OT – aaronbest said:"Muir/Anon/whatever the hell you call yourself today, you are a tool. You've already been told that you are just a negative person with nothing worth while to add to any discussion."I disagree. Muir/Anon keeps Rob's bull blog interesting these days. You should probably work on getting a little thicker skin and some humility.

"That seems to me to be the 'emperor with no clothes' sector, one that could rapidly shrink if folks in other countries stop turning to large US firms to fund/broker deals, set up trading desks, etc, etc."Industries grow and collapse all the time. Undoubtedly, the redeployment of resources will lead to slowing GDP growth. That is probably one reason why productivity generally falls during recessions (the last one excepted).The U.S. economy is very competitive domestically, which is probably one reason why they generally lead the way in terms of productivity growth. Unlike, say, France which has oodles of protectionist red tape DOMESTICALLY. The U.S. have way less restrictive labour laws which means that the economy adjusts much faster and is much more efficient.Where the U.S. lacks competitiveness is in the large oligopolies such as the military industrial complex and elephants… Read more »

freako: How much of that 75% 'services' represent financial services?That seems to me to be the 'emperor with no clothes' sector, one that could rapidly shrink if folks in other countries stop turning to large US firms to fund/broker deals, set up trading desks, etc, etc. It seems at least partly dependent on belief in the US, something that could change quickly with one or two large financial incidents.

"I didn't say anything about the relative size of the US and Chinese economies. I said that the US is important to the world as a consumer, not a producer"I don't know if I can reconcile that with your earlier statement: "The US economy is even smaller than you think. It's just a house of cards based on borrowing."The U.S. is the LARGEST producer in the world. It produce more than the Japan and Europe combined. That is not a relative statement, it is an absolute fact.Your post gives the impression that the U.S. economy is not real. I don't understand where you are coming from. High consumption does not negate high production. In any case, GDP calculations INCLUDE the current account deficit.IMHO, Americans ARE overconsuming, and the current account deficit is not sustainable. Such an event WILL (as you… Read more »

It's the US consumer that's important to the world economies that actually produce things, and he's reaching his credit limit.So do you think the fact the U.S. GDP per capita is 10 times that of China is just manipulation of statistics?

Hi guys, hope you're all having good holiday season.I'm with freako and the rest of you on lower oil.On China, I'm agnostic, I simply can't juggle all the data and come up with a direction. So much to be bullish about, but also unknown potentially unsustainable factors too. So I'll watch from the sidelines.—-Thanks for the 80's figures and anecdotes.We should package a cut and paste 5-liner on 81, 83, 45%, nominal/real, etc and use for every newbie who asks why we don't buy and hold now, or says that RE never goes down.—-"I had one conversation with a guy who is a doctor. He didn't believe that real estate could ever go down."Fade the doctors and the dentists.They're always very late to the party, and they're impatient, too. Pun intended.

Just how much more demand can be borrowed from the future?Be it ab-busters, dvd players or mortgages.The China hype is just that, China hype, not different than the Japan Inc hype.

Ohhh, fear fear fear!!Here's a link to an article which depicted the gloomiest scenario we are about to possibly face and it's not pretty.http://www.canadianmoneysaver.ca/resource_center/homepg_articles/QuonOct06.htm

The 80's recession was severe: many lost their jobs and subsequently lost their houses; the unemployment rate for young adults was around 25%; even government workers were laid off or were forced to take 10% wage cuts to avoid lay-offs in their sections.What surprised me, and left a lasting impression, was how fragile our economic system can be. The difference between a healthy 3% growth and a devastating -3% decrease is really not that much and can happen more quickly than most imagine. People say it can't happen again – well guess what, the same people said the same thing right before it tanked in 82. Never say never.

I have found only one other poster that agrees with me on this (can't remember who). Probably not me either, though I'm also in agreement. China is building huge overcapacity, and they're very vulnerable to even a slight downturn. My wife is Chinese and knows of some Chinese who are concerned – but they don't get quoted in the media.

I was a bit young to be paying attention around 1981. The only thing I vaguely remember is real estate signs everywhere. During an election, someone joked that the real estate signs outnumbered the political signs.What I recall more clearly is the 80s recession. Every night, the evening news had depressing stories about young people trying to find work or mass rallies to opposed cutbacks in just about everything. By the time I graduated – with guidance counsellors strongly urging me to go to college or face doom – the worst of it was over, but it still plays in the back of my mind to this day. I think people my age are a bit more cautious than people 5 or 10 years younger. I think that age group is going to be shocked when they meet their first… Read more »

I have found only one other poster that agrees with me on this (can't remember who).Doubt it was me, but I'm in agreement. Here's an interesting article you might like to read from earlier this year (Foreign Policy):Dark Side of China's Rise</a href="http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=18110&prog=zch">bc_cele:What's the latest from Afghanistan?