China and the American Way

Here is the lead Story of the Day, though Most are not likely to recognize it for some 3-6 years Why? Well, the actual numbers realistically equal the new numbers put out by the World Bank, but there is little recognition of the coming crisis–something like the current Credit Crunch in the West. Other nations, both Undeveloped and Developed, will eventually match and probably exceed the competitive advantage currently enjoyed by China. They have consistently denied development of Consumer-Role institutions in the Hinterland of their Country. They possess only a very inadequate replacement Consumer population (no Cash and lacking Stores). Once China loses the Export Trade, all those Bad loans become bad commercial paper. China has become addicted to the Imports they currently will accept, but will wind up without ability to purchase them. The West will also suffer, and Western Investment will turn into empty, shutdown Plant.

The Free Exchange highlights another danger for China, who does not possess sufficient technical advantage to design and build clean-burning Coal for electrical generation, when it is yearly increasing its electrical generation at a vast magnitude. Electrical Power Plants and Smelting Furnaces have a Life Expectancy of 30 years, and the magnitudes of Coal-burning utilizing inadequate technology remains relatively locked-in within that Period. Alteration of these Plants to utilize clean-burn practices typically equal or exceed the initial Cost of Construction. The Time to get Chinese compliance with World environmental standards is Now, not after another Ten years of Coal plant construction.

This Post, like all from this blogger, knows no boundaries, but it does have a graph which Readers should look at. It reminds Us that it is not only China where Ignorance is Bliss. Consumers are still building Credit debt in the midst of a Credit Crisis, and much of it is coming from Households where Mortgages will fall into Foreclosure. Economists might ponder these events with some degree of Pleasure, though sensible men might wonder at the sanity of it all. The World gets more confused and confusing, as it becomes more complex. One has to ask whether it is the Common Man, or the Experts, who need therapy. lgl