Location: On an Island in the west coast of New England
Posts: 13,132
RE: Chinese Stock Market Bubble Bursting On The Horizon?
The stock markets in today's world are all connected in one way or another. I like it when they are all doing well. When one falls many others do too. Not good I hope Greenspan is wrong.
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Too busy with fishing to spend much time here.
RE: Chinese Stock Market Bubble Bursting On The Horizon?
I strongly disagree. The bad blood between the U.S. and China over currency and trade keep us farther apart than many realize. Sure, there will be a ripple across the world. But the lousier the Chinese economy becomes, and the fewer investments foreigners make inboomtowns, the less demand the country has on oil to begin with, as well asother fuels, minerals and lots of other commodities. Things will be more plentiful on the markets for us, and at potentially lower prices.
The trade-off will be that we import less Chinese crap and have to pay a little extra for some items. The rest of Asia is catching up with manufacturing, though, so other markets will prosper as they try to reclaim what China lost. And we get our cheap crap, which I think is good for the average American's wallet.
RE: Chinese Stock Market Bubble Bursting On The Horizon?
Long term, China is going to develop economically and develop very rapidly. They are an important global economic power today and will only become more important. 1/2 of the world's population live in Asia between India and ***an and from China southwards. This region, for various reasons, remained almost entirely undeveloped until after WW-II. South Korea did not begin economic development until 1961. China did not begin its present turn towards capitalism until 1978. These regions were to some extent frozen in time by colonialism until about 1960-1970, and thus their economic development retarded. The good old days of the US being the big dog in the economic world are over. ***an sells more into Asia than into the US. Samsung sells more into China than into the United States. These are large scale trends that vagaries of government policy (other than a hard turn back to centrally controlled communist economies, which seems to be soundly discredited and not in the cards) and transient market corrections are not going to deflect significantly.
I'm guessing the Chinese stock market is responding to the Chinese currency issue. Everyone feels, I think, that China must ultimately allow their currency to float to its natural value, which will make Chinese goods sold in foreign markets more expensive, thus throttling these sales . . . for awhile. Short term there will be pain, I suppose, for the Chinese economy, but the long term trend is clearly strong development, expansion, rising standards of living. I also think that the strong interlinkages between world stock markets will lead to any strong decline in the Chinese stock market percolating into other markets. Among other things, out-of-country Chinese are large investors in other stock markets around the world. If they get hit hard in the Chinese market and liquidate some of their funds in other markets it may well be that those other markets -- NYSE for example -- may take a general hit.
Location: On an Island in the west coast of New England
Posts: 13,132
RE: Chinese Stock Market Bubble Bursting On The Horizon?
I used to stay up on it now I just pay someone to manage it...but only check the balance after a good week. I do have lots of international mutual funds though.
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Too busy with fishing to spend much time here.
RE: Chinese Stock Market Bubble Bursting On The Horizon?
I've posted similar before, however I do think that too many see China as some invincible, impervious monolith. They're having issues with unemployment & the aging of the population. There is unrest in the rural areas because of true economic disparity. I believe their central problem is trying to keep communistic tyrrany while @ the same time trying to reap the benefits of free market capitalism. These 2 things do not mix well, as those who experience economic freedom also want to experience social & political freedom. The Chinese culture is different; however, it does remain to be seen if China can continue with this balancing act.
Chinese Stock Market Bubble Bursting On The Horizon?
