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 What's left after the Boom went Bust ? The Decline of the West and the Rise of the East

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PostSubject: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Fri Jan 23, 2009 1:29 pm

This topic was split from the 'Urgent Call to Stop Anglo Nationalisation' thread. As Squire has said on numerous occasions, the West and East are in a re-balancing act in terms of economics, currencies, commodities, consumption. During the boom, the U.S. bought on tick from China and that U.S. boom money found its way to our shores too, contributing to the asset bubble here, hitherto known as the 'boom'.

Could it be part of a 'boom' yet ? It was inevitable that the West would decline and the East rise, one due to the other. Over the next ten years our living standards, I predict, will need to readjust substantially because of the 'tectonic' shifts that are going on in world economics. Such a transition to a more prosperous East and self-reliant West we hope will be a peaceful transition - or will it ?

Our bubble here has left us with enormous quantities of property assets that as Squire says may be treated as assets whereas if there is no demand and they don't perform then the will fast become tumble-weedy liabilities.

Did we squander the boom and what exactly did we build anyway ?? I'm sure a different type of bubble here might have boosted and bootstrapped China n the same way the tech and housing bubbles did. I'm convince for one that had we bubbled in energy in some way as we are doing now, then we'd have some serious infrastructure left over after it as well as affordable and secure energy and associated jobs and perhaps something like the Iraq war might even have been avoided .

Someone on Pat Kenny last week said "we concertina'd twenty years production into ten so we'll be paying for it for the next ten" Is it too late ? Is a generation's worth of damage done or might we be soon seeing the next bubble that will leave us with useful assets ? Could another boom finally save us ?

--Audi



Audi

There are a lot of people saying that. I have not read the Glass Steagall Act never felt the need as it is not my field of interest. There is however no question that the regulation of the financial sector has been ineffective and the abuse and avoidance endemic. They are way out of line and need severe regulation.

However this problem all goes back to the idea that you can magic wealth out of nothing. That you can create wealth by deals, when really all you are doing is buying into a pyramid scam. Lasts for a while but when you run out of suckers!

I take the view that buildings are assets but if they are not needed they fast become liabilities. What is sad about this is that money that could have been used to build power plants or invested in real business activity or hospitals has been poured into some ridiculous bubble and a lot of the activity has been very dubious.

Also the inflated property prices has enabled some people to borrow and spend sucking in goods we really cannot afford. Coupled with that you have many many people who have taken the view that the west is not he place to be and have, and are investing, elsewhere. The overall result is production and wealth moving East. Yes this will hit China and India but right now their rate of growth is merely slowing. We have ended the ascendancy of the West.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Fri Jan 23, 2009 2:46 pm

*Please listen to Squire on this*

I agree that this shift is taking place - China is now the third biggest global economic power.

Quote :
As a result of this swift growth, China's share of world gross product (in purchasing power parity) has risen from 3.4% in 1980 to 15.4% in 2005, while the US's share has remained steady at around 21% and the joint share of the countries that make up the EU today has fallen from 29% to 21%.
There is a good 2007 account of what this means here:
http://www.realinstitutoelcano.org/wps/portal/rielcano_eng/Content?WCM_GLOBAL_CONTEXT=/Elcano_in/Zonas_in/International+Economy/ARI+100-2007
China, with India and the rest of the far east are passing out the west very quickly.

Having said that, the whole system on which their growth has been based is going through an enormous bust, with unforeseeable consequences.

One conclusion that can be drawn is that the resources on which the lifestyle of the western middle class were funded are severely curtailed.

The privileged lives of the western middle class were always paid for by the cheap acquisition of global raw materials used for industrial production and then exported as finished goods. The British cotton industry in its day for instance wiped out Indian local cloth production.

Globalism is changing everything. Now its Chinese produced goods that are wiping out local manufacture all over the world. Cheap goods yes, but ultimately, no money to buy them with. Globalism has unleashed massive productive capacity and drawn production to the lowest cost base economies away from the west. If it isn't to be a race to the bottom, something else has to be put in place.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Fri Jan 23, 2009 3:09 pm

China is going to have huge problems over the next couple of years in respect of social disturbance and unrest.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Fri Jan 23, 2009 4:08 pm

Strangely for all the talk about the rise of China, it is still not the biggest exporter in the world. Germany is still top dog based on 2008 figures. Its too easy to get carried away and dismiss the wealth of Europe.

