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Thread: Can the appreciation of Yuan tame China's economic inflation?
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[quote=GARYKINKADE,294593]The U.S. was at it's economic peak probably thru the mid 1970's partly because the end of WW2 created pent up demands for consumer goods that were deprived during the war plus the need for overseas construction and consumer items as a result of the war destruction. Since the mid 1970's the U.S. labor market either priced themselves out or were being priced out by foreign competition + automation was replacing workers on assembly lines. I.E. labor, in general, was going from a manufacturing base to a service base(generally pays less). Add to this the fact that we were constantly being bombarded with tv commercials and advertising to go "forth and consume" on "easy credit" created a situation "on average" of consumption $ being = to or greater than earning $. Hence, a very low savings rate. So, we have no one to blame but ourselves + the fact that the general public has let the government become corrupt thru lobbying efforts from both inside and outside our borders. So, why has China managed to save a larger portion of it's earnings? I would guess that, in general, the people have not been subjected to a constant pressure of consumerism as has the U.S., but have noticed a trend towards this in your larger metropolitan cities. Also, as China becomes more industrialized then consumerism will increase and the propensity to save will decrease. So, where does all of this lead to? Darned if I know. Enjoy your automobiles that are coming soon. [/quote]
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