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Discussion Starter · #1 ·
By Brett Arends, MarketWatch

BOSTON (MarketWatch) — The International Monetary Fund has just dropped a bombshell, and nobody noticed.

For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.

And it’s a lot closer than you may think.

According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now.

Put that in your calendar.

It provides a painful context for the budget wrangling taking place in Washington, D.C., right now. It raises enormous questions about what the international security system is going to look like in just a handful of years. And it casts a deepening cloud over both the U.S. dollar and the giant Treasury market, which have been propped up for decades by their privileged status as the liabilities of the world’s hegemonic power.

According to the IMF forecast, whoever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy.

Most people aren’t prepared for this. They aren’t even aware it’s that close. Listen to experts of various stripes and they will tell you this moment is decades away. The most bearish will put the figure in the mid-2020s.

But they’re miscounting. They’re only comparing the gross domestic products of the two countries using current exchange rates.

That’s a largely meaningless comparison in real terms. Exchange rates change quickly. And China’s exchange rates are phony. China artificially undervalues its currency, the renminbi, through massive intervention in the markets.
The comparison that really matters

The IMF in its analysis looks beyond exchange rates to the true, real terms picture of the economies using “purchasing power parities.” That compares what people earn and spend in real terms in their domestic economies.

Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America’s share of the world output down to 17.7%, the lowest in modern times. China’s would reach 18%, and is rising.

Just 10 years ago, the U.S. economy was three times the size of China’s.

Naturally, all forecasts are fallible. Time and chance happen to them all. The actual date when China surpasses the U.S. might come even earlier than the IMF predicts, or somewhat later. If the great Chinese juggernaut blows a tire, as a growing number fear it might, it could even delay things by several years. But the outcome is scarcely in doubt.

Continues in link....

http://www.marketwatch.com/story/imf-bombshell-age-of-america-about-to-end-2011-04-25?pagenumber=2
 

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The result of 'The American Dream' being made available vs. being made attainable.
 

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So....the world changes. Who wudda thunk? This is not the result of any single policy, party or person. It is the result of technology becoming more available to other countries. Everyone around the world wants what the U.S. has had for roughly 100 years. It simply wasn't possible until now. Do our policies that punish success and suck the life out of business add to the equation? Sure. But with or without those policies, other large countries were going to figure out how to prosper with the new technology and trasportation available. I'm not losing sleep over something that is as certain to happen as death, and America's fall from the top is certain.
 

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A result of America rendering their manufacturing to a communist government

Beyond stupid and one look at the #'s proves this

Also a Lopsided trade agreement between the two countries exists which heavily favors Communist China

Meanwhile our government (Just like the oil Sham)

Sits there with one finger up their Ass and the other one up their nose watching it all go down right before their very eyes

Say Why do we need an overfunded government anyway ?

They do nothing to improve America in Fact as of late they are only harming America,

Example: Libyan war, Trade deficit, National deficit, Raising the deficit ceiling, printing money, Allowing IIlegal immigrants to migrate to American and granting work permits to IIlegal immigrants who send the money out of the country and compete with Americans for jobs despite 10% un-employment :nuts:


Complete Ass "O"s evryone of them
 

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Technology is one thing, and if we were losing on the basis of technology alone I would say we deserve to lose, but the problem is the unfair trade practices of China. If you simply had the unfair valuation of their currency it would be one thing, but couple that with the complete control the government has over the people in a communist country like China and you have a near monoploy.

The question now has to be, do we continue to be the world power that spends trillions around the world enforcing human rights and our view of how countries should exists even though our system is proving to be inferior to the mix of communism and capitalism that is kicking our ass. Of course I don't think our system is actualy inferior but in a true capitalist society we would have to concede that the country that is succeeding better has the better system.
 

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Technology is one thing, and if we were losing on the basis of technology alone I would say we deserve to lose, but the problem is the unfair trade practices of China. If you simply had the unfair valuation of their currency it would be one thing, but couple that with the complete control the government has over the people in a communist country like China and you have a near monoploy.