Also we are only talking about the relative decline of the West. The West is richer than it ever was, the East is just catching up with us. This should be welcomed if we want to remove everyone on the planet from extreme poverty. Or is it a case that we just want to pay lip service to the removal of world poverty and are uncomfortable with the consequences of the industrialisation of poor countries.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Fri Jan 23, 2009 4:22 pm

Art wrote:
Strangely for all the talk about the rise of China, it is still not the biggest exporter in the world. Germany is still top dog based on 2008 figures. Its too easy to get carried away and dismiss the wealth of Europe.

Also we are only talking about the relative decline of the West. The West is richer than it ever was, the East is just catching up with us. This should be welcomed if we want to remove everyone on the planet from extreme poverty. Or is it a case that we just want to pay lip service to the removal of world poverty and are uncomfortable with the consequences of the industrialisation of poor countries.
Some massive industries in the West have been shocked in the last few months - mostly vehicles - and there could be a lot more as the likes of India and China ascend more and more. It wouldn't surprise anyone if there was a strong industrial lobby banging on about Global Warming and Carbon Taxes with the sole aim of protecting their own industries. Some propaganda is often directed against "environmentalists" who are seen to contribute to this bother. "Tree hugger" is a derogatory word for some in America.

It's going to be interesting to see what the balancing will shake out - I'd imagine we'll get to see more and more energy technology here first but then again that will boost the East even more as they can produce it cheaply. This is one example but if we can afford to buy it then we get to have good kit we can use in a self-reliant manner without dependency on further inputs as in the case of fossil fuels. The question is what do we sell these people to get their stuff in return ? In ten more years if not less, Chinese technology and brands will have an equivalent resonance to the 'Made In Japan' brand.

You might not like Kia but they've that seven year warranty on some models so if everyone bought a car like that at roughly the same time then manufacturers would be looking at seven years of dearth ...
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Fri Jan 23, 2009 5:31 pm

Art wrote:
Strangely for all the talk about the rise of China, it is still not the biggest exporter in the world. Germany is still top dog based on 2008 figures. Its too easy to get carried away and dismiss the wealth of Europe.

Also we are only talking about the relative decline of the West. The West is richer than it ever was, the East is just catching up with us. This should be welcomed if we want to remove everyone on the planet from extreme poverty. Or is it a case that we just want to pay lip service to the removal of world poverty and are uncomfortable with the consequences of the industrialisation of poor countries.

Up to this year we were talking about growth, this year we are talking about decline. The economy of the east has grown enormously in the last 15 years, relatively to the west and even this year is projected to grow at least 5%. My point was that the long era in which people in the west could take it as some kind of a birth right that we would be rich while the colonised remainder of the planet was poor is over. Globalised capitalism will never do away with poverty and provide equality, it works through accumulation of capital in the hands of a minority.

Quote :
Globalism has unleashed massive productive capacity and drawn production to the lowest cost base economies away from the west. If it isn't to be a race to the bottom, something else has to be put in place.

This GDP graph gives an idea of the change taking place, although we now know the projections for the future are wrong.



China overtook Germany to become the world's third largest economy by the end of 2007. It is expected by the Economist Intelligence Unit to have overtaken both Japan and the US by 2017, to be the world's largest economy.

http://www.ft.com/cms/s/0/8d9337be-e245-11dd-b1dd-0000779fd2ac.html?nclick_check=1
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sat Jan 24, 2009 12:04 am

johnfás wrote:
China is going to have huge problems over the next couple of years in respect of social disturbance and unrest.

Due to the governance of that country you may well be right, but I would rather face the problems of China and India than those of Detroit!

Today I was out looking at a warehouse, belonging to a business that may go under, wholesale gifts and cards. Shelf after shelf of tat. NONE OF IT that I could see was produced in the west. Dogs with hearts for Valantines Day, nondescript children,s toys etc. Mountains of the stuff. This is decadency. We are squandered our wealth on trash. We just do not need this stuff. Not any of it. Our economies cannot afford money haemorrhaging out to pay for it.

Previously I mentioned that I can employ a tradesman in India for a month for what a bricklayer would want for a day in Ireland. How can we compete with this? We flatter ourselves by thinking that we can specialise in high end, value added in the mistaken belief that India or China cannot also participate in those areas. As basic production moves then eventually so also does machine tool production and other specialist trades and businesses. So also does services such as advertising, architecture etc.

So how do we compete. We cannot pull our costs down to levels comparable with those in rural India and we cannot sit around and hope that inflation in China brings their cost up. Debasing the currency and by that means reducing costs has never been known to work. Also our countries are now up to their necks in debt and this again causes an outflow of resources.

