http://www.creditwritedowns.com/2009/07/china-growth-on-track-but-at-what-cost.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 http://www.creditwritedowns.com/2009/07/china-growth-on-track-but-at-what-cost.html#comment-57105 Vangel Sun, 13 Sep 2009 03:33:00 +0000 http://www.creditwritedowns.com/2009/07/china-growth-on-track-but-at-what-cost.html#comment-57105 China will import gold, silver, copper, potash, iron and other commodities that it can use now and in the future as a way to diversify reserves away from the USD, reduce its trade surplus and keep its currency from appreciating. Eventually, the government will have no chose but to allow the RMB to go up and when that happens the Chinese will find that they can afford to consume many of the products that they now export to the US. Contrary to popular opinion in the US, American consumption is not hard or all that critical for the global economy. When Americans realize that they are broke and can no longer bid for scarce resources consumers from developing countries will step up and take their place as goods become more affordable due to their rising currencies. China will import gold, silver, copper, potash, iron and other commodities that it can use now and in the future as a way to diversify reserves away from the USD, reduce its trade surplus and keep its currency from appreciating. Eventually, the government will have no chose but to allow the RMB to go up and when that happens the Chinese will find that they can afford to consume many of the products that they now export to the US. Contrary to popular opinion in the US, American consumption is not hard or all that critical for the global economy. When Americans realize that they are broke and can no longer bid for scarce resources consumers from developing countries will step up and take their place as goods become more affordable due to their rising currencies.

]]>