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China or the U.S.? October 19, 2017

Posted by hslu in China, Cold War, 美國, Economics, Global Affair, Globlization, 中國.
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We are talking about the largest economy in the world here. And the answer, according to Noah Smith, is China.

https://www.google.com.tw/amp/s/www.bloomberg.com/amp/view/articles/2017-10-18/who-has-the-world-s-no-1-economy-not-the-u-s#ampshare=https://www.bloomberg.com/view/articles/2017-10-18/who-has-the-world-s-no-1-economy-not-the-u-s

I started talking about the downfall of the U.S. in 2009. Finally, some one agreed with me eight years later.

What’s even more surprising to me is this: Noah Smith believes that China will eventually come out on top if these two countries engage in a conventional war. He cites China’s advantages in population and manufacture prowess.

I am glad that I get to see this happening in my life time. 中國, The Midfle Kingdom, has come back to glory from the humiliation it suffered after 甲午戰爭, the First Sino-Japanese War, and the signing of 馬關條約, Treaty of Shimonoseki in 1895.

Source: The wikipedia

Source: The wikipedia

Well, 甲午戰爭 and 馬關條約 are history now and, finally, a brand new chapter in 中國近代史 has begun with China’s 十九大, the 19th Communist Party congress, and its 十三五, China’s 13th Five-Year Plan.

While Trump is writing a $25,000 check from his personal account to the father of a dead soldier and arguing with a Democratic Congresswoman about what Trump said to another dead soldier’s family, China is walking its own path and carrying out its expansion plans systematically.

Yeah, let Trump tweets and pisses off at everyone who disgrees with him, McCain, Tillerson, Muller, McConnell, Schumer, CNN, NBC, NFL players and many others, the family feud makes good drama for the world to enjoy. 

Source: Fox News

Source: The Daily Mail.

Source: The Daily Mail.

I am not complaining at all. It’s entertsining and fun to see when the s**** hits the fan.

This simple chart illustrates the frightening force driving the economy July 10, 2016

Posted by hslu in Economics, Global Affair, Gold.
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http://finance.yahoo.com/news/grant-williams-crazy-presentation-debt-000000190.html
Grant Williams, the author of the widely-read financial publication “Things That Make You Go Hmmm” and co-founder of Real Vision Television, says we’re experiencing something “truly historic” in the global economy. In a new 40-minute video presentation called “Crazy,” Williams highlights the extraordinary levels of global debt and unprecedented monetary policy we’ve seen since the 2008 financial crisis. Following the 2008 financial crisis, central bankers unleashed ultra easy monetary policy.

Is the US Economy healing? July 5, 2014

Posted by hslu in Economics.
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There were 18 quarters since 1947 that US economy contracted by more than 2.9%, including the 1st quarter of 2014. There was only ONE quarter of those 18 that the US was NOT in a recession.

Will the growth rate of US GDP in the last quarter be positive? If it is not, the US will be officially in recession again.

We shall see.

A $116 billion hole for Portugal May 4, 2011

Posted by hslu in China, Economics, Global Affair, Politics.
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In the midst of euphoria of Osama’s death “possibly” in the hand of  US navy seals, a story about Portugal $116 billion bailout didn’t get any attention on the main street media.

Countries like Portugal, Greece, Ireland and Italy, they owed so much money that they have no way of paying it back. And the solution to the problem: lend them more money.

Yes, they get more money from many sources with the knowledge that they may never be able to pay the original debt back , let alone the new lending they just got.

They had to borrow money from other EU countries simply because they can’t print Euro themselves.

Well, The United States isn’t doing any better but the United States has something these other countries didn’t have: America has four or five mints with printing presses operating at full speed: every day, every evening and every night.

You know that you know what will hit the fan when US dollar loses its reserve currency status.

Well, that won’t happen for a while but IMF is doing something in the background and one of these days it will happen.

In the mean time, let the good time roll and enjoy.

The hole which America is digging for itself is bigger than all the other holes combine.

The structural change in US economy and the prolonged depressing state of the housing market will make the situation even worse.

Do not believe Bernanke and his public statement because he has let the cat out of the bag and has stubbornly ignored the increasingly worsening inflation problem in the US and all over the world.He has consistently denied that inflation is happening until his first public news conference.

He was trying to set up America people for his mistakes, i.e., the extremely loose monetary policy.

The inflation cycle has just begun and it will not end easily. Bernanke has more than $2 trillion on his balance sheet and more than $2 trillion-dollar in the economy. He is waiting for a chance to sell what he has on his book but it will increase interest rate and hurt the economy that is still trying to find its footing.  When he finally starts to sell them, look for interest rate to pick up which will need more of our tax money to pay for the interests on the national debt.

In the mean time, China, India, Singapore, Australia, South Korea, Vietnam, Thailand, EU, England, Switzerland, and Brazil have raised their key interest rates in order to fight inflation caused by the loose monetary policy of the US Fed, i.e., Bernanke.

Even Nigeria, a country which relies oil export for almost 90% of its GDP, has raised its interest rate because of economic forces beyond its border..

It is no secret that Bill Gross, the $1.2 trillion PIMCO Bond fund had dumped all his US treasury holdings because he is very negative on US dollar. He went one step further and has shorted US treasuries because he sees the US dollar will be less valuable in the near future.

When Bill Gross stops buying US treasuries in the tune of a couple of hundred of billions, investors will demand higher interest rates.

Buckle up, Americans, the road of inflation will be very bumpy. We are going downhill fast!

And the view isn’t going to be pretty at all.

National Debt of the United States November 2, 2009

Posted by hslu in Economics.
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United States owes a lot people a lot of Money

The United States is not looking very good because it owes a lot of money to a lot of people. The debt will grow bigger to as far into the future as eyes can see.

As of 2008, the national debt is estimated at 70.2% of the GDP. It will rise to 90.4% in 2009 and eventually reach 100% in 5 years (actually 99.8%.) I am willing to bet you a dollar that the percentage will exceed 100% sooner than 2014 because the government never gets its numbers right. Besides, the GDP growth rates used in the estimates may be too optimistic for years 2009 through 2014. In addition, this data does not include the public option being discussed in the Senate and House.

US Natioanl Debt as % of GDP - 1930 - 2014

With the country rapidly moving to the left under Democrats, the government will certainly grow much bigger in the next 3 years. If a year from now, the Republican Party is still too weak to challenge the sitting president, we will have 7 years of experimenting with massive social programs.

Sadly, the debt will grow through the roof and the future generations will pay through their collective noses. They have to go by with less which means lower standard of living for generations. This doesn’t include the unfunded mandates such as social security, Medicare, Medicaids and food stamps. Rest assured, the retirement and health care benefits of the congressmen and Congresswomen are included though. We don’t have to worry for them because they are being taken care of on the backs of you and I.

The US is spending about 6% of its annual federal budget on interests due to low short term interest rates. This figure will go up as economy turns around and interest rates start to rise. It is not unlikely that the US will spend as much 15 to 20% of its national budget just on interest payments alone in the future.

Since about 50% of the budget goes to entitlements, that leaves very little to education, health care, energy, social programs, transportation, foreign policy, nations building, military and national security.

What could be even more troubling to me is the socilizing of the United States will put a big dent on entrepreneurship which will slow down the driving engine behind the growth of the US in the past 100 years. With incentives taking away from people with ideas and the drive, they will take their talents to where they are treated the best, i. e., with the biggest monetary rewards like China, Korea, Singapore and Taiwan if its government and opposition party get their acts together. The brain drain will be the final nail on the coffin of a long and painful death of the United States.

 

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