The financial effects China has on the world economy
Before I get into China, allow me to point out that India was the richest country in the world until the British invaded them. With that said although China is the world’s largest economy, chances are India will eventually eclipse them as at the very least the best economy in Asia. China’s had a lasting effect on the worlds economy in a way most people don’t want to talk about. In my personal opinion and I’ve been saying this since 2009 China is due for a revolution, it’s also going to suffer if the Chinese Yuan ever appreciates.
Buying from China when it’s CHEAP!
In 2014 you’ll hear a lot from conspiracy theorists that if China becomes one of the world’s reserve currencies America is toast. This is complete nonsense if China becomes one of the world’s reserve currencies China’s CHEAP economy is toast. If the Chinese Yuan reached parity with the United States dollar what foreign business or individual in their right mind would manufacture goods from China? The way China has built it’s economy is building everything for less, building things for cheap. In this current economy as of 2014 the reality is because Western consumers have embraced debt in the forms of Car loans, lines of credits, credit cards, mortgages etc. Cheap goods made from China have actually been sold to consumers at a premium.
There was a time when the United States, Canada the U.K, France etc. made things and if you were a consumer living in those countries you would pay a premium based on the cost to make those goods. However with the creations of things like unions and other forms of job “security” etc. corporate business owners went overseas to see if they could get foreigners to make those same goods for less money and less liability.
Well China was the country that embraced this the most and their economy is now number one because of it. This was a good thing however now that consumers are deeply in debt and tapped out it’s the same thing biting China in the Arse now. China a money manipulator are complaining about the United States monopoly on money however if the United States didn’t have this monopoly on money, China would cease to exist.
Do the Chinese really want the Yuan to appreciate in value?
The dilemma facing China in the future is what will they do once the Yuan starts to appreciate in value? If they don’t allow the Yuan to appreciate in value inflation is going to drive that country nuts which from my standpoint means China is due for a revolution, the revolution that happened in Egypt, happened primarily because of money issues sure there were other things going on but when people are having a hard time making enough money to eat, the switch usually goes off, it’s one of the reasons why so many Americans suffer from obesity, America as a country has done everything it can to feed its children, You can go to the poorest areas of America and find obese Americans living in homes with running water and electricity. Is their poverty in America sure there is, but it doesn’t compare to poverty in China
Furthermore the people of China of been suppressed for a very long time with their communist government, Hong kong the part of China no one likes to talk about have demands of their own. My point here is the Chinese economy is on thin ice, where as a country like India fundamentally in the long term looks more stable in my opinion. The overall financial impact on a declining China to the worlds economy will hit Europe the hardest. Germany, the U.K, Switzerland maybe not so much, however countries like Spain, FRANCE, Greece of course and Italy I’m not saying they’ll crash but I wouldn’t invest too much in those countries if I were an investor.
France is socialism in action
There are certain things that sound good in theory but don’t work in practice, socialism is one of those things it’s a great idea the thought of doing nothing and expecting the hardworking or the rich to take care of you, or expecting the lazy and hardworking to be treated as economic equals, or even to expect a child born into riches to give all his wealth to less fortunate so everything could be fair for everyone! It’s a nice thought this thought of EQUALITY in everything.
However it’s not real life I have a friend who was born without legs he works his arse off and pays high taxes to help lazy people who don’t want to work any job because according to them the job isn’t fair or isn’t treating them right, these types of people also have no interest in going to school, starting a business, upgrading their working skills or bettering themselves.
These are the types of people that exist in the real world with or without government. These people will ALWAYS exist and it gets better because governments have subsidiaries in place when these types of people make babies. Kids typically learn from their parents so that cycle in many instances will usually multiply, then it gets better because politicians then appeal to these people because in time they’ll become the majority 75% tax on the rich sound familiar?
France is the big one, personally I think the only thing keeping France a float is the Euro! The worst part of France is the socialist mentality it’s rampant there and if China doesn’t serve the European union they way it was built too, all the b.s going on in the French economy will be exposed.
The Chinese Economic effect
The overall effect China had on the world economy is that it made everything cheaper, it didn’t help competition in the marketplace, China wiped out competition in the marketplace, Corporate BUYOUTS are normal now, China helped corporate businesses combat socialism and the entitlement mentality that swept the world after world war 2. China also helped create the world economy we live in today however I don’t know if they’ll reap the rewards of it in the near or distant future.
The fundamentals of the Chinese economy are weak, they’re not known for Quality like the Germans or Japanese for example and they’re very reliant on a weak Chinese Yuan which now that China is the world’s largest economy will be under threat. China is officially stuck in a balancing act! Raise the Yuan businesses will leave for CHEAPER pastures, keep the Yuan where it is and Inflation and hyper-inflation is inevitable, raise they Yuan slowly, and their economy will slow because of uncertainty, which is what’s happening in 2014.
It’s interesting that the world is in so much debt right now because if the Yuan starts to appreciate jobs will be forced to come to back to their respective homes because it will be too expensive to do business in China and not pass those prices on to consumers. More jobs in essence allows banks and financial institutions to issue more debt. Will China’s slowing economy cause a crash? Yes! I believe countries like France, Italy, Greece and Spain are in some serious trouble, Germany in my opinion is holding the Euro together and to be honest I don’t even know why. Maybe it’s the symbolism or the fear Germans have about how the world views them – you know with that whole Hitler thing
Currency was built to please consumers and this is why economically the United States is a giant amongst giants. The Chinese experiment is due for correction, people forget that China wasn’t meant to be a communist country, the plan all along was to turn that country into capitalists. China unlike some other countries aren’t as heavily influenced from religion, it’s there yes! But the Chinese in my opinion are more progressive in that regard which makes them more open to change.
I think the Chinese people eventually will determine their own destiny but this communist government in China is holding the country back and it’s only a matter of time in my opinion that China will experience a revolution. What kind of revolution? I have no idea! But changes will happen in China one way or another and these changes whether quiet, loud, fast or slow are going to cause a negative impact on countries that are weak fundamentally. There’s a difference between purchasing something from China because it’s cheaper or purchasing something from China because your country is reliant on China.