Consumption in the West has acted as the engine for the world economy that has to stop, but we must recognise that when it does we will become increasingly less relevant unless we can effectively revive our economies.

So what do we do?
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sat Jan 24, 2009 12:07 am

Default, or have a revolution. Or both.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sat Jan 24, 2009 12:20 am

Too much growth out east and the shortage of natural resources of all sorts will come up to bite us all on the derriere again. Energy generation out east is more inefficient than in the west; there will be high end, high tech opportunities for us with that, I would suspect

What with all the "can Bush's war crimes" policies and all that, so far Obama has been exceeding my expectations. perhaps he can do the same with renewables. The profit prizes will go to those nations that can keep the lights on as the fossil fuels dwindle. That may well not be the East. As Johnfas points out, the ability of these Governments to hide nasties under the carpet must not be underestimated. In regimes of that sort, the no-warning meltdown is always a risk.

The fact that everyone is now bigging up China is setting off "new paradigm" warning bells in me loaf of bread if yer see what I mean

New paradigm, or next big bubble for West weary investors to sink their cash???
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sat Jan 24, 2009 1:08 am

And I wonder the consequence of Ireland defaulting on its loans. That is an interesting economic and political one. I think you will see some sort of conditional bailout before that is allowed to happen.

If a bond issue fails the ECB and the Eurozone central banks cannot monetise but apparently they can buy debt in a secondary market! The UK and USA will print which is in a way defaulting as the repayment is with currency that is worth less.

Argentina is probably most likely to default.

In the past China defaulted, did it not? Wonder what the consequences were? Seems to have recovered.

Expat

I totally agree with you about energy. It is a clever place to invest looking 5-10 years out.

It is not so much talking up China, it is Korea, India, Singapore, etc. with countries like Brazil also on their way up. We still have some strong positions not least of which is our investment in infra structure, but we need to wake up fast. China does have problems and it is not a system of governance that I admire, but we could learn a lot from China. Their government supports Chinese business.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sat Jan 24, 2009 1:24 am

The other impressive thing about China is that the scientists and engineers are well represented in the corridors of power.

The west has too many lawyers and bureaucrats.

Perhaps, on the other hand, if we learned to use resources better, this is all a long term opportunity. More wealthy consumers means bigger markets. But only if we can learn to use recycling, renewables and biomaterials without environmental degradation
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sat Jan 24, 2009 2:08 am

Never enough lawyers...
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sat Jan 24, 2009 3:11 am

expat girl wrote:
The other impressive thing about China is that the scientists and engineers are well represented in the corridors of power.

The west has too many lawyers and bureaucrats.

I would be delighted if scientists and engineers were more prevalent. You need a better spread of expertise. The legal profession has its role but what does it know about the actuality of getting things done? How good are they at judging the importance of scientific developments? The over representation of lawyers has assisted the movement towards spin and 1/2 truths. If I were Emperor in the West I would transfer funding in eduction from the Arts and similar to Science, Engineering, Applied subjects, Medicine, Dentistry etc. Then you have all those rubbish business and marketing courses that need to improve.

I can't understand why bureaucracy seems so difficult to cut.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sun Jan 25, 2009 1:01 pm

Squire wrote:
Today I was out looking at a warehouse, belonging to a business that may go under, wholesale gifts and cards. Shelf after shelf of tat. NONE OF IT that I could see was produced in the west. Dogs with hearts for Valantines Day, nondescript children,s toys etc. Mountains of the stuff. This is decadency. We are squandered our wealth on trash. We just do not need this stuff. Not any of it. Our economies cannot afford money haemorrhaging out to pay for it.

Maybe this guy below has the solution ? How to bring American manufacturing jobs back - using the old American baseball bat method.

WARNING: 5 mins of strong language and economism

"Chinese Sh&*"

http://www.youtube.com/watch?v=B8cE2b7QbMk
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sun Jan 25, 2009 1:11 pm

Germany also has a lot of engineers in Government.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sun Jan 25, 2009 2:50 pm

Audi

What that guy forgets is that many of the businesses in the East are due to Western outward investment. Certainly I think we need to get back to requiring clear indication of country of manufacture. We need to allow in essential cheap foreign goods but tax the rest into oblivion.

This is part of something I posted on p.ie and has relevance.

Trying to predict currency movements I find difficult, no virtually impossible, as there are so many inter related and unpredictable factors. I have a simplistic view of such things, solid trade surplus good, high levels of debt bad, but it just does not seem to work like that at all, does it?



