Some Volatility Is Good for the System: Shilling

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Feb. 11 (Bloomberg) –- A. Gary Shilling & Co. President and Bloomberg View Columnist Gary Shilling discusses Goldman Sachs Chairman and CEO Lloyd Blankfein’s comments on volatility and China with Alix Steel on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Of places in the world have been burdened by the international financial systems and are now going to be contributors to that system.

Better education, better growth, flattening world.

People are making things that other people want.

Labor is finding its own level.

It is a good bet for the long- term, but it will take a long time to get to the long-term.

We are back with gary shilling.

Gary, what do you think about that?

When is volatility good?

Volatility keeps people honest, for one thing.

Stable growth instable situations, those are usually unique levels and they tend to break to volatility, which is important.

But obviously volatility is disruptive, making it difficult for his this is to know how to gauge inventories, for investors to know when securities our goodbyes, bad buys.

A certain amount is good, as they say, to keep the system in balance, but there is a golden mean in the middle.

It will take a long time to get back.

As i mentioned earlier in the show, i wrote a book called the age of deleveraging.

I look at where we are now and what we are going through, it normally takes about a decade after major leveraging up and a financial crisis.

We are six years into it.

If history is any guidance, we need another four years.

That is two percent real gdp growth.

Lloyd blankfein also talking about china and how important that country has become.

The whole world really depends on china working out well.

Anywhere in the world, it is better for country in which growth is occurring, but the growth needs to come up in the country with goods and services that add to the prosperity of the world.

We really need that growth in china to occur.

Is that right?

Do you agree?

To the extent that they are successful in doing what they are trying to do, being an export led economy to a domestic led economy.

But growth does have to be generated in the u.s. and europe, which directly or indirectly purchased those exports from china, fueling that economy.

It is not china that is the prime mover, it is europe and the u.s.. the chinese leaders are smart guys and realize that they have to been to the domestic economy, the consumer spending there is only 30% of the gdp.

That is off the map.

No other country has less than 50%. such a pleasure to have you here.

Gary, i appreciate your spending

This text has been automatically generated. It may not be 100% accurate.

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