Chinese Economy Slows Further - Monetary Conditions Tighten As Credit Growth And M2 Both Come Below Consensus

Tyler Durden's picture

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Tulli's picture

It's all good.

Zero Debt's picture

Marc Faber's comment that the USD is no longer a valid unit of account really stuck with me. Because then, the RMB cannot be a valid unit of account either!!

If M2 is growing 17% and the nominal GDP grows 8%, then the economy is barely generating 0.5 RMB of activity per money base added. I can't wrap my head around this. Does it mean that the Chinese economy is contracting?

papaswamp's picture

I think the data is BS...just gives the Chinese reason to keep the yuan depressed.

ivars's picture

Seems that my February 6th predictions were fairly accurate when the stock market (DJIA) will peak. I predicted it will peak on Feb 15th, in the graph below. It did peak ( anyone doubts we are heading South from here?) at February 18th, just over weekend from my prediction. Now let us see what happens next, but all latest the news are encouraging ( meaning BAD) for the following months forecast. Its going to go down till end of May/beginning of June. Then a small lift, perhaps QE3, perhaps Oil prices will drop temporarily.

Also, my Oil price prediction from February 6th showed correctly the first peak in Oil prices in the end of February and now is showing correctly the drop during middle March. What it shows next, is a bigger peak than first one, with prices reaching approximately 10USD higher levels ( e.g Brent around 125-130 USD) then in previous peak, around April 1st.Then a drop again, to the same levels as today, in early May. And then it really starts going up. Its all mostly related to supply disruptions in Arab world, however, now we have also potential demand increase if nuclear sites worldwide are going to be closed for inspections/safety add-ons.

The graphs themselves are built by pattern matching after shocks for individual stock indexes and commodities , and for them to work, the index/commodity must be truly global, influenced by information from all over the world. Hence for DJIA and Oil it may wrork relatively well, let us see.

I explain how I made these graphs here:


I am taking the patterns of each commodity or stocks as they developed in the aftermath of 9/11 when the world experienced a shock and after that, an unprecedented period of NEVER before seen cooperation which later led to de cooperation , e.g on Iraq war issue etc.

So, in the period of Sept 2001- 2004-2006 the world slowly underwent transition from absolute cooperation ( remember Bush approval in the USA was 90%?) to normal deco operation levels. That impacted reactions to all information flows, aggregate reaction of people etc.

I try to match the graphs after 9/11 to graphs after another similar in its psychological uniting ability, financial shock of September 2008-March 2009 when world again showed extreme abnormal cooperation and synchronization of actions. And then it starts to de cooperate. The patterns should be the same, as each graph has its own time constant and interacts with all the other patterns in the world, aggregate the information- its well known that DJIA is , in fact, a biggest global information market, not just stock value market based on business performance-which has its own internal reaction times etc.- can be seen from linear damped oscillator response function to e.g. 2008-2009 financial shock. But, the graph has several pockets of non-linearity which damped oscillator does not have, like 2010 April-September dip. However, for information market as DJIA, its a typical dip whenever recovery happens after some shock , almost on all scales ( if not washed out by some bigger event).

I consider 9/11 and 2008 financial crisis comparable on scale of impact of cooperation levels shown by people involved, each by its own reason, but with the same behavioral patterns resulting.

There are some assumptions in it which make this exercise not so linear, that is where to place 9/11 on post 2008 graphs. That is a little trick to which I think I have found explanation, but would not delve into it now, as that is the key, but , if someone thinks about it, there is a logical place for a shift between minimums as preparations and decision making leading to 9/11 where done in secrecy and thus did not show up in DJIA , but it should have, if it had been known as decisions resulting in unavoidable act of terror with at fist unknown, than known targets, but unknown outcome.

After that, its just pattern matching plus some wishful thinking ( see my latest here on Silver- I essentially draw the graph, looked at it, and predicted an attempt to return to gold standard by whoever wins in 2012 - an attempt which most likely will either fail or will not look like Ron Paul imagines it today).

And so graphs are born, and then tested repeatedly as scales are changed , stretched, and timing remains the most difficult thing to be exact with.












Sudden Debt's picture

M2 money growth of 15.7% is totally normal... is show us inflation is nearly non existend...


jerry_theking_lawler's picture

TD....Borrrring...where is the juicy news today??