Comments by "Louis Giokas" (@louisgiokas2206) on "China Faces Deflation as Economy Stutters || Peter Zeihan" video.

  1. What Peter says is spot on. On the other hand, there is something generally left out. Bear with me as I point out the real issue, The only thing is that all the analyses assume a model, which, it turns out, does not apply to this situation. As with any type of mathematical modeling (and this is basically what economics and financial analysis are) the challenge is not collecting the data (far from it) but coming up with a mathematical model to run all that data through. Wrong mathematical model and assumptions wrong analysis and conclusions. This is true in the hard sciences as well. So, what are the aspects of the Chinese economy that people aren't talking about? There are two main ones. These are corruption and intellectual property theft (IP). The scale of both is breathtaking. It is rumored that over 50% of funds allocated to projects, government and private, are stollen through graft. Ever hear the term "tofu dreg". There is a reason for that. Another example is that the CCP has set up at least two massive funds to help the country compete in the chip wars. Both I have heard of failed and the people managing them have been arrested for corruption. The list goes on and on and on. IP theft has a similarly corrosive effect. The other thing is quality of goods coming out of China. The quality level of products coming out of China is abysmal. You can blame it on the western companies as well as the Chinese. Examples of this go back well before the CCP came to power. It has been centuries since China as a country has been innovative (I am not talking about individuals). Ever since western companies decided that they would do marketing and design and outsource manufacturing, things have gone downhill. That is a bigger and more complex conversation. The biggest culprit in all this is Walmart. Why do I prattle on and on about this? It is because no one, especially the people managing massive amounts of money in the US, is talking about this. They are looking at opportunities to profit off of fluctuations in purely financial terms. That's their business model. They do not care about (it is not their business to do so) long term issues and solutions. I am lucky to have a top-notch financial advisor. He has, for years, avoided China. He is very analytical. As for not talking about the main differentiating issues, there is one exception. Love him or hate him, that person is Donald Trump. And it is not a new thing for him. Even Democrat leaders have made noises about this at times. We ignore it at our peril.
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