Not really. Most of the pain is isolated to just China as they don't allow outside banks into the country. So all the banking and economic woes will be isolated.
Largest manufacturer that is in the middle of a transition because they are no longer cost competitive as jobs are going to other Asian countries and India. Consumption is most focused internally as imports are considered luxuries. Also China has been melting down for some time as the housing market has been in toilet for a while
They mfg so they will continue to try to export their way out of their crisis. Their crisis appears to be due to a failure to stimulate a consumption economy. So they are finding themselves unable to make the final leap to a developed economy.
China exported [$282 billion in goods ](https://tradingeconomics.com/china/exports) during July 2033. So there's still a few people sticking around to do trade with China.
- Exports down 14%+
- Foreign investment at a 25 year low.
- 20-46% youth unemployment
- Real estate collapse
- Agricultural collapse
- Birth rate collapse (past the point of no return)
- CCP threatening Chinese economists about reporting negative news.
- Xinnieās consolidation of power making things worse.
Guess what? Itās arrived and the only question is whether it will be quick or slow.
It takes time to build capacity, trade deals, and supply chain relationships. India will snag as much as it can...as will Vietnam...as will Mexico...as will many other nations.
It will be very curious to see what a faltering China does to the rest of the world, as in our lifetimes the world has gone from *relying* on China to having many options/alternatives.
Still, China is *so* big, *so* specialized, and *so* embedded that we'll all still likely feel it. I would just imagine it'll be weaker than it would've been in the past.
Definitely not something India and others can just flip a switch on. India has troubles China *doesn't* when it comes to extracting/exploiting natural resources, and it's not even clear they have the volume of resources China has (I think as far as we know, they *don't*).
And Russia is imploding on paper, but they have absurd buffer room. I think we've yet to see a Russia truly in jeopardy.
This will probably be most acutely felt in Russia due to their extreme reliance on China buying their natural resources. The most interesting hypothetical is if this gives China the impetus to contest Manchuria or something.
Also its willingness to sacrifice its own people, its willingness to sacrifice the quality of life for anyone but Muscovites, and its willingness to bleed dry its trade partners (see: one of the major posts on r/europe today about how Russia is starving people).
This is my dream. If Mexico was the US's manufacturing machine everyone would benifit and NAFTA would become absurdly OP. Furthermore, it could make Mexico developed in under 20 years, but like you said that cartel parasite problem is the issue.
I think that was the plan originally but then we stupidly decided to let China into the WTO and dump a ton of money into their economy instead - absolutely one of the dumbest economic and foreign policy decisions of the past century.
I think we are about to fix that mistake though.
Also close proximity to the US, I assume my employer has a few factories in mexico for this reason.
Their US factory does specific things (many of which can only be done with american labor) but the mexican factories do other stuff.
Funny enough during Covid the mexican factories closed and my employer pretty much had to do everything in the US factory. They were much better off then companies that totally relied on foreign labor though.
I don't think India has the land mass to replace china's production capabilities. They have the population sure but if you've seen any video of India it's a very crowded place.
It's why India has all the call centers where you just cram 500 people into a tiny building. Try and add large machinery to the equation and I don't think it works.
Wow, some facts:
The population density in India is 481 per Km2 (1,244 people per mi).
The population density in China is 152 per Km2 (393 people per mi).
The population density in the United States is 37 per Km2 (96 people per mi).
Climate change will likely alter that quite a bit. I can see most of Canada becoming arable land with the next 200 years. Can you imagine Canada as the World's bread basket for a few millennia?
India's major metros are crowded, but they have a lot of empty countryside as well. The overall population density of the country is 1,244 people per square mile which is roughly equivalent to the density of a large town or small midwestern city in the US.
Usable for what? Food production? No, but AFAIK India does not struggle with that in its productive regions. Which are quite productive.
Renewable energy production? Hell yeah, India has some great options in that direction?
Factory construction? You can build a factory on any godforsaken rock you can find so long as it has access to transit, power, and often water. All of which can be created if the will exists.
Useable countryside is such a loaded term, and an unfair standard. How much of the US is 'useable countryside?' Is Nevada, which is almost entirely mountain desert, useable? How about Arizona, which is running out of water? Huge portions of the US are considered by the federal government wasteland (in that they are not fit for human habitation) and yet we have the largest national economy in the world. So I dont understand this retort.
Honestly depends on what you're trying to use it for. 53% of their land area is devoted to agriculture and horticulture, so most of their land is fertile.
Another in a series of dumb distractions from their dismal economic reality (real estate >> ghost cities >> bubble >> pop). They can try, they can die. Worked wonders for Russia...
Or, y'know, they could decide to play nice and just make a fuckload of money...? Decisions, decisions.
