They said China is the global growth engine of the future, and last year, many analysts recommended Chinese companies and real estate as a way to offset the deteriorating economy in the US. While we agree that China will be one of the major growth engines of the future, soon to overtake the US as the largest economy in the world, we have stopped short of recommending Chinese assets as a way to hedge risk in the US at the present time.
The simple fact of the matter is that China is a global exporter and producer of goods for Western nations, and the West, for those who haven’t noticed is completely broke. Without income or credit, Western consumers can no longer afford to buy the goods coming out of China. This trend, in our view, will continue for several years to come as the debt-based systems of the West continue to collapse.
Even though China has a large enough population to create internal economic growth, their citizens simply don’t make enough money currently to offset the losses in exports. Arguably, China has tried to jump start their economy by infusing lenders with hundreds of billions of dollars, much like the US government has, but to no avail. It’s beginning to look more and more like the 2001-2007 bubble we experienced here in the US. While we don’t have as much available economic data for China as we have for the US, the cracks in China are starting to show.
In May we noted that Chinese home sales were down 50%, and we’re not talking over a period of a year. This happened on an almost month to month basis, as soon as the Chinese government tightened their lending standards, which shows that all of the demand was essentially manufactured by the government.
The China Morning Post is now reporting that there are millions of vacant homes on the mainland. Like Americans and Spaniards, many Chinese believed that they could make money flipping houses. Like their Western counterparts, they were wrong:
Yi Xianrong, an economist at the Chinese Academy of Social Sciences, a government think tank in Beijing, noted estimates from electricity meter readings that there are about 64.5 million empty apartments and houses in urban areas of the country, many of them bought up by people wagering on a constantly rising property market.
In the overseas edition of the People’s Daily, Yi said the â€shocking†level of empty housing showed the dangers brought by the country’s property boom, which the central government has been trying to cool.
“If this outsized property bubble does not burst, it will hurt residents’ well-being, and also affect national financial security and co-ordinated national economic development,†wrote Yi.
He wrote that the overheated property market was creating â€misallocation of resources, price distortions, squandering of wealth … and is magnifying national financial risks, so that the economic structure cannot be adjusted, ultimately leading to overall social instability.â€
source: Zero Hedge
Sound familiar?
While we believe Chinese assets will provide a much better avenue than the US for growing wealth over the next couple of decades, we would steer clear of Chinese assets for the time being. The entire global system is on the brink, and China is most certainly not immune.
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What goes around, comes around unless you use that thing between the listening devices and behind the visual sensors.
So while driving down Main Street in Bejing the 50 story condo on your left is half empty. Who gives a crap.
I care because I know the developer of the complex will be forced to fold his tents, declare bankruptcy, and those unsold units will be forclosed by the Bank. In itself not a problem but when you multiply that “project” a million times, Chinese Banks will experience the same problems that US banks, and European Banks have faced; with the same result.
The cascading fall of the Chinese economy will match our own and Europe’s as well. In the end China will be broke too, not withstanding the worthless paper it holds as US Dollars and the Euro. If this is any indication of what will happen, its going to get a lot worse before it gets better.
Their commercial market is way over built too. If the residential market falls, so will the commercial real estate, and then the banks.
Buy silver if you cannot afford gold and by all means, keep prepping!
Great comment DK, I agree. China’s problems are just like ours but super sized 1.3 billion screaming chinamen. Does America even have 65 million homes?
The economic cracks are all over the world except Russia. While we are looking at all the head lies, I mean head lines, Russia is rearming. Now the world is weak and the bear is hungry. One of the problems I see for the NWO and the global elites is Russia. With America and China weak who will keep Russia in check?
In 2008 and 09 China kept right on building and manufacturing goods for the west. Now their products are stacking up around the world and no one is buying. If America was a bubble, China’s a hot air balloon.Â
Watch China, watch Russia and stack your supplies deep, there is a storm coming.Â
Im about to be kicked out of my house after 3 years.I have been unemployed and havent paid the mortgage. some people dsaid i have about 3 more months left before the sherrif comes to evict me.Ill use that time to save up and get an apartment and a home for my dog .Allready sold most of the tools, furniture, motorcycle, stove, .Just have the refrigerator, microwave and a small 20 ” television .Unemplymet runs out in 3 more months. Able to pay my child support, electric, waterand garbage bill as well as insurance on m ytruck and truck payment and food, thats about it , useing net zero for internet access so im limited on time i can use. Many will soon be in my nightmare .
So? Our dumb ass president Soetoro has a huge vacancy between his big ears.  The U.S. is totally fucked. At least the Chinese have a chance. History will prove that Soetoro is the biggest piece of shit ever to drop from a dogs’ ass.
Patriot One:Â Â We have that many households, but I don’t remember the exact count.Â
I do not see any military conflicts except between Iran and Israel which will eventually include the US and North Korea. Not WWIII, this is just another police action to pacify the remaining States for the NWO.
 All of the major powers are currently working together because they compliment each other in a capitalistic environment. Eventually China may eye Russia’s vast untapped natural resources but Russia is not going to sell any of them until the NWC arrives and they get some value based on precious metals, rather than cellulose for their raw materials.
I personally expect global changes to impact the NWO lineup by then, and the US will be on the short end of the stick after that. Bible scholars have long pondered the abscence of the US in “end time prophecy”. Now we know why:
Obama!
Cyborg:  Look at this as an opportunity to get yourself together and ADAPT! That adaptation may be an opportunity to relocate, re-educate yourself, or develop new skills. You have three months of unemployment left? Use the time wisely.
Buy a camper shell for your truck if you don’t have one. I have spent many a night camping and prospecting out of the back of my 4×4. My wifi carrier does not work where I am at, so right now I am at Barnes and Noble / Starbucks using their wifi.
All city libraries have wifi and if you are near a university, they typically have it also at their library which is usually open late: like midnight to 2 am or more. Whatever changes you have to make will prove beneficial in the end if you accept the changes as an opportunity and nature’s way of getting you off the couch and into your destiny.
You will not need the TV, fridge, and MW in a couple months, so give them away at the time. They will come back to you in many ways later. You will need a laptop with wifi capacity, just to look for a job and send resumes; or you can use a computer at a public library.
You will be ok! Keep in touch.
@Cyborg; Â Many years ago when I went through a bad patch, I made up my mind that I could give up anything but the dog. Â Dallas was a 140 lb Rottweiler, and feeding him was a bitch. Â However, when things finally started going in my direction, I still had my dog, and my self-respect. Â He never gave up on me, and I didn’t give up on him. Â He’s gone many years now, but the decision to draw the line there, in my opinion, is what turned everything around for me. Â Maybe it could work for you too.
According to that Zero Hedge article,  China’s real estate bubble is about 5 times larger than the USA real estate bubble.   The US bubble nearly collapsed our entire financial system,  so think about  what’s coming down the pike.  China’s may be forced to dump all those US Treasury bonds  they are holding.
When that happens…it is the proverbial  “Katie, bar the door!”
Game over!
check out this 8×12 foot house on wheels. its nothing fancy but its all that you could ask for. its time to stop living like fatcats
http://vitality.yahoo.com/video-second-act-jay-shafer-20910192
China just bought $500 million worth of Spanish Bonds to support the Euro. No doubt they paid for them in dollars, lol! They will probably recycle some of them to Latin America for raw materials, and willingly overpay to do it.
With 12 – 15 countries in the mix they can spread the wealth around!
Sounds like the 64 million dollar question.