China overtakes US as world’s largest economy



oh it is official the United States is now number two the Chinese economy just overtook the u.s. to become the largest in the world and it's really not a surprise here interestingly as the u.s. slipped from being the leading economic power in the world mainstream media has virtually ignored the story I spoke earlier with the president of euro pacific capital peter schiff i began by asking him why the story is being ignored well first of all I was in shock by and I've been expecting China's economy to surpass the United States in fact right now it's only surpassed it when you adjust for purchasing power parity but I think maybe by you know the net over the next 10 years or so it could surpass it without making those adjustments just on a dollar level and I think that will happen when the Chinese abandon their currency peg and allow their currency to rise and I think it'll rise substantially against the dollar and that will dramatically improve their economy it will prove the purchasing power of their citizens and it will enable a China to truly surpass the United States and frankly they might have already done that had they not adopted this foolish currency policy years ago now last year it was China that surpassed the u.s. in global trade now as we mentioned it's in terms of goods and services are we getting kind of used to the idea that China is as you mentioned gradually over time kind of surpassing the US on multiple levels here economically well I don't know that we're getting used to it but we're going to have to because I think ultimately it's going to mean a big diminishment in the standard of living for Americans when the Chinese reclaim their production for themselves and stop exporting what they make to America and stop loaning us all this money you know if you look at the most recent trade figures China just posted its largest trade surplus ever at the same time America just posted its biggest trade deficit ever manufactured goods alright so let's talk about that for a minute because I hear people say all the time well this doesn't matter the only reason the Chinese economy is so large is because the US buys all that stuff that China creates cheaply as you're pointing out eventually though that that the whole argument goes away does it not because that there is going to be a shift coming well China's economic growth is not thanks to our generosity in accepting all their out but it's it's their effort that produced it in the first place it's Chinese factories it's Chinese capital investment in Chinese labor that is growing in Chinese economy not American consumption I think if anything were a drag on the Chinese economy I think if China wasn't foolishly subsidizing American consumption the Chinese would be enjoying falling domestic prices and they would be buying all the goods that are turning out Chinese factories and their economy and their standard of living would be much stronger as a result because because that might be the case do you think that China would then at some point in the near future decide to stop as you use the word subsidizing Americans and without those cheap products well absolutely in fact that's why I think the Chinese have been accumulating so much gold and well I think they continue to be big buyers of bold is they are preparing to jettison the dollar as their principal reserve and I think they're going to eliminate the peg and again when they do that's going to be the birth of a new renaissance in China you're gonna really see China rise to a much greater degree and that's going to be the Sun setting on the American Century because without China's support we're gonna have to finally deal with the problems that have been building up in our economy for years but China has spared us having to deal with those problems Peter the u.s. is an interesting position right now simply because there is not a single generation of Americans left who really remember what it was like for the u.s. to not possess the world's reserve currency in the dollar it sounds like all of that is coming to an end you mentioned that the Sun setting here on the American Century as the Sun is beginning to set on that what do we have to look ahead to for the next decade here in the US well a lot of it is going to attend on how we react to this you know rude awakening that we're in store for but I think Americans today younger Americans really have no idea of just how truly prosperous America used to be back in you know the 1950s for example the real wealth of this nation that had been built up over years of free enterprise limited government sound money we were a much stronger economy and we lived a much higher standard of living remember back in the 1950s a man who didn't even graduate high school could support a family support his children support his wife who didn't have a job save for retirement not have debt we had a true a middle class in this country that had tremendous purchasing power and very little debt and that doesn't exist today I mean a lot of countries have caught up to America because we've encumbered ourselves with so much government and regulations but I think now some of these countries that have been holding themselves back are really going to increase their lead when they jettison this dollar system so we're gonna have to come to terms with this we're going to only be able to consume in America to the extent that we can produce and right now we can't produce because we don't have the capacity we've got a bloated education sector and healthcare sector and service sector meanwhile we've been gutting our industrial sector and we've been relying on the generosity and stupidity of the rest of the world to produce the things that we can't and lend us the money that we don't save and when we have to wake up to that reality it's going to be a big change in America and hopefully will motivate us to make some key structural political changes that will unleash the free-market spirit that originally built this country and that is going to be so necessary to build it back up again after it collapses when you use the word collapse we're talking about a monetary collapse certainly in terms of the dollar what do you see moving forward in terms of alternative currencies Bitcoin obviously you mentioned gold a little bit ago in terms of older more stable commodities what's your thought on that yeah I don't think it's going to be Bitcoin that replaces the dollar but I do believe that other currencies will rise and I do believe that gold will increase in importance despite the fact that the Swiss unfortunately voted down backing their currency again by gold which was the case in Switzerland up until 1999 I'm sure that eventually the Swiss like many countries are going to turn back to gold when the dollar collapses and people really appreciate the reason that gold has been money for so many centuries and why fiat currencies have failed every time they've been tried this most recent experiment with the dollar is not going to be the exception to the rule so I do think you're going to see gold be a much more important asset and other currencies rise in importance especially to the extent that they are backed by or maybe even redeemable in gold Peter Schiff president of euro pacific capital incorporated thanks so much for your time hey anytime