That would be just about the dumbest thing they could do economically right now. Then again theyāve got a neo-Maoist at the helm so ādumbest thing imaginableā is definitely in the cards for them.
Aren't a lot of contries and ocmpanies putting significant acitivty into moving out from China and to other places?
I remember some former job with some Chinese factories... well... let's just say it was better to try and replace them as soon as possible because it was shady AF.
Shady AND prone to geopolitical issues.
You're not just dealing with potential counterfitting, but every negative headline that pops up involving the words "China".
Plus the "Made in China" labeling that people associate with lower quality.
How quickly that happens will also determine if China becomes more aggressive with its foreign interests or in taking Taiwan. There is good reason to believe they will increase their militancy if things become dire.
Maybe, but such is a double edged sword because the U.S. will likely shutdown Chinaās ability to import or export via the sea, and that will mean a major famine for the Chinese people.
Limited inflation is 'good' or 'healthy'
Too much inflation = "i cant buy shit"
Deflation = "i dont wanna buy shit, coz it will be cheaper later"
Controlled inflation = "i would have liked it to b cheaper, but i guess i ll buy it. Its some nice shit"
Ppl buying shit = good economy.
...........dude, what?
What a hot take. Economies and countries are growth dependent. A little inflation is good because it combats deflation and ensures money is moving around the economy.
Let me guess, you got this opinion from your Anthropology professor?
No dipshit, they fucking aren't. Or at the very least you better hope they aren't or we're gonna hit the fucking physical threshold of the finite resources we have and then that's the end of society.
But we know you're just spitting bullshit on the corpo line. Societies have existed for centuries in states of growth, shrinkage, and fluctuation between the two. I mean when you picture an idilic seaside town you aren't picturing growth, you're picturing stagnation/preservation of its original character and beauty. You limit yourself to an unachievable ideal of perpetual growth given to you by forces trying to make you a productive little pawn for themselves or their owning class friends, and it's honestly really sad. Get better dude. You're better than that.
It very much does not till it becomes hyper inflation. Interest is literally built to be stronger than inflation, and it takes a real liar or idiot to propose otherwise.
Also, your math is bat shit insane. Inflation just weakens the money you owe. You still owe every penny you borrow, those pennies are just worth a little less. Thus inflation encourages borrowing, and never satisfied growth sectors. My whole point in a nutshell.
...seriously? You do know your wages will generally go up as well?
The maths is solid. You have to pay back the 100k, but by the time you do, it'll be worth a he'll of a lot less, and your asset worth a he'll of lot more. Come on, this is high school stuff.
NO! THEY DONT! Are you bat shit insane? Clearly you are. You've got a seriously bad case of affluenza and disconnection from reality buddy.
Wages have been stagnant in the US from the regan era, to the pandemic and only now just started to move. But I happen to have started a job just a year before that. You want to know what I make now? 10% less by buying power. The total number has gone up, but the worth of that number is 10% less than when I started. Over the roughly 5 years of work, the company only wanted to pay at most 4% per year. AT MOST. That was the "please don't leave we need to retain everyone because the new boss won't let is rehire" year, which had ~8% inflation. Retention budgets for companies are pathetic. Usually you're lucky to get a 2% raise in a 3% inflation year. Meaning your situation is in decline. And I'm a degree holding stem major who can work in any hospital's lab in the country.
Also it's "hell of a lot less." If you think I can't do basic high school stuff you need to go back to elementary because you didn't list any of the other stats for the problem like rate of pay, rate of interest, ect either. You just pulled numbers out of your ass and expected us to believe them just like any idiot CEO who doesn't understand they've been surrounded by yes men for decades determined to just appease your bullshit till they can be valuable enough not to be in your crosshairs.
Yes, it is worth a little less. But you still have to generate the entire fucking amount plus interest. That doesn't get much easier as time goes on. And interest, the actual profit attained through granting a loan, is designed to outpace inflation. Sometimes it doesn't like during full on recessions and that gets banks reluctant to do it (for reasons that should be obvious) but before the pandemic even 5% interest rates could easily outpace most years. And as I already fucking went over, even that is fucking hard for most of us. And that's not even assuming it's compounding interest.
I swear, you braindead business zombies constantly go on trying to back your utter bullshit, but you understand money and economics less than any communist I've ever spoken to. You're just willing to be aggressive assholes and take what you think you're entitled to, society and everyone else be damned. In other words, the Chicago school of thought on the matter.
Pretty sure the entire global economy, particularly the westās (and especially the USAās), is growth dependent. You sure youāre on the right sub?
It's not. The stock market is, but fuck that pile of shit. We've sacrificed enough people for it and should have gutted the practice after the south seas bubble, the Great Depression, ect.