Yen, Norwegian and Swiss perhaps as safe a place as there is in the first 6 months of 2009, but truely anyone's guess. The Renminbi should be strong but the government of China may have other views on that. This 1 year graph Chinese against dollar IMO does not reflect relative strength at all and must indicate strong Chinese intervention.

http://quotes.ino.com/chart/?s=FOREX_USDCNY&v=d12

China is running a 280 billion dollar trade surplus whilst that of Japan has plummeted. By comparison the German trade surplus is about 22 billion dollars.


To compete against China you will need to be ruthless and cunning. Forget concepts like free trade and level playing fields they do not exist.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sun Jan 25, 2009 3:44 pm

Squire wrote:
Audi

What that guy forgets is that many of the businesses in the East are due to Western outward investment. Certainly I think we need to get back to requiring clear indication of country of manufacture. We need to allow in essential cheap foreign goods but tax the rest into oblivion.

This is part of something I posted on p.ie and has relevance.

Trying to predict currency movements I find difficult, no virtually impossible, as there are so many inter related and unpredictable factors. I have a simplistic view of such things, solid trade surplus good, high levels of debt bad, but it just does not seem to work like that at all, does it?



Yen, Norwegian and Swiss perhaps as safe a place as there is in the first 6 months of 2009, but truely anyone's guess. The Renminbi should be strong but the government of China may have other views on that. This 1 year graph Chinese against dollar IMO does not reflect relative strength at all and must indicate strong Chinese intervention.

http://quotes.ino.com/chart/?s=FOREX_USDCNY&v=d12

China is running a 280 billion dollar trade surplus whilst that of Japan has plummeted. By comparison the German trade surplus is about 22 billion dollars.


To compete against China you will need to be ruthless and cunning. Forget concepts like free trade and level playing fields they do not exist.

Your man was gas above - I think he was pulling the piss a little. I was going to post a comment on his Channel asking him if his computer was Made in China too.

It's a very intriguing one though and how there is a play off between our production infrastructure and that of emerging economies like China. Like, how can they produce stuff so cheaply ? I know there are so many elements to and differences between both systems - employees and costs, energy and raw material costs, production processes, efficiency and politics; you'd have to wonder if the free market should really only be left in a textbook or used as an aim only. Perhaps some trade protection should apply - or some kind of stamp as you say that shows "Made in _____" but consumers will buy the cheapest - the Free Market is a self-defeating system. Perhaps if there was a grassroots drive towards quality, ethical and sustainable consumption of products then maybe there would be a different profile on consumption of goods. But go into any €2 shop and there is a world of goods at that price that are seriously deflationary if it went beyond toothpaste, low-quality gadgets and tools, handcuffs for Valentine's Day etc. I imagine very soon this knockdown regime will extend to vehicles, energy production products as it seems to have already for clothes etc.

I don't know anything about the Chinese currency but if there are good threads going on on p.ie about it please post links here. The likes of Seabhcan seems to have lots to say as do others. I thought the currency value was under the control of the Chinese government though and that they could devalue it at will. Although I think I read somewhere that that is being changed.

Currency systems .. now there's another thing. Tim Geithner is apparently NOT having a shot at China over currency manipulation according to one fella on Bloomberg TV although there are allegations that the Chinese are doing it. They are not freely floating the currency, he says.

Quote :
"China Dismisses Claims of Currency Manipulation - Analysis and Discussion with Elliot Feldman of Baker Hostetler"

Bloomberg TV
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Sun Jan 25, 2009 6:24 pm

The inevitable follow on from international economic crash is protectionism - this used to be called "beggar my neighbour" economics, and leads to more deflation and crushing of one economy by another. The follow on to protectionism historically has been war.

Link on what Geithner said on China. There is a rush to get him to retract as the dollar took a leap as soon as he said it.

http://online.wsj.com/article/SB123275567586511815.html

We'll start hearing more about jobs in arms production, and bobs your uncle one day it'll be all out war.

Quote :
Timothy Geithner's tax oversights drew most of the media attention at his confirmation hearing, but the biggest news is the Treasury Secretary-designate's testimony Thursday that he'll ratchet up one of the Bush Administration's worst habits: China currency bashing.
Quote :
APIn a written submission to the Senate Finance Committee, Mr. Geithner said the Obama Administration "believes that China is manipulating its currency." He says he wants Treasury to make "the fact-based case that market exchange rates are a central ingredient to healthy and sustained growth." The dollar promptly fell and gold jumped $40 on the news.

