by Thursday at 11:59 am•
The first part of Gene Balk's story, "Chinese millionaires pick Seattle as No. 2 place in the world to live, survey shows," concerns a yearly survey conducted by Shanghai-based Hurun Research. What the survey tries to determine are places or cities that are seen as desirable by Chinese citizens with an "average net worth" of about $3 million. The latest survey found that Seattle surpassed San Francisco for the first time ever to become the second most-desirable city for this class of millionaires. Number one is Los Angeles. But Seattle beat even Sydney, Australia and Vancouver BC, cities whose real estate markets have been heated by surplus Chinese capital.
Now here is the thing: China is a surplus country because for the past 20 or so years it has enjoyed growth rates that are unusually high. Capitalist economies can expect to grow about 2 percent. China is still nearly at 7 percent, and for many years grew at nearly 10 percent. The US, during it's moment in the sun (1947 to 1972), enjoyed growth rates between 4 and 5 percent, but that was an anomaly, and it will never grow like that again because, simply, it accumulated a massive amount of fixed capital. And so, it is a saturated economy. And saturated economies must do two things to keep going: export their surpluses to poor countries (for example, Germany to Greece between 2001 and 2010), or become a deficit country whose consumption is sustained by debt (the US can afford to do this because its dollar is a world currency and its debt sells like hotcakes on the world market).Continue reading »