The question now has to be, do we continue to be the world power that spends trillions around the world enforcing human rights and our view of how countries should exists even though our system is proving to be inferior to the mix of communism and capitalism that is kicking our ass. Of course I don't think our system is actualy inferior but in a true capitalist society we would have to concede that the country that is succeeding better has the better system.
There are lots of ways to look at the data. Yes, China's GDP will surpass America's. But they have 4 times as many people and much more territory. So, per capita, they are nowhere near our productivity. That would nullify the conclusion that their "system" is superior to ours. And fairness is a quaint doctrine when it comes to international affairs. What's fair for us probably doesn't seem fair to them and vice versa. In international affairs, it pretty much comes down to what you can get away with and what retaliation other countries can hand you. We are used to being in a position to mete out punishment without worry of retaliation. But we are no longer in that position.
 

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There are lots of ways to look at the data. Yes, China's GDP will surpass America's. But they have 4 times as many people and much more territory. So, per capita, they are nowhere near our productivity. That would nullify the conclusion that their "system" is superior to ours. And fairness is a quaint doctrine when it comes to international affairs. What's fair for us probably doesn't seem fair to them and vice versa. In international affairs, it pretty much comes down to what you can get away with and what retaliation other countries can hand you. We are used to being in a position to mete out punishment without worry of retaliation. But we are no longer in that position.
But the article says that just 10 years ago Our economy was 3xs the size of Chinas. Now we are close to equal. So it makes sense that if nothing changes, in 10 years China's economy will be 3xs the size of ours, and in 20 years it will be 6 times as large.

In your previous posts you have said repeatedly that we must accept that we could not be the superpower for ever, but again in a truly capitalist society we are taught that if any company succeeds better than another that company has a better system or it would not do better. If we must accept that for companies, we must accept that for countries.

We cannot have it both ways. We cannot say that China is conducting itself fairly and say that we have the best system in the world if we are not maintaining our superiority. If we are losing our economic edge it must be because our system is not working as well in economic terms, or that China is doing something that is unfair and that we should not accept.
 

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Technology is one thing, and if we were losing on the basis of technology alone I would say we deserve to lose, but the problem is the unfair trade practices of China. If you simply had the unfair valuation of their currency it would be one thing, but couple that with the complete control the government has over the people in a communist country like China and you have a near monoploy.

The question now has to be, do we continue to be the world power that spends trillions around the world enforcing human rights and our view of how countries should exists even though our system is proving to be inferior to the mix of communism and capitalism that is kicking our ass. Of course I don't think our system is actualy inferior but in a true capitalist society we would have to concede that the country that is succeeding better has the better system.
I agree 100% with the first paragraph. I completely disagree that some form of hybrid communism/capitalism hybrid is the answer. China's communism allows unfair employment practices. i.e. You can get cheap labor at say $4 a day all day long. What's killing the US economy is the fact that we can't manufacture much of anything anymore due to wage differences between the 2 countries. This in turn has large manufacturing companies sending thier jobs overseas to these communist countries where people are forced to labor for starvation wages in order to meet pricing competition.

Detroit pays $55 p/h for an assembly line auto worker and in China you can get the same labor for $5 per day, and they are happy tro get the work there. How do we compete with that? The only thing we have going for us is that American products, although expensive, are superior to the crap that come out of China, mostly due to the working conditions there. The only way we can survivie is if we can bring large scale manufactruring back by making it attractive to large scale manufacturing to do so. Are we willing to make those sacrifices?

I think not.

Here's a video to illustrate my point ... Thx Mr. Burns C6 :thumbsup:
Cheap Chises Pots and Pans
 

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In your previous posts you have said repeatedly that we must accept that we could not be the superpower for ever, but again in a truly capitalist society we are taught that if any company succeeds better than another that company has a better system or it would not do better. If we must accept that for companies, we must accept that for countries.
Apples and oranges. Within the U.S., all companies essentially work under the same rules. But in the world market, every country can set their own rules. If they want to be accepted in the world community, they either have to a) be somewhat cooperative with world business standards, b) have a product the rest of the world can't live without (like oil), or c) be so much bigger and stronger than the rest of the world that they don't care how acceptable they are. In honesty, the U.S. has fit in the category of "c" for many decades. China has now joined us in a club of 2 who fit that category, and we don't like it.
 

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I agree 100% with the first paragraph. I completely disagree that some form of hybrid communism/capitalism hybrid is the answer. China's communism allows unfair employment practices. i.e. You can get cheap labor at say $4 a day all day long. What's killing the US economy is the fact that we can't manufacture much of anything anymore due to wage differences between the 2 countries. This in turn has large manufacturing companies sending thier jobs overseas to these communist countries where people are forced to labor for starvation wages in order to meet pricing competition.