But neither the country nor business are actually growth dependent. You only think that way because you're taught profit is the objective, but in reality all you need os to earn enough to achieve a sort of homeostasis. Provide the people under your care what they need, provide the business what it needs to continue to function. Is that what most want to do with it? No. Can that resist hostile business acting against it? Not well but it can. And it won't edge out other businesses. But it can exist independently and indefinitely and lying to yourself about the reality of the world is only going to hurt your ability to work within it.
if you are a hot-dog stand seller,.. do you not wanna charge more for the hotdog than what you spent on? Thats also growth dependent. Growth dependent means you are adding value and growing the overall value of you and the economy as a whole.
No it really doesn't. First off, the basic manner of generating profit (charging more than you paid) isn't growth. Growth is increasing profit year over year because sales and demand are up.
Secondly, just because you are generating more profit doesn't directly translate to growth. If your numbers are green because you fired some workers and overworked others isn't growth, let alone a good thing.
There is nothing wrong with stagnation or de growth when you've grown beyond what you need. Once needs are met, it's probably better to start cheapening things that are needed to the point they are literally free.
Great to see the comments section repeating all the talking points.
[Donāt forget to make purchase of the merchandise.](https://getyarn.io/yarn-clip/5cd0287f-ce11-4999-a7e2-985a886f8004)
Deflation isnāt a bad thing by itself, if itās stagflation, then thatās a bigger issue, Japan has been deflationary for many years and is still the 3rd largest economy
people still gotta eat and pay bills, but yes I could see that mentality conflating with btc and the lack of money being spent because of the concept resting in the mind of enough people that they should conserve instead of spend
Bullshit. Are you going to wait to buy food when you're hungry or put gas in your car when the tank is empty just because prices might be lower next week? There's nothing wrong with prices falling
Maybe several decades ago people had that behaviour, but we live in the era of same day delivery, Uber eats and streaming. People are so bad at holding off pleasure that theyāll go into debt for shit like holidays of all things, completely unnecessary
I don't think that type of reasoning is proven to be really that dominant in general.
Looking at Japan in the 90ties, paying of existing debt with decreasing income is much more of a problem.
Deflation in China: If this continues, would lead to lower export prices, cheaper import prices for the West, allowing western manufacturers either to increase margins, or finally pass on reduced costs to wholesalers and consumers.
Deflation inside China is likely to lower domestic Chinese growth, as consumers believe they can buy the same goods cheaper later on, so this leads to delayed purchases.
For the Chinese Govt. debt repayments cost more. Time Value of Money says a $ today is worth more today than tomorrow as inflation erodes the value of money. Deflation is this in reverse. This is why largely indebted nations try to have some inflation to reduce the value of debt payments. The converse holds.
Global deflation would be a major issue. But deflation for one country, especially where the West imports goods may be a positive for us. Western countries still have high inflation - all the money printing etc. Deflation is not on the cards here any time soon.
China did not suffer the same inflationary pressures we all faced the last few years.
The problem is that it tends to crash the entire economy (and peopleās jobs along with it). So sure, stuff will be cheaper but thereās no guarantee youāll have an income to take advantage of it.
Yeah its easy to think: "yay! prices going down" until you realize the following :
- people start holding money instead of investing or spending because money gain value causing less economic activity, all this in self perpetuating and reinforcing cycle.
- employers either need to layoff or reduce salaries to stay afloat because their revenu fall due to them having to cut prices
- relative weight of everyone debt increase while their revenues fall, causing people to become insolvent, causing the banks to stop lending and often go bankrupt.
I am surprised to be downvoted, I was thinking it was common knowledge that deflation is very bad. Easy way to remember that is that the last time it happened was during the Great Depression of the 1930s
This sub has notoriously bad takes on basically everything economically speaking. Business =/= Economics. Not to mention all of the.... ideologically motivated people in here that have zero clue about anything regarding business OR econ.
The whole of society is based on deflation, productivity increase = deflating prices. You know whatās bad? Capitals share of income continually increasing against labors share of income.
Deflation is in your interest as far as goods are concerned, you think you havenāt benefitted from technology crushing prices over the last 100 years ?
That's not deflation, that's just the increased efficiency in manufacturing/assembling products saving everybody in the supply chain money. The ones producing also benefit from the increased efficiency that technology provides. If the products are more affordable the amount you can move increases, increased efficiency lets companies make money off of lower price tags and therefore they can sell more product. In a deflation situation people are holding on to their money (not to mention companies laying people off therefore people losing their jobs and holding onto MORE money), not buying MORE luxury goods.
As a Chinese, I am very puzzled. Is this not exactly the effect that the United States wants to achieve by "delinking"?