We're not sure what Mr. Geithner means by "market exchange rates," given that the supply of any modern currency is set by a monopoly known as the central bank. When Mr. Geithner says China is "manipulating" its currency, what investors around the world hear is that he really wants Beijing to restrain the number of yuan in circulation and increase its value vis-a-vis the dollar. That's a call for a dollar devaluation to help U.S. exporters.

This would seem to be an especially crazy time to undermine the dollar, given that the Treasury will have to issue some $2 trillion to $3 trillion in new dollar debt in the next couple of years. A stronger yuan would also contribute to Chinese deflation and slower growth, which would only mean a deeper world recession. Even the Bush Treasury never formally declared China to be a currency "manipulator" in its periodic reports to Congress. If the Obama Treasury is now going to take that step, hold on to those gold bars. We're in for an even scarier ride than the Fun Slide of the last few months.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Mon Jan 26, 2009 3:54 am

Protectionism then War you say ? Great.

Big UK steelmaker laying off people for now - are they trying to preserve the environment or preserve the steel for other uses What a Face

I read from it that they [Corus] got too dependent on big money coming out of China - everyone did, in a reverse Opium Wars situation - and now that money has collapsed. Can and should businesses plan for the day that there is no money coming in? Presumably these fellas did anyway. Hopefully their employees did too.

3500 jobs gone - a black day for the UK economy again.

Quote :
British steelmaker Corus is to cut up to 3,500 jobs this week in one of the biggest blows yet to the faltering manufacturing sector, it was reported today.

The Anglo-Dutch company, which employs 24,000 people in the UK and has steelmaking operations at Port Talbot, Scunthorpe and Teesside, has been rocked by the paralysis gripping two of its main markets – construction and car manufacturing.

The Sunday Times said union leaders were in last-ditch talks with the government in an attempt to fend off some of the job cuts.

They have pressed ministers to adopt a system offered by the Dutch government where the state makes up the pay of workers put on short working weeks.

Corus is Europe’s second-largest steelmaker and the ninth largest in the world. It was formed a decade ago from the merger of British Steel and Dutch firm Hoogovens. Two years ago it was bought by Tata Steel, sister company of Tata Motors, the owner of Jaguar Land Rover, for £6.7bn (€7bn).

Jaguar Land Rover is also understood to be considering another 1,500 layoffs, according to the newspaper.

Today’s report said the Corus job cuts were not expected to lead to the closure of any large sites.

Corus management had planned to restructure the business gradually, but the plan has been accelerated by the crisis in the world steel industry. Steel prices, which had been driven to record highs by demand from China, have more than halved in the last year.

Corus faces strong competition from rivals in India and Brazil, although it has benefited from the efficiency of its Dutch plants and the improved performance of its operations in the UK.

The changes have been drawn up by chief executive Philippe Varin, who is due to leave the business in April following six years at the helm.

The company also has steel processing operations in South Wales, Scotland and the Midlands.

Corus declined to comment today.
http://www.breakingnews.ie/business/mhsngbcwcwmh/
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Mon Feb 02, 2009 5:08 pm

http://www.irishtimes.com/newspaper/opinion/2009/0202/1232923381107.html

A good discursive article on the shift from west to east, by Tony Kinsella, in today's Irish Times.

Quote :
Whichever term you find most acceptable, Europe and her children in the Americas and Australasia have determined global economic, cultural and military parameters since the 15th century. Those countries’ populations, even including all their indigenous peoples, adds up to around two billion people, or a bit less than one-third of our planet’s population.

We should be grateful and humble that the emerging two-thirds of humanity do not seem bent on exacting revenge, but are rather focused on the future. The early signs from the Obama administration, in its gestures towards the Sunni world, Israel and Iran, suggest it has grasped some of this reality.

The figures speak for themselves. Ireland’s Central Bank is forecasting that our economy will contract by almost five per cent this year, while Germany’s will contract by 2.5 per cent. Contrast with International Monetary Fund predictions of eight per cent growth for China, 6.5 per cent for India, and 3.5 per cent for Brazil. Those three emerging economies, with a combined population of around 2.5 billion, will grow by an average six per cent.

It is true that Chinese growth is down from its record 13 per cent in 2007, but Beijing is now two months into its €450 billion domestic stimulus programme. This is about 14 per cent of China’s 2008 economic output compared to the six per cent level of the Obama package. The US package requires additional deficit borrowing, while China is funding its efforts from its cash reserves – estimated at €1.5 trillion last December.

