophobia now is now different than Sinophobia in years gone by.

wow. nice word.

[lionking]

China is leading the world out of recession and has a long way to go before it crashes. As others have said, the world will have to stop buying or other nations will have to both undercut Chinese prices and lift their capacity enormously. None of these things seem likely.

[stilicho]

wow. nice word.

I've got a million of them.

Anyhow, can you find out what this guy is strong on? I looked and I looked and all I can see is short selling on the ursine-du-jour. That doesn't look very good since cash would necessarily be US dollars. Is he buying euros? Canadian dollars? Property in the Catskills?

I would also like to see any evidence that he made money on the Enron collapse. It looks as though his fortune was built on the investments of his clients and that he, himself, didn't have anything to do with Enron.