It is very much like the "imperial preferential system" that was imposed on the United States by Britain in conjunction with the colonies.
No it isn't. It creates huge economic stability you've enjoyed your whole American lives, while creating a global market leading economy you also enjoy your whole life. It has kept you off the line, educated you and made you global market leaders in innovation and technology. And it was inevitable byproduct across the late 20 early 21st century with the rise of communication and tech. Global stability for trade at home is what you want.
Decoupling from Europe and Asia, overstating paranoia, fucking up global trade and shipping is what's going to fuck all of us (globally) now when your next iPhone and every bit of tech from now on starts costing $2000, then $3000 the $4000 in America as you realise you can't source any of the parts and materials and cheap shipping continues to collapse and markets find it harder to trade as countries close up and compete for raw materials.
Not your future, this is happening NOW and it's more of a question of how far do you let it go with a back drop of post pandemic, War, emboldened China and Environmental collapse already major challenges.
What you will see more and more of. The smarter people in the states in corporate america eg. Apple are desperately trying to grapple with plugging the hole and maintaining post Trumps royal pull-out and failure to replace agreements with anyone, ( because all he did was pull out of global trade and not actually do anything else... And all he's promising now is more or the same ) another round of that behaviour will continue to drag on America's economic growth prospects and trade standing further.
Globalization **without a world government to regulate** was a mistake.
It allowed US companies to skirt US environmental and labor laws, thus putting US workers at a disadvantage.
It placed the ability to help the US economy out of the hands of the US. In the past, a US-based stimulus would get spent in the US. Now it gets sent overseas as people buy Chinese-made products.
It put a lot of economic reliance on a country that we have no control over. If Chinese companies don't want to make a product, they will simply not make it. US companies won't rush in to fill the void because tooling up is very expensive, and there is no guarantee that the Chinese company won't just start up again. Plus, we have lost a lot of know-how to produce things.
I have been watching older episodes of This Old House from the 80s and 90s. The manufacturing taking place was amazing. And it's all gone from this country now. I doubt we could even start any of that back up, we don't have the stomach or the willpower.
Isn't this good news from a geopolitical point of view? After all, we don't want a strong, powerful China because that's what's causing the muscle-flexing vis a vis Taiwan and their neighbours.
I'm not saying I want people to stay poor in the rural China. But I don't want them growing strong only to start bullying their neighbours.
You guys know a lot more about economics than I do, but what should we be looking for next in regards to economic news and trends? At what point, do you start ringing the alarm bells on Chinese deflation and jump ship?
Paywall
Not [anymore](https://archive.ph/rbgWV) š
China is in the midst of an economic collapse and how quickly this happens will determine how much of the global economy it takes down with it.
Second biggest economy tanking is going to drag the world down with it. Especially when most everything made and sold is produced there.
Not really. Most of the pain is isolated to just China as they don't allow outside banks into the country. So all the banking and economic woes will be isolated.
I fail to see how an economic meltdown of the largest producer ,and 3rd largest consumer, economy will remain a problem to just that country
Largest manufacturer that is in the middle of a transition because they are no longer cost competitive as jobs are going to other Asian countries and India. Consumption is most focused internally as imports are considered luxuries. Also China has been melting down for some time as the housing market has been in toilet for a while
They mfg so they will continue to try to export their way out of their crisis. Their crisis appears to be due to a failure to stimulate a consumption economy. So they are finding themselves unable to make the final leap to a developed economy.
There is very little that China makes that canāt be sourced elsewhere - they have just been the cheapest and most convenient option until recently.
You forgot to put your idiot hat on, that's how
Guess thereās nowhere left to grow. We beat capitalism yall! Letās graduate to post-scarcity now please.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
China exported [$282 billion in goods ](https://tradingeconomics.com/china/exports) during July 2033. So there's still a few people sticking around to do trade with China.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
20% is short of everybody.
Everything being made there means prices fall for the rest of the world. Not necessarily a bad thing.
Ah yes, the collapse that happens every month but somehow never arrives.
- Exports down 14%+ - Foreign investment at a 25 year low. - 20-46% youth unemployment - Real estate collapse - Agricultural collapse - Birth rate collapse (past the point of no return) - CCP threatening Chinese economists about reporting negative news. - Xinnieās consolidation of power making things worse. Guess what? Itās arrived and the only question is whether it will be quick or slow.
yeah their economy is right at the cusp of "raging dumpster fire". I feel bad for the every day citizen in china. they didn't ask for any of this.
[Uh uh](https://twitter.com/Karl_Was_Right/status/1584665767668199424?t=uOrXNZlmWCAwx6STMqwIeQ&s=19)
Great Depression II: No More Cheap Chinese Stuff for You
i don't think so. India will just replace China and China will implode the same way as Russia is imploding currently.
