Chart from b5baxter at vancouverpeak.com via vreaa.wordpress.com |
A collection of articles and quick commentary on residential real estate. "It's different this time, really . . . " Ha ha ha. No, it's not. When China goes down, so does Australia and Canada.
Saturday, March 10, 2012
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3 comments:
When China goes down, the world will go down as well...China always do thing in a very strategic way. If you are not Chinese, you won't understand..
The question is is the Chinese government as smart as they think they are. They have it all on the line.
Their trade deficit hit a record high last month of almost $15billion. They are in a pinch. They themselves drove up the price of commodities which are essential inputs into keeping the economy growing at that magic 8-9%. So they have to suck it up and pay even though there is insufficient market for their finished goods.
A collapse of commodity prices and a drop in supplier margins (and even better, negative margins because of state subsidies) because factories in China get desperate will be a boon to the U.S. and Europe.
Inventory was definitely higher in the early 2000s and late 1990s
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