Using GDP figure to compare sometimes do not reflect the country strength.

I give an example. Both country has 10 people.

A country has 1 people earns 100k per annum, 9 earn 1k, total GDP 109k
B country has 10 people earn 10.9k, total GDP 109k

Which country is stronger in term of economy, the answer is B.

Another scenario
A country has 1000 people, GDP 1 million
B country has 100 people, GDP 500K

Which country is stronger in economy and consumption power
B

A per capita income 1k
B per capital income 5k

Your size of GDP can be bigger, if you have more population, but it is the per capital income that matter the most, not GDP number.

China economy size in term of GDP may surpass Japan, but Japan economy indeed stronger due to higher per capital income and higher consumption power.
China has >12 billion people, Japan 200 million plus, so there is nothing to cheer off when China GDP size bigger than Japan.
The one to cheer of is when per capital income surpass.

Until per capital income rise substantially, it is still long way China can turn the economy from export based on internal consumption based.
Until them, still rely heavily on export, when you rely heavily on export, then you depended on other particularly US to do well in order your economy growth.
Per capital income is the one, enable your citizen ability to spend more.

Until now, US economy size is still way large than China, be it GDP or per capital income.
It is long long way to go.

Also the disparity of rich and poor, can be widen in the process of economy growth, which even your economy growth a lot, per capital income improve, if bulk of your population doesn't enjoy the economy growth, instead most wealth fall into rich and lead to rich and poor gap widen, it is not something to cheer about.

Per capital income of US is USD 47K
China per capital income is around USD 8k

GDP US roughly 14 trillion
GDP China roughly 5 trillion.

The per capital income gap is still very big.

Do remember, a significant portion of China economy or GDP is contributed by US based company which use China as manufacturing base.

Btw, Malaysia per capital income is around USD 14~15k.

Yes, China has a lot of potential,
20-30 years down the road, may be, immediate next 10 years, not possible.
But one thing is that the widen income gap is not something healthy in term of economy to see.

A strong and healthy economy should close this gap as well.

15% GDP growth can derail the economy, as inflation haunt you back, and potentially bubble bursting make the economy struggle afterwards.

LOL, KLCI ended 11.88
Good number.

Next Monday, first trading day for Rabbit year, market jump like rabbit?

Today is the tiger give the final roar.

Just shared, this has some truth.

http://www.cnbc.com/id/41387362

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Added on February 3, 2011, 7:26 amBillion of people suffer due to inflation just because commodities futures being speculated, due to cheap money, easy money available.

This post has been edited by cherroy: Feb 3 2011, 07:26 AM

Actually with inflation is threatening and a lot of countries unrest because of inflation issue, emerging market that troubled with inflation is not preferred by foreign fund now.

Serious inflation problem lead to
1. Higher interest rate may need to adopt - bad for equities
2. Political instability - bad of equities.

That's why we see US market despite going up, other bourses may not follow.

Just my view.

This post has been edited by cherroy: Feb 7 2011, 11:01 AM

Severe inflation can cause political and social unrest, bad for business as well.

None of both inflation or deflation is preferred, a little bit inflation or deflation, it is good.
Either both of them at high end, is bad.

The good is always at equilibrium. Not either one.

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Added on February 7, 2011, 2:34 pmWhole world pay the price for it.

My view only.

This post has been edited by cherroy: Feb 7 2011, 02:34 PM

A little bit inflation is unavoidable, but not at the degree of like now.
See how oil price and all type of commodities price behave rather stable across during 1980's up to 2004-2005, a mild gradual increase only.

The easy money printing need to be stopped.

That's the problem.
Fed no hint to end QE after QE3, and keep on saying economy need stimulus.

The economy won't die, just suffer some recession or stagnation in between, just like what happened during 80's and 90's, economy recession come and go.
The problem is current central bank no even want to see a single blip of recession, a little recession already cause panic mode.
Recession and booming is a natural cycle, which is good to eliminate the weakness and correct the economy into a better healthy shape for the future.

After QE,
we only see corporate profit escalating, financial management executive getting big fat bonus, while ordinary people suffer from umemployment to need to face severe inflation difficutly.
When financial company face problem, then need public or gov bailout.
So much talk about reform of financial system, now all forgotten.

Copper price is at historical high now, if situation continue like this, soon or later oil price may follow the copper footstep.

See RON97 is at Rm2.50/lit, not far away from 2.70/litre which was one of the reason why BN suffer 308 election shock.

Above just my view.

Boat has sailed out from the port, and you still jump, could mean sink to the bottom.

For those big cap, very norm to see 10~20K Q.

200 million not 2 billion, now is 100 shares per lot.

Still 200 million traded per day is quite huge a number, but if xRm0.20, then it becomes RM40 mil, a big sum, but not a huge sum, compared to big cap blue chip.

Month ago, the real big money traded is on PChem, single transaction already RM20-30 million,

LOL, give people a scare -54 on KLCI.

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Added on February 9, 2011, 10:18 amyup, it is -2.xx

This post has been edited by cherroy: Feb 9 2011, 10:18 AM

Whole Asian bourses are stagnant throughout from late Jan to now.

Whether US up up up or not, Asian bourses generally hardly move and like to trend downwards, although not big move.
Very cautious market condition, probably due to inflation and Egypt unrest effect, as if inflation situation become more serious, there is every possibility political instability as well.

So much talk about CPI in US is very tame if stripped out foods and energy.

But foods and energy is something we need to consume daily.

Unless foods and energy is not needed then the CPI without foods and energy make sense.
Talk good, feel good about the CPI number, while ordinary people out there suffer.

Foods inflation is pretty serious across the globe now.

Yesterday already give us warning with -56 points.

-56 is enough blood.

MPHB - Multi Purpose Holding Berhad

It is holding company.