At 08:42 06/11/2003 -0500, you wrote:
Keith,
I have a small import business and track shipping rates. Shipping rates
recently have doubled, tripled, and even quadrupled in some places
primarily due to China's release of a pent up demand for raw materials
and for other imports. Ship yards are tied up building double hulled
ships for oil transport so they won't be able to build merchant marine
ships any time soon. Import/export business is going to be hit hard and
the WTO is going to become irrelevant soon. This is going to accelerate
the crash.
Bill
Interesting. Yes, China's production grew by almost 20% for most of this year and investment by 30% -- quite unprecedented and taking up to a quarter of the whole world's use of resources -- aluminium, iron ore, zinc, copper and, of course rapidly increasing quantities of oil.
The GDP of the US is supposed to have grown by 7.2% in the last quarter but this is really very suspect and I'm astonished by how many economic journalists are getting carried away by euphoria. At least a third of this is fictitious, due to adding notional quality of efficiency gains to products even if their price hasn't changed and some of it will simply be re-filling inventories. It will collapse next quarter -- emormous peaks like this always do so and, if consumers stop spending -- be it by ever so little -- the whole economy could start collapsing on itself . If Greenspan can't prevent deflation then consumer and company debts will grow materially larger even if the notional debt remains the same.
Keith
On Thu, 06 Nov 2003 08:55:49 +0000 Keith Hudson <[EMAIL PROTECTED]>
writes:
> Credit card debts are now at about 130% of disposable income in
> England,
> and it's much the same in America and Australia (not sure about
> Canada) .
> This means that if consumers stopped all spending on non-essential
> items
> and saved hard it would take well over a year to pay off their
> debts. At
> the same time (in England, and I guess in America) house buyers are
>
> over-exposed way beyond anything previously.
>
> Greenspan and the Bank of England have been encouraging consumers to
> vastly
> over-extend themselves by setting absurdly low interest rates. It's
> all
> going to crash. When? Who knows? But it cannot be all that far
> off.
>
> I know ..... I know .... long-time FWers will say that I've been
> forecasting an economic crash ever since the latish 90s. It didn't
> happen.
> We were overtaken by the madness of the IT boom -- which turned out
> not to
> be a boom. That's all gone now (even though share prices are still
> too
> high.) Pensions funds -- state and private -- are deep in trouble
> all over
> the developed world.
>
> There's the mother and father of all crises to come -- all caused by
> the
> arbitrary setting of currency values and the capricious settings of
>
> interest rates. There's no possibility of any equilibrium in this
> situation. It can only go on until there's a crash.
>
> Keith Hudson
>
> Keith Hudson, Bath, England, <www.evolutionary-economics.org>,
> <www.handlo.com>, <www.property-portraits.co.uk>
>
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