Monday, March 16, 2009

Why China Will Continue to Buy U.S. Treasuries -- Seeking Alpha

Why China Will Continue to Buy U.S. Treasuries -- Seeking Alpha: "What's the risk of some kind of serious instability inside China? Could there be another event like Tiananmen Square in 1989? A lot of people are unemployed. Not just rural labor. We're talking about highly educated college grads. When enough of them can't find jobs, they'll look for something to do."

The UK Telegraph says that there are about 6,000,000 graduates this year. If I remember correctly China graduates about 600,000 engineers every year. That is a lot of very dangerous people. Engineers know how to do things. There will likely be a point where someone asks a question to a room of how to do something technical and some engineer will say, sure I can do that. And you'll end up with a trebuchet able to launch a Fuel-air explosive package. 

If only 1% of these graduates do something that means 60,000 people are doing something. That doesn't count all the other people they have out of work. 

Does this mean revolution in China, probably not, but it does mean change.

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