jhungary
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OK, let's talk about micro-economic.
If China continue with its 7% growth each year, yes, indeed they can double their GDP every 10 years. But that was just a mathematical representation that follow the equation of 1.07^10 =1.96 times compound. But there is one major flaw in this mathematical representation. That is, you basing on an uncapped value.(Ie, there are infinite amount of money in the world, iie, the world keep printing money)
In micro-economic term, every financial entity have their cycle of flow. Cash have cash flow, while credit/account payable have their data flow. In fact, money (Hard currency or soft) only change hand, they did not disappear. To establish a 12 trillions GDP and a jump to 123trillions GDP, either it mean China have the LARGEST Pie in the world, or Money have deflated to a point there are no more value into it.
Given the world GDP growth is 3-4% (3.5 in 2012, estimate 3.9 in 2013) the world's GDP at 2040 will be (using 84trillion @2012) 220 Trillions GDP. And now, are you going to tell me more than 50% of the world GDP are coming from China (55% to be exact)?? People who have a slight Economic knowledge will know this is not going to happen. (Given US is only 16% of the GDP share now), then we all know World GDP are going down in % by the years, not going up.
So the only other way when China can get such value is when the global currency being deflated into a point money no longer have any value. Lets say, to be modest, China represent 20% of the world earning power. That's one fifth for people who do not know. That's 615 trillions dollars. For the world to reach that level of total GDP by 2040, the world need to INFLAT their value for 25% EVERY YEAR.........Which, make today monies become tomorrow toilet papers.....
So, for the 123 trillions statement to be true, either the writer imply China hold 55% of the world earning. Or the world is inflating it's currency 25% each year in EVERY COUNTRY. Eitherway, it does not sounded like someone who had any formal financial or economic training, lol
IMF World Economic Outlook (WEO) - Coping with High Debt and Sluggish Growth, October 2012 -- Table of Contents
Gross world product - Wikipedia, the free encyclopedia
If China continue with its 7% growth each year, yes, indeed they can double their GDP every 10 years. But that was just a mathematical representation that follow the equation of 1.07^10 =1.96 times compound. But there is one major flaw in this mathematical representation. That is, you basing on an uncapped value.(Ie, there are infinite amount of money in the world, iie, the world keep printing money)
In micro-economic term, every financial entity have their cycle of flow. Cash have cash flow, while credit/account payable have their data flow. In fact, money (Hard currency or soft) only change hand, they did not disappear. To establish a 12 trillions GDP and a jump to 123trillions GDP, either it mean China have the LARGEST Pie in the world, or Money have deflated to a point there are no more value into it.
Given the world GDP growth is 3-4% (3.5 in 2012, estimate 3.9 in 2013) the world's GDP at 2040 will be (using 84trillion @2012) 220 Trillions GDP. And now, are you going to tell me more than 50% of the world GDP are coming from China (55% to be exact)?? People who have a slight Economic knowledge will know this is not going to happen. (Given US is only 16% of the GDP share now), then we all know World GDP are going down in % by the years, not going up.
So the only other way when China can get such value is when the global currency being deflated into a point money no longer have any value. Lets say, to be modest, China represent 20% of the world earning power. That's one fifth for people who do not know. That's 615 trillions dollars. For the world to reach that level of total GDP by 2040, the world need to INFLAT their value for 25% EVERY YEAR.........Which, make today monies become tomorrow toilet papers.....
So, for the 123 trillions statement to be true, either the writer imply China hold 55% of the world earning. Or the world is inflating it's currency 25% each year in EVERY COUNTRY. Eitherway, it does not sounded like someone who had any formal financial or economic training, lol
IMF World Economic Outlook (WEO) - Coping with High Debt and Sluggish Growth, October 2012 -- Table of Contents
Gross world product - Wikipedia, the free encyclopedia
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