Of course, one social media is famous for talking about China's tofu bridges and houses collapsing, EVs on fire all over China, jobless and homeless people living on the pavements. What is ridiculous is that those are from people who never set foot in China, while those who visited, worked and lived in China are saying exactly the opposite. Who do we believe? Those in absentia or those on the ground? Take your pick.
There are plenty of news about USA buildings built on tofu bases that are sinking, so do not assume that laughing first is going to win. He who laughs last laughs best, so they say.
Imagine a debtor buying back its own debt. Can this really be possible. How come Japan did not do it after chalking up debt more that are 250% of its annual GDP. Japan could have mitigated its position by selling its Treasury holdings of more than a trillion. But Japan's testicles, or boobs now, are squeezed tightly by the USA, unable to move as a result of the pain. That is the price to pay for being a close friend of the USA. The closer the friendship, the tighter is the squeeze. China has no such inhibitions, selling its Treasuries like hot cakes now and then.
Anonymous
In any case, China did collapse many times before, during dynastic changes, foreign attacks, civil wars and Japanese occupation. Each time, China rose from the ashes like a phoenix. It did not, however, collapse under Gordon Chang's fairy tale. As I always say, a civilization does not collapse and disappear forever. It endures, find ways to overcome the odds, adapt and will not perish. China is fortunate not to be put under the thumb of anybody, unlike Japan, and is able to chart its own destiny.
ReplyDeleteIf the USA collapses, I think that is terminal. The US$40 trillion will wipe out its own citizen's retirement savings in retirement funds, property prices, hedge funds, banks, and kill off foreign investments into its debts forever. Of course, there will still be those 'stupidity without cure', who will continue to worship them. No fallen empires have historically managed to rise again - not the British, not the Germans, not the Spanish, not the Portuguese and not the Japanese. The Japs are still trying I believe, but to no avail.
Talking about Japan, all that stimulation and propping up the yen are measures resembling someone getting ready for sex but will end with a whimper afterwards, totally spent. It looks like Plaza Accord 2 is on the cards, that will kill off Japan for good. Unable to have financial sovereignty of its own, dictated to by the USA, warned by Scott Bessent against selling its USA Treasuries and yet complaining about the falling yen. Japan has exhausted all its efforts to prop up the falling yen. The first Plaza Accord was the straw that broke Japan's back, forever. The same move a second time will make it even worse. I do not think Japan is going to make that same disastrous mistake a second time.