General Question

ibstubro's avatar

If the US economy kicked off the global financial crisis of 2007-8, why are so many people denying the possibility of China sending global markets into another crisis today?

Asked by ibstubro (18804points) January 8th, 2016

I keep hearing the the US is weathering the current crisis in China because of strong job growth in Dec. 2015.

Not everyone agrees, but I don’t think their views are receiving enough attention.

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8 Answers

johnpowell's avatar

China does things that would be totally illegal here to manipulate their stock market (like the government pumping in 20 billion a week to inflate prices). So I wouldn’t really chalk the last week of breakers as a sign of a worsening global economy. It is more of a natural correction.

That being said I have lost a lot this last week, but I am not concerned.

stanleybmanly's avatar

It wasn’t exactly the U S economy, but rather the fraudulent, blatantly unethical practices defining the investment banking sector that brought the world to its economic knees.

ibstubro's avatar

But, how many and how large ‘financial corrections’ can the Chinese economy withstand, @johnpowell? Even the Chinese government’s money has to come from somewhere these days. The US bailout was a burden, and we have no idea of what, if anything, worked.
I have to admit to being a little worried about the lot I lost this week.

Investment banking brought the US economy down, US economy soured the global economy, @stanleybmanly.
It’s the end result I’m worried about, not the causation.

Cruiser's avatar

Because the number of people who have enough skin the game to be genuinely concerned about global markets affecting their nest eggs is remarkably small.

SquirrelEStuff's avatar

Because just like the creation of ISIS, we never seem to get to the root of our problems.

I have been saying for quite a while that the “economy” becomes an issue again as the election nears.
Our economy, or more so, the global economy can be easily manipulated in my opinion. We manipulate our currency through inflation just like China does. Where do you think the money for the “bailout” comes from? When we go from $4–14 trillion in debt, that $10 trillion is essentially new money coming into existence.
Most of our debt is not to China. It is to the Federal Reserve, a private bank, who prints money out of thin air, and then loans it to the govt with interest, also printed out of thin air. It is a Ponzi scheme, being perpetuated by the IMF, World Bank, and Federal Reserve.
We have engineers for everything, why do we think this doesn’t exist with an economy?
Between supercomputers, algorithms, and all the data collection, why is it so far fetched to believe that the economy can be manipulated to the advantage of a few?

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution by morning.” Henry Ford

stanleybmanly's avatar

The difference between the 07 situation and the current market doldrums in China is that the rest of the world (as yet) is not chained to either the yuan nor Chinese financial instruments to even a minimum degree that it is linked to the dollar and Wall st. casino products.

CynthiaFulcanelli's avatar

There is a great research article about this topic on the ProOpinion blog.

I do moderately agree eith the previous statements. Export/Import companies will be the first ones that will have the opportunity to understand this problem first hand. We have to learn that the entire global economy is well connected, and every single correlation in that structure matters. Unfortunately, it seems that we love realizing stuff only after the damage gets done.

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