Detroit pays $55 p/h for an assembly line auto worker and in China you can get the same labor for $5 per day, and they are happy tro get the work there. How do we compete with that? The only thing we have going for us is that American products, although expensive, are superior to the crap that come out of China, mostly due to the working conditions there. The only way we can survivie is if we can bring large scale manufactruring back by making it attractive to large scale manufacturing to do so. Are we willing to make those sacrifices?

I think not.

Here's a video to illustrate my point ... Thx Mr. Burns C6 :thumbsup:
Cheap Chises Pots and Pans
In the last 25 years, more than twice the entire population of the U.S. has been lifted out of poverty in China. That is hurting us - no doubt. But if you look from a Chinese perspective, you can't really find much fault in that. Exactly the same thing happened here when we hit our industrial age. China is simply 100+ years late to the game.

From Wikipedia:
"China has been the most rapidly growing economy in the world over the past 25 years. This growth has led to an extraordinary increase in real living standards and to an unprecedented decline in poverty. Between 1981 and 2005 it is estimated that the poverty rate fell from 85% to 15%, roughly 600 million people relieved from poverty."
 

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In the last 25 years, more than twice the entire population of the U.S. has been lifted out of poverty in China. That is hurting us - no doubt. But if you look from a Chinese perspective, you can't really find much fault in that. Exactly the same thing happened here when we hit our industrial age. China is simply 100+ years late to the game.

From Wikipedia:
"China has been the most rapidly growing economy in the world over the past 25 years. This growth has led to an extraordinary increase in real living standards and to an unprecedented decline in poverty. Between 1981 and 2005 it is estimated that the poverty rate fell from 85% to 15%, roughly 600 million people relieved from poverty."
I have no ill feelings towards the Chinese people in trying to get ahead. They just happen to be doing it to our detriment. We need to take measures to insulate us from the damage this is causing us, be prepared for the consequences, or die.
 

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Does anybody here foresee China denouncing communism in the near future... much less five years from now ? Because, that's what it would take... in addition to surpassing our growth "substantially and sustainably" to have the world's trading currency move to the Renminbi. How about Russia or the EU or Arab nations ? Are any of these countries not only stable and outpacing our potential growth... but able to offer the security of a nation of our might ?

This is China, Russia and Iran, saber rattling. IMO. I posted about the three doing this very thing, months ago.
 

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Does anybody here foresee China denouncing communism in the near future... much less five years from now ? Because, that's what it would take... in addition to surpassing our growth "substantially and sustainably" to have the world's trading currency move to the Renminbi. How about Russia or the EU or Arab nations ? Are any of these countries not only stable and outpacing our potential growth... but able to offer the security of a nation of our might ?

This is China, Russia and Iran, saber rattling. IMO. I posted about the three doing this very thing, months ago.
There is a difference in those three countries. Russia and Iran are broken countries that have oil to help them survive in spite of their brokenness. China has little to offer the world in the way of natural resources. It's natural resource is a gigantic body of workers who will work hard for very little pay. Regardless of how little pay they actually make, they are better off now than they were years ago, so they are happy. As time passes, China is going to become more prosperous and modernized. But they can't keep this pace of growth up forever. Most experts I read say that their growth is going to level off as their need to feed the beast at home becomes more and more expensive. Modernization has a huge permanent cost, and the Chinese are just beginning to realize that.
 

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Discussion Starter · #14 ·
So....the world changes. Who wudda thunk? This is not the result of any single policy, party or person. It is the result of technology becoming more available to other countries.
I tend to think it is more to blame on the Chinese currency manipulation that being allowed to happen without repercussions. Coupled with some corrupt politicians creating/maintaining bad policy. But then again, I tend to look at the big picture..

Do our policies that punish success and suck the life out of business add to the equation?
They ARE the equation... elections aren't fixing it..
 

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I tend to think it is more to blame on the Chinese currency manipulation that being allowed to happen without repercussions. Coupled with some corrupt politicians creating/maintaining bad policy. But then again, I tend to look at the big picture..
On this one I agree 100%. And the reason that they can play the money games they play are because they are a communist country that can tell people how much they will earn. They can tell banks exactly what to do and they can tell investors what to do. It is a totaly unbalanced playing field, and one that we in a free society could never compete against.
 
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