Comment

Stock Market Yo-Yo Watch

578
yma o hyd3/02/2009 10:56:06 am PST

re: #527 Kenneth

China needs the US to buy her manufactured goods. There is no where near enough domestic demand in China to replace the US market. The US needs China to buy treasury bonds and thereby finance the deficit. It’s a marriage made at the bank.

Russia, meanwhile will create havoc, as they will benefit from a rise in energy prices.

Thing is, how will China sell its goods when the US is getting into a depression, and not buying?
That seems to be the reason why Latvia’s government resigned, and why their economy collapsed: they were exporting stuff which now, in this global crisis, are no longer being bought.
Thats one reason, I think, why Germany will be in deep trouble. Their economy relies on export - what happens when nobody can afford to buy?
Our manufacturing sector in the UK has already shrunk by 5%.

Its no longer just about banks and the stock market - its about the stuff people make and need to sell. If there is not enough money around, people cannot afford to buy. Result - depression, economic collapse all round.

Scary times.