Chinese Economics Thread

localizer

Colonel
Registered Member
I don't see how the US can contract just 7% for the year. Mathematically, that means a combined -28% all 4 quarters added up. Q1 was -5%. Q2 is something like -35% so that's about -40% right there. To get to -28%, that means Q3 and Q4 have to be average positive 6% each, and that's compared to 2019 Q3/Q4, not the disastrous quarters that just followed. When was the last time the US posted 6% for a quarter even in the healthiest economy? That's not to mention that it would be a massive achievement for the US to even begin to recover (>0%) in Q3 (or even Q4), which is very much in the air and looking worse as the pandemic in the US rages on. I don't see how they can confine all 4 quarters total to just -28%.


It's either gonna be another lock down from now on or people die and that takes down GDP.

Imagine all the fucked up lungs, kidneys, and hearts after this.
 

Rettam Stacf

Junior Member
Registered Member
I don't see how the US can contract just 7% for the year. Mathematically, that means a combined -28% all 4 quarters added up. Q1 was -5%. Q2 is something like -35% so that's about -40% right there. To get to -28%, that means Q3 and Q4 have to be average positive 6% each, and that's compared to 2019 Q3/Q4, not the disastrous quarters that just followed. When was the last time the US posted 6% for a quarter even in the healthiest economy? That's not to mention that it would be a massive achievement for the US to even begin to recover (>0%) in Q3 (or even Q4), which is very much in the air and looking worse as the pandemic in the US rages on. I don't see how they can confine all 4 quarters total to just -28%.

The latest IMF 2020 GDP forecast dated 2020 June (see my post #11742 in this thread for more detail) :
  • China +1%
  • US -8%
  • EU -10.2%
Given how the US Covid-19 infection turned for the worse in July, it will be difficult for the US to even make -8%.
 

Tyler

Captain
Registered Member
Oh don't. It's not for the faint hearted! It is just a glorify gambling den.

@localizer

I personally think China needs to get rid of its dollars and appreciate the yuan so Chinese can consume their own products.

If we appreciate Yuan to $6/USD, we should be over US GDP this year.

Patients my friend. Just as sure the sun will rise in the morning, El passo will come.
They should just sell US treasuries gradually and issue appropriate amounts of RMB bonds.
 

Tam

Brigadier
Registered Member
China needs to first sell its US bonds to the Fed and buy $4T of gold and whatever is cheap nowadays.

Since US won't sell China engines, research stuff, and chips, China has no need for dollars.

Not only is China buying gold but Chinese consumers are buying gold. I expect a lot of Chinese that bought foreign properties, bonds and stocks to start selling them and buying gold instead.

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China has been gradually selling off US Treasury bonds and buying up gold mines everywhere. Lately from Canada and Central Asia. China is already the biggest gold producer and keeps most of what it produces with some exports to Hong Kong.

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China hoarding gold is that its preparing to back the Yuan or a digital Yuan with gold.
 

localizer

Colonel
Registered Member
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@Tam

Chinese are starting to wake up to the dollar liability.

“The US dollar could become a major risk issue that ‘has us by the throat’.”

In a brief outline presented separately by Nikkei, Zhou's position is that the Chinese
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:
1. For the deterioration of Sino-U.S. relations and the full escalation of the struggle.
2. To cope with shrinking external demand and a disruption of supply chains.
3. For a new normal of coexisting with the novel coronavirus pandemic over the long term.
4. To leave the dollar hegemony and gradually realize the decoupling of the yuan from the dollar.
5. For the outbreak of a global food crisis.
6. For a resurgence of international terrorism.
Again, such a grim position forecasting isolation is nowhere near the official Chinese Communist Party line, but represents a predicted necessary future reaction to full-blown long lasting conflict with the US.

I'm also diversifying my portfolio to escape dollar problems down the line.
 

Tyler

Captain
Registered Member
China needs to first sell its US bonds to the Fed and buy $4T of gold and whatever is cheap nowadays.

Since US won't sell China engines, research stuff, and chips, China has no need for dollars.
They still need some $US to buy oil. But Russia and Turkey are decoupling from the $US already. More currency swaps agreement need to be done with their main trading partners.
 
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