PeakTrader.com

[administrator]

PeakTrader said...

The E.U. is in recession and there'll likely be a hard landing in China.

The Fed has done its part to maximize economic growth and maintain price stability.

Now, it's up to the government to deregulate, cut spending, and cut taxes:

Bernanke says U.S. needs faster growth
Mar 26, 2012

"U.S. gross domestic product grew 3 percent in the fourth quarter, but is expected to have slowed to just below 2 percent in the first three months of this year. For all of last year, it grew only 1.7 percent.

The U.S. central bank lowered overnight interest rates to near zero in December 2008 and has bought $2.3 trillion in debt securities to drive other borrowing costs lower to spur faster growth and cut unemployment.

The Fed said it would likely keep rates near zero at least through late 2014."

******

The Fed has to dig deep to create any inflation, even with the help of Peak Oil.

******

China needs to slowly shift from being less of an export-led economy to more of a consumer-driven economy.

However, in the short-run, that'll cause inflation and unemployment.

China hasn't had the massive "creative-destruction" process, in over 20 years, that's needed to fundamentally improve the economy, most likely, because the communist elites don't want massive political upheavel.

There are many problems in China's economy. I stated before:

China's GDP is an illusion. The private sector is small (consumption fell from 45% to 36% of GDP in the past decade). Basically, China is a giant assembly plant.

What the Chinese do best is corruption, crony capitalism, misallocate resources, cause negative externalities, prevent creativity, create inefficiency, and export much of its GDP.

******

Y = C + I + G + NX

GDP = Consumption + Investment + Government + Net Exports.

If you take away China's investments and net exports, you have consumption and government, and we know consumption is low and malinvestment is high.

******

GM sold more vehicles in China than the U.S. in 2010
Jan 24, 2011

GM sold 2,351,610 vehicles in China in 2010, up 28.8% over 2009.

By contrast it sold 2,215,227 in the U.S., up 6.3%.

GM total sales worldwide were up 12.2% to 8,389,769.

GM's Top Ten Global Markets

1.China, 2,351,610, up 28.8%
2.USA, 2,215,227, up 6.3%
3.Brazil, 657,825, up 10.4%
4.U.K., 290,250, up 1%
5.Germany, 269,061, down 29.5%
6.Canada, 247,104, down 2.8%
7.Italy, 169,955, down 9.9%
8.Russia, 159,199, up 12.4%
9.Mexico, 155,590, up 12.4%
10.Uzbekistan, 145,151, 41.3%

******

China auto sales slow in 2011
13 Jan, 2012

Vehicle sales in China rose a scant 2.5 per cent in 2011, the slowest growth in over a decade, as higher prices and traffic controls kept buyers out of showrooms.

The expiration of tax incentives and subsidies, along with new restrictions on car purchases in Beijing, slowed sales.

China's market is bound to continue to expand, given the relatively low level of vehicle ownership among increasingly affluent families.

The development of China's auto industry will be limited not by market demand or economic growth, ``but by severe traffic congestion, air pollution and energy shortages,'' said Jia.

Ford's sales for the year climbed 7 per cent to 519,390 vehicles.

******

It seems, few SUVs, light trucks, or minivans are sold in China. However, it buys "luxury" cars:

In China, Car Brands Evoke an Unexpected Set of Stereotypes
November 14, 2011

Buick...is one of the hottest luxury cars in China.

The Audi A6, the semiofficial choice of Chinese bureaucrats.

“It’s always best to yield to an Audi — you never know who you’re messing with, but chances are it’s someone self-important.”

The lower rungs of the Chinese market are still dominated by domestic brands like Chery.

The affluent, however, are flocking to an increasingly diverse array of foreign luxury offerings.

China’s romance with the Buick also has historical roots. The last Chinese emperor, Pu Yi, was the proud owner of two Buicks.

In 2010, Buick sold over 550,000 cars in China, more than triple its sales in the United States.

******

China is smaller than some people believe, because two-thirds of the country has been almost uninhabitable for thousands of years, and 90% of the population lives in a small area (also, the Gobi desert is expanding by 1,000 square miles a year):

Maps:

http://www.chinatouristmaps.com/china-maps/population/full-population-map.html

http://geology.com/articles/satellite-photo-earth-at-night.shtml

---------