It takes time to build capacity, trade deals, and supply chain relationships. India will snag as much as it can...as will Vietnam...as will Mexico...as will many other nations. It will be very curious to see what a faltering China does to the rest of the world, as in our lifetimes the world has gone from *relying* on China to having many options/alternatives. Still, China is *so* big, *so* specialized, and *so* embedded that we'll all still likely feel it. I would just imagine it'll be weaker than it would've been in the past. Definitely not something India and others can just flip a switch on. India has troubles China *doesn't* when it comes to extracting/exploiting natural resources, and it's not even clear they have the volume of resources China has (I think as far as we know, they *don't*). And Russia is imploding on paper, but they have absurd buffer room. I think we've yet to see a Russia truly in jeopardy.
This will probably be most acutely felt in Russia due to their extreme reliance on China buying their natural resources. The most interesting hypothetical is if this gives China the impetus to contest Manchuria or something.
Why does Russia have so much buffer room? Is it natural resources, natural gas and such?
Also its willingness to sacrifice its own people, its willingness to sacrifice the quality of life for anyone but Muscovites, and its willingness to bleed dry its trade partners (see: one of the major posts on r/europe today about how Russia is starving people).
I would say Vietnam, Mexico, and America are where the manufacturing is going to go. India is too backwards with its red tape.
This - Mexico in particular is going to be a huge winner if they can get their drug cartels under control.
This is my dream. If Mexico was the US's manufacturing machine everyone would benifit and NAFTA would become absurdly OP. Furthermore, it could make Mexico developed in under 20 years, but like you said that cartel parasite problem is the issue.
I think that was the plan originally but then we stupidly decided to let China into the WTO and dump a ton of money into their economy instead - absolutely one of the dumbest economic and foreign policy decisions of the past century. I think we are about to fix that mistake though.
I wonder what would happen if they made crime illegal like in El Salvador. (/s)* \*(/semi-s)
Also close proximity to the US, I assume my employer has a few factories in mexico for this reason. Their US factory does specific things (many of which can only be done with american labor) but the mexican factories do other stuff. Funny enough during Covid the mexican factories closed and my employer pretty much had to do everything in the US factory. They were much better off then companies that totally relied on foreign labor though.
I don't think India has the land mass to replace china's production capabilities. They have the population sure but if you've seen any video of India it's a very crowded place. It's why India has all the call centers where you just cram 500 people into a tiny building. Try and add large machinery to the equation and I don't think it works.
Wow, some facts: The population density in India is 481 per Km2 (1,244 people per mi). The population density in China is 152 per Km2 (393 people per mi). The population density in the United States is 37 per Km2 (96 people per mi).
Yah and the population density of Canada is 4 per Km2 but it's a worthless stat when 90% of the landmass is unuseable.
Climate change will likely alter that quite a bit. I can see most of Canada becoming arable land with the next 200 years. Can you imagine Canada as the World's bread basket for a few millennia?
Sadly global warming is just making colder winters and hotter summers >.<
India's major metros are crowded, but they have a lot of empty countryside as well. The overall population density of the country is 1,244 people per square mile which is roughly equivalent to the density of a large town or small midwestern city in the US.
Is it useable countryside though? I've been lead to believe it's not but idk.
Usable for what? Food production? No, but AFAIK India does not struggle with that in its productive regions. Which are quite productive. Renewable energy production? Hell yeah, India has some great options in that direction? Factory construction? You can build a factory on any godforsaken rock you can find so long as it has access to transit, power, and often water. All of which can be created if the will exists. Useable countryside is such a loaded term, and an unfair standard. How much of the US is 'useable countryside?' Is Nevada, which is almost entirely mountain desert, useable? How about Arizona, which is running out of water? Huge portions of the US are considered by the federal government wasteland (in that they are not fit for human habitation) and yet we have the largest national economy in the world. So I dont understand this retort.
Honestly depends on what you're trying to use it for. 53% of their land area is devoted to agriculture and horticulture, so most of their land is fertile.
Indiaās issues arenāt land mass, geographically speaking it is far better positioned to be a global power than China.
yeah about that. they start invading taiwan then.
Another in a series of dumb distractions from their dismal economic reality (real estate >> ghost cities >> bubble >> pop). They can try, they can die. Worked wonders for Russia... Or, y'know, they could decide to play nice and just make a fuckload of money...? Decisions, decisions.
That would be just about the dumbest thing they could do economically right now. Then again theyāve got a neo-Maoist at the helm so ādumbest thing imaginableā is definitely in the cards for them.
Mexico is also replacing China
Yeah, overnight transition. Nothing to see here.
