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Rising Global Manufacturing Momentum Nears An Inflection Point
There used to be a time when US manufacturing set the pace for the entire world, and was the leading indicator for growth in developed and emerging economies around the globe. Unfortunately, in the days of the New Normal, this indicator has lost its potency, and has been replaced by the only variable that currently matters: which central bank is injecting the most credit money into a fungible, globalized marketplace (where for some reason analysts continue to confuse the economy with the centrally-planned market). Still, what the US does has reverberations around the world. Which is why the following chart showing MarkIt manufacturing index (PMI) data for the world's countries may be troubling. Despite hitting a global two year high of 51.8 in September, the key US subcomponent has been on a downward slope since the start of 2013.
Which leads to the question: how much longer can manufacturing for the rest of the world rest on the shoulders of China where the recent resumption of liquidity injections following the banking sector's cardiac arrest in June, managed to pull out Europe and the rest of the world out of a manufacturing/exporting rut. Especially if, as in the past, Chinese "demand" is merely a function of the rate of leveraged growth in the country. And with Chinese credit continuing to hit new destabilizing record highs, it is only a matter of time before the PBOC reruns the entire deleveraging exercise once more, and the yellow and red blocks in the chart above return with a vengeance.
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Are u sure. DARPA and LHM are still manufacturing war and more assasination.
Restore the economy not the TBTFs.
Again, WHO is buying all this alleged "production"?????
In PERU (the only place I know well enough to comment on), we are buying! Record amounts of bearings from Korea, China and Japan.
And, we are having a problem buying some types from Korea, we have been assured that they soon will be raising capacity, building more production lines. This our business really needs..., fewer products means lower sales.
We have TWO economies.
People with jobs - paying any reasonable salary - are doing very well, thank you...they are consuming their heads off, and they keep the Ponzi economy rolling. Here, it's a)forest industry, b)fishing & tourism, c)government d)resource sector workers from elsewhere and e)pensioners, all of whom are quite comfortable, never worry about their income and are confident.
But the number on part-time work, unemployed, in school, living in basements, retired in poverty, on government payouts, etc., is growing and growing and one day (I hope) their numbers will hit critical mass.
And of course DEBT is soaring. Somehow, the whole thing seems unsustainable, based on observation - not government stats, GDP, "unemployment" rate, etc.
If this money-printing spree doesn't result in mass inflation soon, it will continue to result in growing income disparity.
Here in the USA I think you are correct, Kredit. Some (a minority) of people have secure and good jobs, the rest are out on a limb... Yes, the situation is approaching the "Minsky Moment", when all will be shown to be lost. Things here in the USA are indeed worse than they appear. Prepare accordingly.
My above comment re Peru was from a business perspective.
"Somehow, the whole thing seems unsustainable, based on observation - not government stats, GDP, "unemployment" rate, etc."
I think you can remove the words "Somehow" and "seems." Replace "seems" with the word "is." The economy is propped up by toothpicks right now. When enough break, the whole thing comes crashing down. I imagine it's on its last legs.
Forget this smoke-and-bullshit credit economy. Petroleum-based industrial civilization is on its last legs, barring a most uneconomic, blisteringly rapid transition away from oil and the ICE and putting all the navel-gazing economics talk of "substitution" to the ultimate test. The economy being "done" is an inevitability, but it's just the tip of the iceberg. US might hold out 'til mid-century, though it'll certainly be "interesting" times.
New Economy
Twwet
Social Networks
Bull shit
Super Jumbo drinks
Fast food
make up for whores who work at Corporations
Men who are actually women
You gotta earn a living somehow.
I'm buying, Kredit...but only the stuff that's reduced 80-90% (like some textiles, kitchen ware, etc). Also some PMs that are undervalued by 30-40%.
I stay away from the overpriced stuff like houses and stocks. Those will burn ya bad when they correct.
Ditto, Handful...
I only buy on sale. I only shop at the no frills superstore. I buy soon-to-expire food. I can't afford to eat out - anywhere. Even Walmart is not cheap as far as I'm concerned. I pay bills, utilities, property tax, gas and buy only food.
Walmart seems desperate: they sent a flyer last week...glossy magazine-style, but filled not with "the basics" but with deodorant, makeup, condiments, clothing, barbecue stuff, packaged foods, spray-on cooking stuff...all kinds of shit you never need.
Some people must still be buying motor homes, vacations, eating out, dog food, boating supplies, new cars, beer, soft drinks, steaks and NEVER hesitate to spend $2-$3.50 instantly (via debit or credit card, of course) for soft drinks, slurpees, coffees and sugary donuts.
When they have no choice but to stop, there goes the Ponzi economy.
I think there are more and more people like me. What does that mean for house prices, debt, corporate profits and government deficits in years to come?
They have jobs. The rest of us don't. The greatest skill I have is the ability to NOT consume as they want me to. Thankfully I have a LOT in @$700-$800 gold and junk silver.
Thankfully, we're witnessing the death of Consumerism. The only way to get the Ponzi going is on credit. Credit everyone knows people have no chance of repaying. Massive defaults are coming again (student loans and automobiles), then TARP 2. Wash, Rinse, Repeat.
A couple of weeks ago, my banker called me, to tell me they were making loans, and that I should think about taking one. Heard the same from other businessmen.
That has never happened before, and I take it as a bad sign.
"...The greatest skill I have is the ability to NOT consume as they want me to. Thankfully I have a LOT in @$700-$800 gold and junk silver..."
Bingo!
Wow, that chart pretty sums up the "American Manufacturing Renaissance." What a heap of shit.
I agree. I buy less and I haggle over price. To me most items are just grotesque in price, and if I don't need it, it simply does not get bought.
I enjoy fixing my old cars and my appliances when they break, and in 90 percent of the cases it means I keep what I have.
Blindly buying stuff at overinflated prices just get to me.
And, yes, once I get the gold in coins, somehow I don't want to let go of them again, so, (ha ha) forced saving, anyone!?
I love the stock market. 51.8, or barely growing, and the number is celebrated like its the greatest production run in history.
If you take out the fake data, the index probably stands somewhere in the low 40s.