Comments
  1. If you want to calculate China power, go to the poorest areas of the poorest regions of the WORLD and realize how China is implanting itself there in terms of road building and in big cities in airports And costal regions ports and Roads connecting those ports. Was the WORLD sleeping when developing at the same times??. Is the question.

  2. Leading the world via peaceful means, hard work and impeccable planning… Thank you China for showing the rest of us how it ought to be done. ❤

  3. There are fundamental differences in how the two countries calculate their GDP. China doesn't include life essentials in calculating GDP like rent people spend on housing and coal or natural gas they burn for heating, because such things are considered consumed rather than created. I understand that many countries do include rent and revenues that would reflect in an accounting chart but are actual consumption rather than value created or produced. This difference in accounting tradition explains why India was on the same weight level as China in the 80s and while enjoying similar fast pace growth is now only 1/5 the size of the Chinese economy. Chinese have accumulated much wealth over the past decades, and this is constantly downplayed in western media, but that can create a blind spot on how the two nations actually compare. Some states in the United States have stopped generating wealth altogether but due to the way accounting places them are still generating GDP based on debts, benefits and such. It's like the Enron fiasco, using USD to calculate can create an imaginary strength. It's much better to substantiate the economy with infrastructure projects rather than wall building. I just don't see how the wall is going to generate wealth, we have had a wall for some 2500 years and it doesn't generate much at all.

  4. The bible states this lol..this is the start of the decline of the USA..which eventually becomes a third world Nation..China becomes the next world superpower..economy and military……all great superpower fall……

  5. China has always been the top economy for thousands of years, American was just in the lead for only the pass 200 year, but started to fail while China is going back to where they were before being invaded by 8 countries and civil wars in the last 100 years.

  6. NEWS FLASH: FAKE NEWS RT (America is all propaganda):
    ACTUAL FACTS: Based on data from the International Monetary fund 2018
    1.)The United States has the largest economy in the world at $20.4 trillion
    2.)China $14 trillion
    3.)Germany $4.2 trillion
    4.)The United Kingdom $2.94 trillion
    5.)France is sixth with $2.93 trillion
    This information is published at the World Economic Forum.
    https://www.weforum.org/agenda/2018/04/the-worlds-biggest-economies-in-2018/
    Use Google or any search engine to get these results from numerous sources.

  7. Well, Schiff started off well, but then the second part of the video is just bollocks! The US was Number 1 in 1950, without any competition whatsoever….because of a certain event called World War 2 that destroyed the industrial base of all other great powers in Europe and Asia. He mentioned how easy it was to find jobs that paid middle class incomes. But does he realize that in the 1950s, very few women worked outside the home. Men had no competition for those jobs. The moment women entered the workforce, the number of potential workers doubled, increased competition would force down wages. And most jaw-dropping is that he thinks the fall of the US has to do with increase in size of the government. Does he know that in the 1950s and 1960s, the top tax rate in the US was (depending on the year), usually between 70% to 90%. Taxes today are at a far lower rate than they have been in the years between Roosevelt and Reagan.