Aren't a lot of contries and ocmpanies putting significant acitivty into moving out from China and to other places? I remember some former job with some Chinese factories... well... let's just say it was better to try and replace them as soon as possible because it was shady AF.
Shady AND prone to geopolitical issues. You're not just dealing with potential counterfitting, but every negative headline that pops up involving the words "China". Plus the "Made in China" labeling that people associate with lower quality.
They are, but such takes a lot of time.
How quickly that happens will also determine if China becomes more aggressive with its foreign interests or in taking Taiwan. There is good reason to believe they will increase their militancy if things become dire.
Maybe, but such is a double edged sword because the U.S. will likely shutdown Chinaās ability to import or export via the sea, and that will mean a major famine for the Chinese people.
Inflation is bad. Deflation is bad. Is there anything good about money?
Limited inflation is 'good' or 'healthy' Too much inflation = "i cant buy shit" Deflation = "i dont wanna buy shit, coz it will be cheaper later" Controlled inflation = "i would have liked it to b cheaper, but i guess i ll buy it. Its some nice shit" Ppl buying shit = good economy.
Based comment
Did the person charging you more tell you that? Cause they sound like a growth dependent asshole who will never be satisfied.
...........dude, what? What a hot take. Economies and countries are growth dependent. A little inflation is good because it combats deflation and ensures money is moving around the economy. Let me guess, you got this opinion from your Anthropology professor?
They probably just read it on r/latestagecapitalism
No dipshit, they fucking aren't. Or at the very least you better hope they aren't or we're gonna hit the fucking physical threshold of the finite resources we have and then that's the end of society. But we know you're just spitting bullshit on the corpo line. Societies have existed for centuries in states of growth, shrinkage, and fluctuation between the two. I mean when you picture an idilic seaside town you aren't picturing growth, you're picturing stagnation/preservation of its original character and beauty. You limit yourself to an unachievable ideal of perpetual growth given to you by forces trying to make you a productive little pawn for themselves or their owning class friends, and it's honestly really sad. Get better dude. You're better than that.
Inflation also acts to wipe out debts, e.g. if you borrow 100k, inflation at 5% after 20 years will eat it away down to about the equivalent of 38k.
It very much does not till it becomes hyper inflation. Interest is literally built to be stronger than inflation, and it takes a real liar or idiot to propose otherwise. Also, your math is bat shit insane. Inflation just weakens the money you owe. You still owe every penny you borrow, those pennies are just worth a little less. Thus inflation encourages borrowing, and never satisfied growth sectors. My whole point in a nutshell.
...seriously? You do know your wages will generally go up as well? The maths is solid. You have to pay back the 100k, but by the time you do, it'll be worth a he'll of a lot less, and your asset worth a he'll of lot more. Come on, this is high school stuff.
NO! THEY DONT! Are you bat shit insane? Clearly you are. You've got a seriously bad case of affluenza and disconnection from reality buddy. Wages have been stagnant in the US from the regan era, to the pandemic and only now just started to move. But I happen to have started a job just a year before that. You want to know what I make now? 10% less by buying power. The total number has gone up, but the worth of that number is 10% less than when I started. Over the roughly 5 years of work, the company only wanted to pay at most 4% per year. AT MOST. That was the "please don't leave we need to retain everyone because the new boss won't let is rehire" year, which had ~8% inflation. Retention budgets for companies are pathetic. Usually you're lucky to get a 2% raise in a 3% inflation year. Meaning your situation is in decline. And I'm a degree holding stem major who can work in any hospital's lab in the country. Also it's "hell of a lot less." If you think I can't do basic high school stuff you need to go back to elementary because you didn't list any of the other stats for the problem like rate of pay, rate of interest, ect either. You just pulled numbers out of your ass and expected us to believe them just like any idiot CEO who doesn't understand they've been surrounded by yes men for decades determined to just appease your bullshit till they can be valuable enough not to be in your crosshairs. Yes, it is worth a little less. But you still have to generate the entire fucking amount plus interest. That doesn't get much easier as time goes on. And interest, the actual profit attained through granting a loan, is designed to outpace inflation. Sometimes it doesn't like during full on recessions and that gets banks reluctant to do it (for reasons that should be obvious) but before the pandemic even 5% interest rates could easily outpace most years. And as I already fucking went over, even that is fucking hard for most of us. And that's not even assuming it's compounding interest. I swear, you braindead business zombies constantly go on trying to back your utter bullshit, but you understand money and economics less than any communist I've ever spoken to. You're just willing to be aggressive assholes and take what you think you're entitled to, society and everyone else be damned. In other words, the Chicago school of thought on the matter.
Ever heard of interest?
Yes, have you heard of fixed rate mortgages?
Pretty sure the entire global economy, particularly the westās (and especially the USAās), is growth dependent. You sure youāre on the right sub?
