Joey Ting asked 7 years ago
May I ask how does US economy affect China economy? Will the impact be seen immediately or months? And is there any website to track Chinese economy data etc?
Thank you
pcwong Staff answered 7 years ago
The US buys a lot of goods from China, especially Walmart, Apple, McDonald’s, Universal Studios and Disney in the form of retail merchandise. Other goods include steel and building materials and electrical and mechanical components.
So if the US economy suffers a major recession, China will likewise have a recession. When the top two world economies have a recession, it is going to have global impact and that includes the SEA region. The impact could be within weeks. However, with regard to the stock markets, as soon as bad data comes out of the US, the impact will be immediate.
However, China is expected to fare better as they have the One Belt, One Road project which will unite East Asia with Central Asia and all the way to Europe. China’s government and household debt levels remain low but its corporate debt is high. Certainly many state owned enterprises could fail and default.
http://www.tradingeconomics.com is the website I use to track individual country’s economic data.
Joey Ting answered 7 years ago
Interestingly, I have a friend whose opinion is that China is the one that can potentially bring about melt down. “What we see a lot more over the recent years is Chinese spending big time in other parts of the world. If, all these spending dropped sharply, the impact can be significant.” Just to share with you.
pcwong Staff answered 7 years ago
Yes you are right, the Chinese are causing real estate bubbles Canada, UK, Australia and US.
But the one country that could detonate an atomic bomb in the global economy is the US.
US debt to GDP is about 350% with US$1T in auto loans, US$1T in student loans and US$1T in consumer credit. more than 50% of the US population do not even have US$500 to their name.
47 million are on food stamps and almost 100 million people of employable age are unemployed. The unemployment rate used by the Fed at 4.7% is a farce. The actual rate is closer to 9.7%.
The Fed is leveraged 77 to 1 which means it owes US$77 for every US$1 it has.
The total net asset of the US is US$122T but the unfunded liabilities in Social Security and Medicare is US$104T.
Every year the US has US$1T in deficit. There is no pay the US can pay for its debts much more paying for Social Security and Medicare without borrowing more and printing even more money.
So that is why gold and silver is the best hedge against such an economic armageddon. During the great Depression when the Dow fell 90%, the only two gold miners stock went up between 200% – 300%.