AÂ year ago, it seemed that the entire world was headed for disaster. Credit and spending in the USA had collapsed, foreclosures were rising, manufacturing in China was falling apart and transportation of goods had come to a stand still. Everyone seemed to be affected by the crisis that started in the US. Fast forward one year, and the smell of recovery seems to be in the air, and not just in the USA. In fact, for those who follow the mainstream media, China is the place to be. Their GDP is up and estimated to continue gaining for the next few years, manufacturing has increased, and millions of Chinese are being added to the middle class.
But is it real? Joshua Brown put together an interesting article and asks Is China Frontin’ On Us All?
In my opinion, this is the biggest potential story out there right now. The mere possibility that the China bears are right and that all of the growth there is smoke and mirrors could have cataclysmic consequences on a global scale, nowhere more so than here in Debtland, USA.
If China collapses, what are the effects on our Treasury’s attempts to finance and refinance our way to economic health? And what would this mean to the world’s commodity prices, infrastructure projects and shipping/ transport industries?
We all know the bull case for China: The world’s most populous nation is going from third world to first world overnight, the burgeoning middle and upper class are buying, building and spending like there’s no tomorrow to make up for decades of communist deprivation.
Not many are familiar with the bear case for China, but the number of adherents to this story is growing.
For regular readers of SHTF Plan, the numbers coming out of Washington are highly suspect. We’ve written time and again about GDP growth, unemployment statistics and consumer spending, warning our readers to be cautious, as the numbers don’t add up.
If the USA can cook the books, and we’re supposed to be an open society, then what about China?
Does anyone actually believe that the Chinese economy is growing (at 8% officially), while electric consumption is down (-4%)?
The Chinese have millions of square feet of available real estate space for commercial and residential use. No one is moving in to these buildings. Is this the sign of an up and coming middle class?
While the numbers coming from governmental agencies here in the USA are more than likely cooked, anyone who believes the statistics coming out of China are legitimate is either delusional, or simply doesn’t understand how the Communist political system works.
If you think there is rampant corruption in the USA, go spend a year in China.
Read the article in full: Is China Frontin’ On Us All
Hat Tip to Tom of The North for alerting us to this article
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