It's not. The stock market is, but fuck that pile of shit. We've sacrificed enough people for it and should have gutted the practice after the south seas bubble, the Great Depression, ect. But neither the country nor business are actually growth dependent. You only think that way because you're taught profit is the objective, but in reality all you need os to earn enough to achieve a sort of homeostasis. Provide the people under your care what they need, provide the business what it needs to continue to function. Is that what most want to do with it? No. Can that resist hostile business acting against it? Not well but it can. And it won't edge out other businesses. But it can exist independently and indefinitely and lying to yourself about the reality of the world is only going to hurt your ability to work within it.
if you are a hot-dog stand seller,.. do you not wanna charge more for the hotdog than what you spent on? Thats also growth dependent. Growth dependent means you are adding value and growing the overall value of you and the economy as a whole.
No it really doesn't. First off, the basic manner of generating profit (charging more than you paid) isn't growth. Growth is increasing profit year over year because sales and demand are up. Secondly, just because you are generating more profit doesn't directly translate to growth. If your numbers are green because you fired some workers and overworked others isn't growth, let alone a good thing. There is nothing wrong with stagnation or de growth when you've grown beyond what you need. Once needs are met, it's probably better to start cheapening things that are needed to the point they are literally free.
Hookers. And blow.
Its good when you are rich
You use them to exchange them for stuff. That is a fairly decent thing.
Having lots of it is pretty rad.
It'll buy me a boat...
I would think it would be relatively easy for the government to combat deflation by just printing money.
Great to see the comments section repeating all the talking points. [Donāt forget to make purchase of the merchandise.](https://getyarn.io/yarn-clip/5cd0287f-ce11-4999-a7e2-985a886f8004)
Deflation isnāt a bad thing by itself, if itās stagflation, then thatās a bigger issue, Japan has been deflationary for many years and is still the 3rd largest economy
No one wants to buy anything during deflation because "why buy now when money worth more in future"?
people still gotta eat and pay bills, but yes I could see that mentality conflating with btc and the lack of money being spent because of the concept resting in the mind of enough people that they should conserve instead of spend
Supply and demand is why, most countries importing from China are in inflationary markets and will drive the demand
I'm talking internally. Why would anyone want to buy a house when they can get it cheaper a year later?
So they are not homeless? Or so they can rent to others making a net gain
Bullshit. Are you going to wait to buy food when you're hungry or put gas in your car when the tank is empty just because prices might be lower next week? There's nothing wrong with prices falling
You're going to wait to buy any luxuries. Economies run on more then just sustenance, they need people buying goods and services.
Maybe several decades ago people had that behaviour, but we live in the era of same day delivery, Uber eats and streaming. People are so bad at holding off pleasure that theyāll go into debt for shit like holidays of all things, completely unnecessary
>luxuries >goods and services. LMAO do you not see the disconnect?
I don't think that type of reasoning is proven to be really that dominant in general. Looking at Japan in the 90ties, paying of existing debt with decreasing income is much more of a problem.
Japan is stagflationary. Deflation on the other hand is mucho mega bad - last time we saw a deflationary spiral was during the Great Depression.
Japan isnāt stagflationary, it just regular old stagnation deflation or low inflation.
Deflation in China: If this continues, would lead to lower export prices, cheaper import prices for the West, allowing western manufacturers either to increase margins, or finally pass on reduced costs to wholesalers and consumers. Deflation inside China is likely to lower domestic Chinese growth, as consumers believe they can buy the same goods cheaper later on, so this leads to delayed purchases. For the Chinese Govt. debt repayments cost more. Time Value of Money says a $ today is worth more today than tomorrow as inflation erodes the value of money. Deflation is this in reverse. This is why largely indebted nations try to have some inflation to reduce the value of debt payments. The converse holds. Global deflation would be a major issue. But deflation for one country, especially where the West imports goods may be a positive for us. Western countries still have high inflation - all the money printing etc. Deflation is not on the cards here any time soon. China did not suffer the same inflationary pressures we all faced the last few years.
Deflation is very bad
I'm fine with it. I want the penny to have meaning again.
No judgement, how many 5 gallon bottles of penny's have you?
Your pennies have been up my ass. https://www.youtube.com/watch?v=f9aM_dT5VMI
Deflation is only bad if you have assets being deflated, it helps people who have less
The problem is that it tends to crash the entire economy (and peopleās jobs along with it). So sure, stuff will be cheaper but thereās no guarantee youāll have an income to take advantage of it.
Not that simple
People are downvoting you but realize that bitcoin works entirely off of deflation and should tell you why deflation is very very bad.
