East Rising, West Declining? How Did Buffett Warn of Trade Deficits in US?

Tiger_SG
05-07
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Recently, more voices have discussed the idea of “East rising, West declining.”

Today, People's Bank of China (PBoC) unveiled 10 comprehensive monetary policy measures across three categories. China stocks opened high and then closed down.

  • Quantitative measures: Includes actions like reserve requirement ratio (RRR) cuts to increase medium- to long-term liquidity and ensure abundant market liquidity.

  • Price-based measures: Involves lowering key policy interest rates, reducing rates on structural monetary tools, and cutting public housing fund loan rates.

  • Structural tools: Introducing and strengthening targeted monetary tools to support innovation in science and technology, boost consumption, and expand inclusive finance.

In 2003, Warren Buffett told a story about two fictional islands: “Squanderville” and “Thriftville.” $Berkshire Hathaway(BRK.B)$

Thriftville worked hard, exported food to Squanderville, and in return received Squanderville’s bonds.

Over time, Thriftville accumulated so much debt that it eventually stopped holding bonds and started acquiring land — shifting economic sovereignty without a war, simply through purchases. Buffett used this story to warn about the dangers of persistent U.S. trade deficits.

Back in 2003, there was no real “Thriftville.” But listening to this story again in 2025, should we start taking the “East rising, West declining” narrative more seriously?

If the shift from West to East is real, then isn't the key question when it will happen?

How do you view this?

Leave your comments or join our topic and post directly HKD Strengthens: Can China Stocks' Rally Continue? to win tiger coins~

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HKD Strengthens: Can China Stocks' Rally Continue?
On May 7, the Governor of the People's Bank of China, Pan Gongsheng, announced a 0.5 percentage point RRR cut, injecting approximately 1 trillion yuan of long-term liquidity into the market. A package of policies to support financing for SMEs will be launched soon. Chinese assets surged in response to these favorable policies. Some believe that Chinese concept stocks are still at low levels, as major tech stocks remain undervalued. Are you bullish on China stocks continued rally? Are they still undervalued or not? How will stronger HKD affect HK stock market?
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Comments

  • MHh
    05-07
    MHh
    Trumps knows the trade deficits and so by implementing tariffs, he hopes to create a new global order. He is not that crazy that many think he is. The real dealbreaker is whether this will pull through. He probably never expect China to retaliate, unlike in his first term as president. He doesn’t want a trade war where his own economy will suffer. He just wants to force parties to negotiate with him. I think the shift from West to east will definitely happen, but not in the next 5 or even 10 years. As long as the other countries cooperate with the US and US has a greater number of world on its side as it seems to be likely the case with many countries striking deals with it, and these countries trade more with the US than China, and the USD remains the preferred reserve currency, this shift won’t happen yet. China stocks will rally especially if talks with trump is successful but I believe it wil be short-lived as investors tend to be less confident in the Chinese market than the US.
  • Mrzorro
    05-07
    Mrzorro
    The shift from West to East may happen one day, but I don't think it will come so fast, at least a few more years to go. China stocks may be a good investment, but not for me at the moment.
    • koolgal: 
      Thanks for sharing your valuable insights 😍😍😍
  • SG 88
    05-08
    SG 88
    Trumpiodic clearly shows the losing end would be the The United States and its citizens.
    They are the only would bear the cost of tariffs, not Chine, not Canada, not the other countries.
    Trump only view his position as the United States President top priority.
    Image the world where every US citizen can't buy what they want but only limited to what they can afford?
    Inflation would spiral, goods become scared and expensive to consume, and US only trade within their own States?
    This is the hard truth, economically and sociologically.
    No one in the world would benefit from Trade War, let alone any war.
    Dictatorship won't will the battle, its only worsen the bilateral relation between countries and brings only global recession.
    @Blinkfans @koolgal @MillionaireTiger @JC888 @BillionaireN
    • koolgal: 
      Thanks for sharing your valuable insights 🥰🥰🥰
  • Zarkness
    05-08
    Zarkness
    It’s only a bargaining chip , the real move is not in the creating of jobs , it’s the money that count ! Don’t believe ? If you can really find the data before trade war and during trade war and after trade deals, u will see where the money goes to!! Just check trump and associated and see what’s happening to their accts !!
    • Zarkness: 
      It’s your good teaching 🥰🥰🥰
    • koolgal: 
      Thanks for sharing your valuable insights 😍😍😍
  • 1PC
    05-07
    1PC
    if the shift from West to East were to happen and When [Thinking]....let's seek the magic crystal 🔮.... [Thinking] I see .... 🤔....some signs appearing..... Ah Ha.... by the end of the Next 🐉🐲 cycle [Smart]..... in the meantime, shift to the HK markets when opportunities arises 🙏
    • koolgal: 
      I would like to have the magic crystal please 🥰🥰🥰
  • koolgal
    05-08
    koolgal
    🌟🌟🌟A strengthening HKD appears to be a positive sign for the region, both as a marker of renewed capital flows and as an indicator of broader investor confidence in Asian, especially Chinese markets.

    With a supporting backdrop of pro growth policies, innovation driven sectors and increased capital flow, I believe that the China stocks rally has the potential to continue.

    However it is important to remain mindful of global economic uncertainties and the inherent risks in a market transitioning from a period of weakness to optimism.

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