"How China fooled the world" debt 200% of GDP

cells

mwpt wrote: »

Personally I see incentives as all wrong

probably because you start from a point of 'things must be !!!! and something must be going wrong' and look for evidence to confirm that

people who have saved and have capital can put it to whatever they like, you can allocate your capital to what you think it a good incentive.

for the majority of people that means putting money into a bank who then lends it out mostly for one form or another of infrastructure buying/building. And the biggest infrastructure project on planet earth isn't dams isn't factories isn't roads or rails it is just plain old simple housing.

You might think it odd and a bad incentive that the banks are lending out so much money so 1 million new homes are built per week but it does not mean it is a bad incentive or odd its just the world building what the world needs.

Thrugelmir

cells wrote: »

And the biggest infrastructure project on planet earth isn't dams isn't factories isn't roads or rails it is just plain old simple housing.

Housing with no jobs generates nothing (Spain \Ireland). Except a huge amount of bad debt and wasted resources.

Why do foreign investors now own our airports, motorways, ports, power generators, waste and water companies. Safe to assume that it provides a better return on capital than property investing.

cells

Thrugelmir wrote: »

Housing with no jobs generates nothing (Spain \Ireland). Except a huge amount of bad debt and wasted resources.

Why do foreign investors now own our airports, motorways, ports, power generators, waste and water companies. Safe to assume that it provides a better return on capital than property investing.

Ireland has a shortage of homes it was a very short term myth that they had an excess

TickersPlaysPop

Investing in infrastructure is not safe or ideal when a a significant amount of it turns to bad debt. Then the bonds don't mature and returns are crap and that will affect our pensions....

Also... Cells....

Your message sign off is an over simplification and doesn't make sense to me.... so pls help...

Is it a possibility that people are progressively living smaller and smaller houses, with smaller land and less parking, with more people per property?

I know 2 personal examles one where a family of 4 with twins age 3 living in a 2 bed flat plus a lodger so they can afford the mortgage with the lodger sleeping on the sofa. Another where 3 retired women have bought a 3 bed house with the 3rd being a box room.

TickersPlaysPop

The Chinese have been creating money from nothing just like the rest of the world based on institutions believing it will be paid back and not turn bad. A lot of this was their shadow banking system.

cells

TickersPlaysPop wrote: »

Investing in infrastructure is not safe or ideal when a a significant amount of it turns to bad debt. Then the bonds don't mature and returns are crap and that will affect our pensions....

Also... Cells....

Your message sign off is an over simplification and doesn't make sense to me.... so pls help...

Is it a possibility that people are progressively living smaller and smaller houses, with smaller land and less parking, with more people per property?

I know 2 personal examles one where a family of 4 with twins age 3 living in a 2 bed flat plus a lodger so they can afford the mortgage with the lodger sleeping on the sofa. Another where 3 retired women have bought a 3 bed house with the 3rd being a box room.

yes people are having to live in smaller and smaller places WHILE at the same time demographics actually needs us to live in bigger and bigger places (eg space / capita is rising rapidly in germany and France and has been for a decade while in the UK it has been falling for a decade)

The current average is about 32 sqm / capita

If we take the build rate to be 140,000 units a year at 75sqm/unit and population growth to be 500,000 a year then that averages out to 21 sqm / capita

so each year the average is falling.

However its clear that not everyone is living in smaller and smaller places as a 50 year old widow in a 5 bed detached home is taking up the same space and will do for the next 40 years.

Instead it is the RENTAL market which has to adjust first and fast as that is the most liquid market and because it has a good price signal (no price signal for owners or social renters)



If the population continues to grow this fast and build rates continue to be this low then there will be an overall trend of less space per capita but also a trend from owners to renters all to aviod mass homelessness

prosaver

some people say the Chinese were great inventors.
so,
how come they never invented knife, forks, and spoons, just chop sticks.
it reminds me what my
mate said ;
they havnt got the same brain as us,
the invention part is missing, and replace by an extra part in the brain too deal with copying,
thats why their so good at copying,
is that mental or what?

cells

TickersPlaysPop wrote: »

Investing in infrastructure is not safe or ideal when a a significant amount of it turns to bad debt

oh its very safe compared to a lot of other investments!

Generally it is very hard to make bad investment in infrastructure because of population growth. Even if you overbuild homes (eg ireland 2005-2007) that gets zaped soon (eg ireland 2012-2015) by more people and demographic demand for more space per capita

and once more, the amount of money lend on the infrastructure housing might be more than all other infrastructure combined and that is a good bet.

cells

prosaver wrote: »

some people say the Chinese were great inventors.
so,
how come they never invented knife, forks, and spoons, just chop sticks.
it reminds me what my
mate said ;
they havnt got the same brain as us,
the invention part is missing, and replace by an extra part in the brain too deal with copying,
thats why their so good at copying,
is that mental or what?

yes, that is mental

cells

TickersPlaysPop wrote: »

The Chinese have been creating money from nothing just like the rest of the world based on institutions believing it will be paid back and not turn bad. A lot of this was their shadow banking system.

so what was funding the 15 million or so new Chinese homes per year?

the power infrastructure bigger than Europe and the usa combined?

the transport infrastructure bigger than Europe and the USA combined?

the manufacturing industry bigger than Europe and the USA combined?


the tooth fairy?