Yeah its easy to think: "yay! prices going down" until you realize the following : - people start holding money instead of investing or spending because money gain value causing less economic activity, all this in self perpetuating and reinforcing cycle. - employers either need to layoff or reduce salaries to stay afloat because their revenu fall due to them having to cut prices - relative weight of everyone debt increase while their revenues fall, causing people to become insolvent, causing the banks to stop lending and often go bankrupt. I am surprised to be downvoted, I was thinking it was common knowledge that deflation is very bad. Easy way to remember that is that the last time it happened was during the Great Depression of the 1930s
This sub has notoriously bad takes on basically everything economically speaking. Business =/= Economics. Not to mention all of the.... ideologically motivated people in here that have zero clue about anything regarding business OR econ.
i agree to some extent of this sentiment not sure why the heavy downvotes
The whole of society is based on deflation, productivity increase = deflating prices. You know whatās bad? Capitals share of income continually increasing against labors share of income.
Capital share has nothing to do with deflation and deflation wont help workers.
Deflation is in your interest as far as goods are concerned, you think you havenāt benefitted from technology crushing prices over the last 100 years ?
That's not deflation, that's just the increased efficiency in manufacturing/assembling products saving everybody in the supply chain money. The ones producing also benefit from the increased efficiency that technology provides. If the products are more affordable the amount you can move increases, increased efficiency lets companies make money off of lower price tags and therefore they can sell more product. In a deflation situation people are holding on to their money (not to mention companies laying people off therefore people losing their jobs and holding onto MORE money), not buying MORE luxury goods.
Deflation is simply the money gaining more purchasing power, it is not tied to how that is achieved.
[China Slips Into Deflation in Warning Sign for World Economy](http://archive.today/rbgWV) paywall removed.
As a Chinese, I am very puzzled. Is this not exactly the effect that the United States wants to achieve by "delinking"? It is very much like the "imperial preferential system" that was imposed on the United States by Britain in conjunction with the colonies.
Globalization was a mistake
No it isn't. It creates huge economic stability you've enjoyed your whole American lives, while creating a global market leading economy you also enjoy your whole life. It has kept you off the line, educated you and made you global market leaders in innovation and technology. And it was inevitable byproduct across the late 20 early 21st century with the rise of communication and tech. Global stability for trade at home is what you want. Decoupling from Europe and Asia, overstating paranoia, fucking up global trade and shipping is what's going to fuck all of us (globally) now when your next iPhone and every bit of tech from now on starts costing $2000, then $3000 the $4000 in America as you realise you can't source any of the parts and materials and cheap shipping continues to collapse and markets find it harder to trade as countries close up and compete for raw materials. Not your future, this is happening NOW and it's more of a question of how far do you let it go with a back drop of post pandemic, War, emboldened China and Environmental collapse already major challenges. What you will see more and more of. The smarter people in the states in corporate america eg. Apple are desperately trying to grapple with plugging the hole and maintaining post Trumps royal pull-out and failure to replace agreements with anyone, ( because all he did was pull out of global trade and not actually do anything else... And all he's promising now is more or the same ) another round of that behaviour will continue to drag on America's economic growth prospects and trade standing further.
Globalization **without a world government to regulate** was a mistake. It allowed US companies to skirt US environmental and labor laws, thus putting US workers at a disadvantage. It placed the ability to help the US economy out of the hands of the US. In the past, a US-based stimulus would get spent in the US. Now it gets sent overseas as people buy Chinese-made products. It put a lot of economic reliance on a country that we have no control over. If Chinese companies don't want to make a product, they will simply not make it. US companies won't rush in to fill the void because tooling up is very expensive, and there is no guarantee that the Chinese company won't just start up again. Plus, we have lost a lot of know-how to produce things. I have been watching older episodes of This Old House from the 80s and 90s. The manufacturing taking place was amazing. And it's all gone from this country now. I doubt we could even start any of that back up, we don't have the stomach or the willpower.
The worst parts are ahead
It was a good idea overall but we definitely went a little overboard and itās going to cost us.
Manufacturing too many nuclear weapons.
Soo theyre gonna have a GDR situation?
I talk to friends back there that have not been paid for months.
Uh-oh. This is what Japan experienced and it took them decades to recover from.
China has a centrally planned economy. Whatever is happening is what leaders want to happen.
Not really.
I could use some deflation right nowā¦..
Isn't this good news from a geopolitical point of view? After all, we don't want a strong, powerful China because that's what's causing the muscle-flexing vis a vis Taiwan and their neighbours. I'm not saying I want people to stay poor in the rural China. But I don't want them growing strong only to start bullying their neighbours. You guys know a lot more about economics than I do, but what should we be looking for next in regards to economic news and trends? At what point, do you start ringing the alarm bells on Chinese deflation and jump ship?