Chinese exports have shrunk as world demand contracts, but not quite as quickly as Chinese imports, so its trade surplus hit a record €225 billion in 2008. China is spending €67 billion on intercity rail lines this year, up from €9 billion in 2004. It has built as many kilometres of high-speed lines in the past four years as Europe has in the last 20 years. The US stimulus package only allocates five per cent to transport infrastructure.

Beijing is undoubtedly anxious about the political impact of redundancies in its export-dependent industries, and will, according to Qu Hongbin, chief China economist at HSBC “spend like there’s no tomorrow”. Some €95 billion has been committed to providing a universal healthcare system for all citizens by 2011.

The world’s newest bus factory has just opened in the southern Indian city of Dharwad. This 50 hectare factory is capable of producing 30,000 buses a year, and is a joint venture by the Indian Tata and the Brazilian Marcopolo groups. Tata is already the world’s second largest bus manufacturer and a glance at the regions where it and its Brazilian partner focus their sales is quite instructive about our futures – Africa, the Middle East, Asia and Latin America.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Mon Feb 02, 2009 6:25 pm

Good find. Big differences in what they have available to them by way of stimulus - China is spending cash reserves while America is borrowing. I suppose that 'borrowing' can't be really thought of in terms of money but rather is terms of credit for imports. It looks like America and other parts of the West could be in a precarious position about their deficits, imports and so on, if the rest of the place (minus the West) could get into a situation of beneficial mutual trade coupled with a strong culture of self reliance.

Quote :
It is true that Chinese growth is down from its record 13 per cent in 2007, but Beijing is now two months into its €450 billion domestic stimulus programme. This is about 14 per cent of China’s 2008 economic output compared to the six per cent level of the Obama package. The US package requires additional deficit borrowing, while China is funding its efforts from its cash reserves – estimated at €1.5 trillion last December.

But I think it's relatively peaceful over there on a continent-wide scale so they don't expend so much on war budgets as we seem to. No wonder they're in surplus all the time and have the energy, incentive and resources available to them for peaceful domestic use as well as for export.

Their standards of living I wouldn't say are lower but they tend to have lower expectations perhaps. They'll survive less supply because they demand less but fortunately for them they are not in that position so much.

I wonder what they'll spend their stimulus package on and when that's gone what they'll do then? This is how that article ends.

Quote :
The economic, and therefore political, centre of gravity of our planet is shifting to the South and East. Those companies and economies that have or develop goods and services to offer the new centres will thrive, those who pander to declining markets will atrophy. The new centres of our world are Asian and Latin American, not European. China and India are modest nuclear powers with impressive armed forces, but neither is expansionist, despite the desperate attempts of Washington’s drowning neoconservatives to whip up fear of “yellow perils”.

This recession will end. When it does, our societies will be different, and for the first time in human history, the position of the pivotal powers will depend more on their inventiveness than on their armed might. That’s a revolution we will have to work hard to get our heads around.
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PostSubject: The top 20 countries ranked by global military expenditure in 2007, in millions of constant 2005 US dollars   Mon Feb 02, 2009 8:01 pm


In 2006 Chinese military spending surpassed that of Japan for the first time, while as late as 1999, Chinese military spending was only half of that of Japan. (Source: www.sipri.org)

Global military expenditures for select countries in 2006, as percentage of gross domestic product (GDP)


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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Mon Feb 09, 2009 6:58 pm

http://money.uk.msn.com/mortgages/mortgageguide/article.aspx?cp-documentid=13911974

For anyone who thinks Dublin had the world's worst property boom: sorry folks, it ain't even in the top ten....
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Mon Feb 09, 2009 7:04 pm

That isn't exactly what that article is saying. That article is telling you the most expensive cities to buy property in the world. The city which had the largest boom is that which had the highest percentage increase in price. I doubt that is Dublin, but again, that is not what that article is saying, not even remotely. London was more expensive than Dublin to buy property in before this boom, during this boom, this bust, and will likely be in any future booms.
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PostSubject: Re: What's left after the Boom went Bust ? The Decline of the West and the Rise of the East   Mon Feb 09, 2009 7:18 pm

Indeed, but I also think, given that this is a financial services and property collapse, cities such as NY and London may suffer worse than ourselves. NY anyway, since Obama is capping banker's pay for definite, as far as I can understand. Any of the cities listed that are backed by net oil exporters (Oslo, Moscow) will probably be fine in the long term. London and NY will suffer a MAJOR correction. I doubt London will be anywhere near third most expensive city in 5 years time, put it that way. That implies a relative as well as absolute drop
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