What happens if this bubble bursts: http://www.bloomberg.com/apps/news?pid=20601087&sid=aNZe4JWeV1aw

"China is in the midst of “the greatest bubble in history,” said James Rickards, former general counsel of hedge fund Long-Term Capital Management LP.

The Chinese central bank’s balance sheet resembles that of a hedge fund buying dollars and short-selling the yuan, said Rickards, now the senior managing director for market intelligence at McLean, Virginia-based consulting firm Omnis Inc.

“As I see it, it is the greatest bubble in history with the most massive misallocation of wealth,” Rickards said at the Asset Allocation Summit Asia 2010 organized by Terrapinn Pte in Hong Kong yesterday. China “is a bubble waiting to burst.”

[...]

The World Bank indicated today that China should raise interest rates to help contain the risk of a property bubble and allow a stronger yuan to help damp inflation expectations. The nation’s “massive monetary stimulus” risks triggering large asset-price increases, a housing bubble, and bad debts from the financing of local-government projects, Washington-based World Bank said in a quarterly report on China released in Beijing. "

Where will "Western" nations go to fund their over-spending if China can't fund us anymore. A Chinese "bubble burst" could cause a recession so massive that we'll no longer call the 30's great anymore.

Damn I clicked the link first hoping to see a Huge "Bubble" and was let down, really don't know what this means just figured I'd log my expierence, lol...

I couldn't help but laugh at your response to this....

If I had posted a really large bubble popping then this would not be in the debate forum .

The same thing happened to me. Clicks the link, hopes to see a big bubble...

Well at least I'm not the only one and I only thought it was a big bubble is because of news discussion...lol...

Great Depression 2.0 here we come... oh goody. [/sarcasm]

yeah.... China is so over-heated right now and they are buying up debt from the US and other western countries at an alarming rate. The system runs because the West continues to buy from China which keeps their GDP up.... but if the West can't buy at the same rate they are now it may trigger a sprial effect which will make the Great Depression seem like a cake walk. And I think this could happen because the only realistic solution to the deficits that countries are running right now is to raise taxes.... and raising taxes means less disposable income....

Or, if the debts that Western governments owe to China default (which is possible considering the rate at which governments are borrowing) then China will lose billions and China will go into a recession which will affect the rest of the world because lots of businesses have invested in China because it's the fastest growing and soon to be largest economy in the world.

I would not be surprised if a double dip recession or depression came from this. The real hope though is that people recognize the potential problems and do something about them.

This doesn't sound good for us either, seeing as we are already in a economic crisis of are own. It sounds like something needs to be done about this otherwise there will be a lot of unhappy people.

Originally posted by JusTReaL

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This doesn't sound good for us either, seeing as we are already in a economic crisis of are own. It sounds like something needs to be done about this otherwise there will be a lot of unhappy people.

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I think the only solution right now is for the world to start paying down their debt. No business or person could hold as much debt as countries do and still function. And I don't think countries can manage it much longer either.

The best thing any person can do is to get out of debt as much as possible. If you don't anything to anyone then you are generally safe when tough economic times come.

I was among those looking for a Giant Bubble too, but I will still comment on China's bubble. First, start off by looking on the tag on the back of your shirt. What does it say? Made in China, probably, (or Honduras, or possibly Mexico). Although America (I think) is still the biggest producer of goods in the world, China is (again, I think) a close Second. We lose China, we lose most of the products in the Eastern Hemisphere. Of course, China could just keep growing, and growing, and growing until it takes over the world... scary thought? Probably won't happen though.

This really isnt such a bad thing after all (might be depending on how you look at it)... let them burst the bubble! USA alone is spending WAYYYYY to much money on imports as it is.

If I spend money like there is no tomorrow then I become broke or in dept just like USA but if I spend little money as possible and focus on saving or selling products to other countries I become richer.

If China's bubble does burst, it will no doubt affect us but I think it will probably do them a lot more harm. Without their precious exports they will have too many goods and will crumble they will loose tons of money and they will be in same position we are in

The good news here is bursting the bubble might help establish domestic jobs here, factories might reopen and more people might have jobs. This would probably result in corporations focusing on less money for themselves and more money towards growth and to hire new employees. Stuff would be more expensive though but that isn't a bad idea really it will enable small business to once again compete with these huge merchants who get their goods for extremely cheap overseas and flip a good profit off it easily.

I just want to say that I'm the 3rd person to click that link hoping for a gigantic bubble. DAMN YOU GEEOGREE!

JigSaw : I agree.... but it's that time in between when the world economy goes to hell that is the most troublesome. Everything is so inter-connected that if one economy starts to fail then everyone goes with it. I think long term it would be a good thing if all the bubbles burst and people stopped spending money they don't have... but I don't it being good short term. And by long term I mean 5-10 years.

No time for bubbles people time to get serious here

Yeah it would be pretty bad if their bubble did burst. Not only would it take years for the world to recover and adapt to it... it would also probably trigger hatred between countries we are allies with and trigger a huge war. Why war? Well just imagine if USA were to conquer China? They would be able to control everything at that point. It's all conspiracy talk but I think if a bubble does burst it will be so drastic either a new war will unleash or they will get the new world order system in full force so we can continue business as usual.

I know countries have been discussing merging into a one unit system, global trading is all about New World Order. 2011 or 2012 I think will be good timing for such talk. I think people who say the world will end on 2012 thought of an apocalypse but in reality it is just the formation of a global system in order to keep doing what we are doing.