| the2real4mafol said: Technically this happened years ago as China most likely has much less debt than America. US debt is $16 trillion! And apparently 97% of all money in the world is debt which is something waiting to go wrong. |
16 trillion is only a tip of an iceberg, do not forget about 50+ trillion of US household debt, even though these figures are likely to cover each other to a great degree. As for percents. Well, last time I checked world money supply (M3) was estimated at smth like 50+ trillion USD and that was years ago. Take a guess how much is that :D
China overtaking US GDP is purely symbolical event regardless of if it did really happen, happened long time ago or only will happen, as symbolical as GDP figures themselves these days that doesn't really represent anything meaningfull in debt-driven world economy. Most definetly Chinese economy growth won't sustain, that's no brainer as the country have been living through the era majority of western European countries have gone through in early-mid 19th century, the US in 1860-70s, Soviet Union in 1920-30s etc., the era that's coming to an end. Cheap resources within and outside the country (labour and energy) are past or near its peak figures, and for export-oriented economy like Chinese current events in the world that most likely will lead to dive in the demand are obviously not presenting a bright future. US attempts to shatter fragile energy market are damaging too but to a lesser degree, afair China imports smth like 10% of its energy consumption, that's bearable, yet coal is not endless (coal exports took a steep dive somewhere in 2004 when China has begun to be very power-hungry, today China is coal-importer). But I'm more or less optimistic about China's future. The most worrisome countries are those that: a) have a big proportion of industrial production in the economy; b) are huge energy importers, i.e. could not guarantee sustaining current levels from the energy production within its national borders or territories they could guarentee a constant flow of energy resources from. Classical example of the horse I wouldn't bet my money on is Japan. Those who enjoy Yakuza games on their PS3s shortly will be able to try this in real life due to rapid lumpenization of Japan's population :D
