Earl Ofari Hutchinson's take on the politics of the day
The Hutchinson Report
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Not So Far Fetched as Before -Pedro Baez
A community advocate and friend, Morris Griffin AKA Big Money Griff has been campaigning for manufacturing jobs to leave China, Bangladesh, and any other foreign port that they may have gone for quite a while.
Many have said it will never happen.
Funny thing, it may happen now.
Today’s global report listed China as the nation where deficit, after deficit is occurring faster than its bullet train, that alone is bleeding it very dry. The bullet train, which was designed to link outlying provinces with Beijing, Shanghai, runs mostly empty of passengers. It is so expensive for the average Chinese, that all you see on the trains are foreign tourists. Many are saying that China has overextended itself and the bullet train can do to it what nuclear weapons and aid to Cuba did to the Soviet Union.
In other words, kaput.
Chinese workers who took on debt like some eat food, can’t pay off those business loans that have come due. The automobile showrooms are full of Mercedes, Toyotas, Hondas, Rolls Royces that factory managers had to pawn in order to make payments.
This is what the global report said about China:
Many economists fear that the crisis not only could devastate Wenzhou but also may be a portent of what China could be facing on a vastly larger scale: a massive amount of accumulated debt that could rival the subprime crisis in the United States that triggered a larger recession. Most is private debt amassed by small and medium-size companies, economists said, but a portion is personal household debt. Any precise figures are largely guesswork, they said. Wenzhou’s debt crisis is complex but essentially boils down to this: The small and medium-size factories that drive the local economy found it increasingly hard to get bank loans this year as the government announced it was ending its stimulus spending and tightening the money supply to rein in inflation. The factories turned to the murky private lending market — small, licensed credit companies, unlicensed underwriters, bigger businesses with spare cash to lend, and loan sharks.
Therefore the Chinese workforce may cease to exist, and many companies like Black and Decker, Craftsman, etc. may come to the conclusion that “Made in the USA” isn’t so bad after all. The city of Wenzhou is just the tip of the iceberg, according to economists. This crisis is spreading faster than the plaque.
My advice to our guys in China: Get out while you can!