esquire.
Distinguished Member
- Joined
- Feb 5, 2004
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Yeah, if you're willing, I'd like to learn more about it.As for China, they will need to allow the yuan to float soon, as keeping it artificially low is going to cause inflation soon. Â The reason it hasn't caused inflation yet is because the Chinese national bank is buying dollars (US Govt bonds) like it is out of style, but if their GDP growth slows at all, they are f*cked. Â Allowing the standard of living to deteriorate in China is the quickest way to cause a revolution, people have ignored the communist rulers for now because they are quasi-capitalist but start having double digit unemployment and a lower standard of living and hyper inflation, and you will see civil war. Â
BTW, as for your comment in the other board about Chinese military spending, a huge percentage of their GDP goes towards buying US govt bonds, in order to prevent inflation at home. Â The reasons for this are fairly complex economically, but I can walk you through it if you are interested.
I assumed that the reason the Chinese govt. bought so many bonds was to keep their current rate of growth. I heard that China has so many white elephant, state owned industries that employs millions of workers but will have to start letting these workers go. And, that they needed this hyper growth to act as a safety valve for all these workers, and not necessairly to prevent inflation.