Lehman failed because it was deemed not to be too big to fail; it was not bailed out, defaulted on $700B of debt obligations, and threw billions of subprime-rated securities onto the market. This forced everyone else to mark their similar securities to the nonexistent market. None of this would happen in China unless the PBOC (the Politburo) wished it to happen. The PBOC has unlimited resources in Yuan and $3.2 trillion in FX reserves.
How would you compare China's economy with America's in terms of the immediate future, especially with the UN Lawyer's continual successes (no matter how unconstitutional).
I tend to be more pessimistic about China because many of the driving forces behind their economic decline have been "baked in". Also, the one thing any modern economy needs to function--access to energy--China has achieved only through imports of oil, two thirds of which has to come through the Strait of Malacca. That's a strategic and economic vulnerability for which China has no answer and is not going to have an answer in the foreseeable future.
The US can, with effort, reverse its economic stagnation. The US can still opt for reduced regulation, reduced burdens imposed by the State, and increased economic freedom.
China has never had that option. China can't liberalize their economy without liberalizing their politics, and the CCP can't liberalize their politics and remain in power.
China is trapped in authoritarianism, while the US still has hope of escape.
Also, at the moment China seems to be out in front in the global race to the bottom. The US may be in last place--which is the position I think in which I would want to be--figure last place means last country standing.
That being said, the US is on a path of stagnation and economic decline as well. Europe is locked in attritional economic war with Russia, and it's a coin toss which side will prevail. India appears to be making something of an inward turn politically, which will likely help drive future industrialization by India while detaching them somewhat from the global economy. Taken as a whole, there are no economic actors in the world today in a position to replace the US as the dominant economic power.
Strangely enough, China's decline is likely to be beneficial to the US in the long term. Not only does the decline mean recent trends towards nearshoring will continue, but a declining yuan keeps the dollar at the top of the reserve currency pile. A declining China dampens the economic prospects for the BRICS nations. If China's decline continues to outpace America's, by mid-century the US will be in an even more economically dominant position than it has been previously, at least in relative terms.
On the other hand, if Wall Street stumbles into another banking crisis, and if Washington fumbles their response, the US economy could be thrust into a major economic crisis ahead of anyone else. That would put the US at the front of the pack in the global race to the bottom.
The constant caveat in all of this is that these are all conditional hypotheticals. Each scenario presumes a particular trend or set of trends extends well into the future. If a trend changes, so does the outcome.
"The US can, with effort, reverse its economic stagnation."
Yep, it will take a superhuman effort, and a bit of watering the tree of liberty, preferentially by the people for who this effort is reserved, the government does not have a monopoly on violence except during times of peace, which we are obviously not at, with the blood of tyrants and patriots.
Speaking of optimism and pessimism. Too high a percent of Earth's population is pessimistic. The tell is a declining birth rate. Fewer people mean lower demand for money. That tells me that now is good time to buy long term, investment grade bonds.
Lehman failed because it was deemed not to be too big to fail; it was not bailed out, defaulted on $700B of debt obligations, and threw billions of subprime-rated securities onto the market. This forced everyone else to mark their similar securities to the nonexistent market. None of this would happen in China unless the PBOC (the Politburo) wished it to happen. The PBOC has unlimited resources in Yuan and $3.2 trillion in FX reserves.
Serves 'em right. Though I do feel sorry for the rank and file citizens who are stuck living under that regime.
How would you compare China's economy with America's in terms of the immediate future, especially with the UN Lawyer's continual successes (no matter how unconstitutional).
Good question. Tough question.
I tend to be more pessimistic about China because many of the driving forces behind their economic decline have been "baked in". Also, the one thing any modern economy needs to function--access to energy--China has achieved only through imports of oil, two thirds of which has to come through the Strait of Malacca. That's a strategic and economic vulnerability for which China has no answer and is not going to have an answer in the foreseeable future.
The US can, with effort, reverse its economic stagnation. The US can still opt for reduced regulation, reduced burdens imposed by the State, and increased economic freedom.
China has never had that option. China can't liberalize their economy without liberalizing their politics, and the CCP can't liberalize their politics and remain in power.
China is trapped in authoritarianism, while the US still has hope of escape.
Also, at the moment China seems to be out in front in the global race to the bottom. The US may be in last place--which is the position I think in which I would want to be--figure last place means last country standing.
That being said, the US is on a path of stagnation and economic decline as well. Europe is locked in attritional economic war with Russia, and it's a coin toss which side will prevail. India appears to be making something of an inward turn politically, which will likely help drive future industrialization by India while detaching them somewhat from the global economy. Taken as a whole, there are no economic actors in the world today in a position to replace the US as the dominant economic power.
Strangely enough, China's decline is likely to be beneficial to the US in the long term. Not only does the decline mean recent trends towards nearshoring will continue, but a declining yuan keeps the dollar at the top of the reserve currency pile. A declining China dampens the economic prospects for the BRICS nations. If China's decline continues to outpace America's, by mid-century the US will be in an even more economically dominant position than it has been previously, at least in relative terms.
On the other hand, if Wall Street stumbles into another banking crisis, and if Washington fumbles their response, the US economy could be thrust into a major economic crisis ahead of anyone else. That would put the US at the front of the pack in the global race to the bottom.
The constant caveat in all of this is that these are all conditional hypotheticals. Each scenario presumes a particular trend or set of trends extends well into the future. If a trend changes, so does the outcome.
You are the eternal optimist! I like that, a lot.
"The US can, with effort, reverse its economic stagnation."
Yep, it will take a superhuman effort, and a bit of watering the tree of liberty, preferentially by the people for who this effort is reserved, the government does not have a monopoly on violence except during times of peace, which we are obviously not at, with the blood of tyrants and patriots.
Speaking of optimism and pessimism. Too high a percent of Earth's population is pessimistic. The tell is a declining birth rate. Fewer people mean lower demand for money. That tells me that now is good time to buy long term, investment grade bonds.
There are other reasons for that besides pessimism, to be sure. But pessimism does seem to be a very significant reason.
Actually, it's not optimism. It's simple math.
The anti authoritarians still have more guns and more numbers.
Those are good odds.