Chinese Economics Thread

[In4ser]

On a serious note prepare for lots of inflation in 2022. Better save up guys!

If inflation becomes a big problem then saving IS the worse thing to do. During inflation, a currency's buying power decreases over time which means your savings shrink. The average American who saved like 15-20% of their income to buy a house this year is further away from buying one than he was last year (in nominal terms) because house prices had also risen at a similar rate from a higher principal value.

Instead of saving, you should be spending money upfront on purchases of real assets now instead of saving up money for future use. In fact, you should consider taking on a mortgage or other long-term debts for expensive purchases too because debt is also priced in the depreciating currency which means that debt increasing becomes an asset while savings is a liability.

Such consumer behavior may make inflation worse for everyone else but safeguarding you and your loved one's economic well-being should always be your top priority. However, I don't think we've reached a point where people on this forum should be panicking just yet. Just make preparations gradually like buying durable goods and increasing portfolio exposure to commodities and other inflation hedges. As things get worse, you will be increasingly ready accordingly but you shouldn't "bet the farm" on something that may not happen or be as bad (though I'm an inflation hawk myself).

 

[NiuBiDaRen]

If inflation becomes a big problem then saving IS the worse thing to do. During inflation, a currency's buying power decreases over time which means your savings shrink. The average American who saved like 15-20% of their income to buy a house this year is further away from buying one than he was last year (in nominal terms) because house prices had also risen at a similar rate from a higher principal value.

Instead of saving, you should be spending money upfront on purchases of real assets now instead of saving up money for future use. In fact, you should consider taking on a mortgage or other long-term debts for expensive purchases too because debt is also priced in the depreciating currency which means that debt increasing becomes an asset while savings is a liability.

Such consumer behavior may make inflation worse for everyone else but safeguarding you and your loved one's economic well-being should always be your top priority. However, I don't think we've reached a point where people on this forum should be panicking just yet. Just make preparations gradually like buying durable goods and increasing portfolio exposure to commodities and other inflation hedges. As things get worse, you will be increasingly ready accordingly but you shouldn't "bet the farm" on something that may not happen or be as bad (though I'm an inflation hawk myself).

I would advise buying short term bonds and certificates of deposit C/Ds that you can cash out in the short term for liquidity purposes. If you have a fat bank account then go ahead and buy long term assets or your diversified asset portfolio lol

Most Americans live paycheck to paycheck and your advice is useless to them

My saving up means preparing for a 20% etc increase in daily expenses and preparing your allocation accordingly

 

[ansy1968]

If inflation becomes a big problem then saving IS the worse thing to do. During inflation, a currency's buying power decreases over time which means your savings shrink. The average American who saved like 15-20% of their income to buy a house this year is further away from buying one than he was last year (in nominal terms) because house prices had also risen at a similar rate from a higher principal value.

Instead of saving, you should be spending money upfront on purchases of real assets now instead of saving up money for future use. In fact, you should consider taking on a mortgage or other long-term debts for expensive purchases too because debt is also priced in the depreciating currency which means that debt increasing becomes an asset while savings is a liability.

Such consumer behavior may make inflation worse for everyone else but safeguarding you and your loved one's economic well-being should always be your top priority. However, I don't think we've reached a point where people on this forum should be panicking just yet. Just make preparations gradually like buying durable goods and increasing portfolio exposure to commodities and other inflation hedges. As things get worse, you will be increasingly ready accordingly but you shouldn't "bet the farm" on something that may not happen or be as bad (though I'm an inflation hawk myself).

@In4ser bro good day, can you give us from the outside looking in the actual inflation, is it actually that bad? my FIL-AM relatives are coming home early, making excuses about the pandemic as a reason, but a close cousin who is currently unemployed told me its hard and he is from San Diego holding a DPT degree.

 

[antiterror13]

I would advise buying short term bonds and certificates of deposit C/Ds that you can cash out in the short term for liquidity purposes. If you have a fat bank account then go ahead and buy long term assets or your diversified asset portfolio lol

Most Americans live paycheck to paycheck and your advice is useless to them

well, the interest of time deposits is close to nothing ... and buying bonds? really ?

I'd say buy gold or silver

 

[NiuBiDaRen]

Once again I'm not talking to saavy investors. I'm talking to the layman like the 20 year olds on this forum.

20 year olds on this forum still don't have a commodity diversified portfolio to work with

You tell a 25 year old to put his money in a long term asset and boom his daily expenses rise by 20% and he's still paying his student debt and you think commodities is something he has time to think about? At least go fixed income for the average man trying to survive.

 

[antiterror13]

Once again I'm not talking to saavy investors. I'm talking to the layman like the 20 year olds on this forum.

20 year olds on this forum still don't have a commodity diversified portfolio to work with

You tell a 25 year old to put his money in a long term asset and boom his daily expenses rise by 20% and he's still paying his student debt and you think commodities is something he has time to think about? At least go fixed income for the average man trying to survive.

I thought you were savvy investor trying to give some advices okie dokie ......

 

[NiuBiDaRen]

I thought you were savvy investor trying to give some advices okie dokie ......

a close cousin who is currently unemployed told me its hard and he is from San Diego holding a DPT degree.

This is my target audience heh

Not everyone here was born to upper class parents

And not everyone has an Audemars Piguet watch wink wink unlike @ansy1968 who has a whole stash of them

 

[Xizor]

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Yes when the US is experiencing problems, you will always see the news media displace the problem to China like the US isn't experiencing a thing.

Due to rising energy bills and food disruptions, primarily, they say.

What about the manufacturers trying to recuperate and heal the hurt that was inflicted by Covid ?. Certainly, it must be a factor for US inflation.
As for Chinese producers, it is a good time to ride the wave and soften the hurt caused due to Trump trade war disruptions along with the covid pandemic.
Ultimately, consumers are the losers. Less money to save, more dues to pay.

 

[xypher]

Lol, some shitty German consultancy tried to spread fake news about Evergrande defaulting, expectably enough it is top on Reddit's worldnews sub - https://www.reddit.com/r/worldnews/comments/qr42om . However, when you go through the link, you can see that the headline actually changed to "Evergrande averts default", lmao.

 

[Overbom]

Lol, some shitty German consultancy tried to spread fake news about Evergrande defaulting, expectably enough it is top on Reddit's worldnews sub - https://www.reddit.com/r/worldnews/comments/qr42om . However, when you go through the link, you can see that the headline actually changed to "Evergrande averts default", lmao.

Just another day of "China is collapsing" stories getting heavily upvoted by delusional Gordon Chang followers