    .

    Now, the fundamental reason why China is overtaking the US is because China has 1.4 billion people. For every American in the world, there are four of us! Why should we not have the world's largest economy? China and India were the world's Number 1 and 2 economic power for more than 1500 years. For different reasons, we fell apart and missed out on the scientific revolution in Europe, so we both fell behind. China was subject to Unequal Treaties, colonial wars, extra-territoriality, and loss of territory to various imperial powers. India was outright colonized. But Asia was never going to be held down forever. When World War II destroyed all of the European colonial powers, Asia regained its independence. Today, we are back. China and India will be the world's #1 and #2 economy because we are also #1 and #2 in population (in either order). The US just needs to get used to the fact it's no longer #1. Soon, it will be #2, and before long, it will be #3 behind the Indians. Trump's pathetic trade war isn't going to do zilch against China. When the Indians inevitably over take the US, we Chinese people everywhere will be cheering our Asian brothers! We were, and will be, #1 and #2 together 🙂

  8. Why China took over U S economy . Because the leader let who those companies move out to another country and bring back to sale to U S look at Walmart all that I can call that China store or market. Look a round you ? Sorry I don’t mean to pick Walmart but just for example .

  9. Oh well, I guess it's back to free slave labor for the U.S., since that's what it's foundation is built on. Damn you china for doing it on your own.

  10. Ouch !! Liar, liar … pants on fire! No, darling. In the 1950's, you did NOT have "limited government" We were still within the FDR policies and Keynsian Economics. We had marginal tax rates of about 90%, we had those terrible Sooooooocialist trade unions that bargained for worker's health care and wages, and we had more regulation than you could shake a stick at and knew they could rely on Social Security. Why do you think the big push for de- regulation with the inception of the 1980's? It's because a criminal "market" had to try to get their hands on ALL of our money. Because the 40s – 60's were well regulated and well protected, the people benefited from a strong economy. . Stop trying to lie to people about the 50's and 60's. They were the good old FDR days, the good old semi-commie days. Get a life, fella.

  11. The Americans will not allow the sun to set on their hegemony sadly. They will use their military might to bring back their power positio or die trying.

  12. Honestly, I would like to see a day when the whole world had our Constitution. The right to bare arms and abundance and we could just live without WAR. But I want my borders and I want my culture…So what if it's only a few years old it's mine and I want to keep it!. All we have to do is require companies to manufacture what they intend on selling in an area, in that area or region or country etc…and employ that country's citizens to do the work.

  13. Ha, Ha, ha…industry causes early death in most cases…we let China do it so we clean up our environment and find healthy ways to make a living. well not anymore. we are back!. The Dollar will soon be nationalized and leveraged by America, not a private bank so what happens when a bank goes under?. Does not stop Congress from putting our currency back under their control with the pen. and investors lose big..oh well. Hey China what you going to do when America goe's to Dynamic based currency..You know just uses what we need without the need to print nor tax our citizens just spend spend spend. I could care less if the dollar collapses

  14. Any American believing American economy isn't powerful anymore SHOULD ADVISE Harvard University to shut down for good as American economics is nonsensical because at least 45% of American economy is armoury industry only for American lunatic attitude for bloody conflicts, etc to grind its industries for wealth and worldly imperialism. Such economy isn't "natural".
    Ten years from now other economies will also rise to reduce the economies of US and other western world even furthermore to end with this clique to understand the true meaning of "leverage".

  15. As a Filipinos I'm happy for China economy. That's great China, just tell the world that Asians is most powerful continent. Next decade it's clear that Asia's nation will rising that's great news 🇵🇭👏👏👏👏

  16. In the old days (China was established over 5,000 years ago) the Dragon was the entity to be feared. Now it's the seven headed snake; Israel, US, Canada, Britain, France, Germany and Sadist Arabia. How things have changed…

  17. China is number one because of stupid Trump America is collapsing and all the world leaders is laughing @trump Trump is making the American people suffer China's military is the best China's culture is very respectful as for Trump very disrespectful

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