[Sixstrings]

Markets have been crashing past couple days, in the US.

We appear to have caught the Beijing flu.

What do you guys think? China's in big trouble, could this be the start of a global economic great recession again or even great depression?

Federal reserve can print lot of money, but not enough to bail China out and get it growing.

Besides the fact that it's actually China we need to buy our bonds, if China buys fewer treasuries -- or dumps -- and the Fed just quantitative easing money prints to bail China out and get it growing, all we'd do is completely inflate ourselves into Zimbabwe territory. Tough problem, can the world rescue China and get it growing again, so China can keep us all growing too?

Or, like Trump would say, must we decouple before they bring us down?

Donald Trump is all over it, says "China is going to drag us down" and that he warned this would happen:

Donald Trump Warns What China Is Doing "Leads to Depression"
https://www.youtube.com/watch?v=a1BqePQtS-4

Another Bad Day For The Stock Market: Donald Trump Reacts
https://www.youtube.com/watch?v=DG9eEQwWFQk

[edit: rephrase, I'm pumping Trump too much. Long story short, watch those above interviews, he's right about the China situation.]

Watch Donald Trump warn China will ‘bring us down’

Donald J. Trump ✔@realDonaldTrump
As I have long stated, we are so tied in with China and Asia that their markets are now taking the U.S. market down. Get smart U.S.A.

Donald J. Trump ✔@realDonaldTrump
Markets are crashing - all caused by poor planning and allowing China and Asia to dictate the agenda. This could get very messy! Vote Trump.
http://www.marketwatch.com/story/watch-donald-trump-warn-china-will-bring-us-down-2015-08-24

[Tanada]

No need for a grand conspiracy Six, we have so grossly over extended our debt since the 2005 peak of cheap oil sooner or later the bubble has to burst. The 2008 crash let some of the air out, but then the Fed turned the money digitizing machines from steady to HIGH and pumped it back up as fast as they could. Now no matter how hard they pump they just can't keep the economy inflated, poof and the whole world economy melts down. Let it really pop this time and in 5 years the world will be stable. No more false growth powered be cheap oil, but we knew it couldn't last forever.

[Sixstrings]

On zerohedge, they deny it, but it looks like the G7 nations would probably try to bail China out somehow, if the thing got worse:

http://www.zerohedge.com/news/2015-08-24/asiapac-stocks-continue-collapse-yuan-deposit-rates-spike-record-high-china-devalues

Is China "too big too fail?"

Could Trump actually be right, that maybe we should decouple a bit and not be so entwined with China that we actually have to send them all our money to bail them out, even after they got all our jobs?

Somethin' to think about..

Maybe a bit different trade policy, a little bit of decoupling.. maybe that's a good idea..

[Sixstrings]

No need for a grand conspiracy Six, we have so grossly over extended our debt since the 2005 peak of cheap oil sooner or later the bubble has to burst. The 2008 crash let some of the air out, but then the Fed turned the money digitizing machines from steady to HIGH and pumped it back up as fast as they could. Now no matter how hard they pump they just can't keep the economy inflated, poof and the whole world economy melts down. Let it really pop this time and in 5 years the world will be stable. No more false growth powered be cheap oil, but we knew it couldn't last forever.

I don't see how it's energy-related. There's no lack of oil, to fuel Chinese growth.. China is stalling for some other reason.

I think a lot of it is due to government centrally-planned growth directives, in China, that ultimately just aren't free market. I.E., all the "ghost cities" and makework.

The communist government made a huge "bubble," between the ghost city stuff and then actually with communist state tv they pumped their stock market getting Chinese to invest in it, now that the market is crashing there's actually a government-ordered nationwide news blackout about it.

I'm not totally sure exactly what the problem is, clearly we've got some problem though between Europe's mess and our jobs / falling income mess in the US, and now the China juggernaut has a hiccup. Yet oil is at record low prices -- that's a deflation situation -- not LACK of oil.

Regarding China.. I think.. it's a "bubble burst" situation, it's something to do with too much government-planned growth.

And then I do think Trump is right -- he cites their currency devaluation, and Trump says that can only lead to economic depression. Which appears to be where it's headed, for China, and then they will drag us with them. If we don't start to decouple a bit.

[GregT]

The problem is Six, if it wasn't for Chinese growth, the US would have collapsed already.

You have far more to be concerned with at home, than you do with China.

[kiwichick]

even cancer can't keep growing @ 10% per year for ever

Eventually the host dies

[Sixstrings]

even cancer can't keep growing @ 10% per year for ever

Good point, there.

China's living in fantasyland to start with, to think that 10% growth just goes on forever.

Part of what's really going on is just that their economy has matured.

Europe does not have 10% growth, the USA does not, and I don't think China ever will again, either. Welcome to the developed world, and matured economies.

The reality of the "China crash" going on, actually, is just that they have just gown down from 10% growth to like 4% gdp growth -- a number that would be envied by Europe or the US.

The best that a mature economy can ever do, is like 3%. Unless.. one nation tries to devalue to get advantage, but then that just winds up in economic depression just like Trump says.

Or.. if there's world war or other calamity / instability elsewhere in the world, THEN there could be high growth. That's what happened after WWII. The US was left untouched, domestically -- and growth boomed, after the war.

High growth nations of the future: actually it's places like Australia, and Canada. Any place that's got a lot of natural resources but few people, plus a good government and free market capitalism, that's gonna grow going forward. And will top out, eventually, as a matured economy.

[onlooker]

I don't see how it's energy-related. There's no lack of oil, to fuel Chinese growth.. China is stalling for some other reason.

Six, I do not think T was referring to energy related but related to over extension of debt and then the exuberant printing of fiat money. Basically like a balloon inflating sooner or later it will burst. China by itself seems to have overextended itself as you say with excess production and concomitant debt. Plus you also have to look at the fact that China and US are so tied together economically. Also they yuan is pegged or was pegged to the dollar. Finally though oil is cheap, other commodities not so much though I would say that is a minor factor right now.

[eugene]

For the religious folks, thank whatever god for China. They are an incredible resource for blame and that, definitely assists Americans in maintaining our responsibility free attitudes. And I really like the one of "there's plenty of oil". God in her/his/transgender wisdom, wasted endless billions of years creating a very special continent filled with endless resources for his chosen people. I always like fairy tales but I am getting more than a little old for such things. And our endless faith in our political system even it has, from the beginning, been a faith based institution filled with quacks, charlatans and incredible levels of corruption but I'm thankful for the government. Once again, someone to solve the problems that, we the people in our endless childlike joy, created.

So, at 73, I'm off to get a cup of coffee and relish my god given right to be an irresponsible idiot.