This page has been archived and commenting is disabled.

China’s Storm: 2016

Pivotfarm's picture




 

There never seems to be a day that goes by without someone predicting that China is going to go down the Yangtze and end up some creek without a paddle. There never seems to be a day that goes by without, whatever the results from the Middle Kingdom might show, someone somewhere predicting the imminent failure ,and the West’s (read: the USA’s) revival and rebirth from the flames of financial catastrophe. Why is it that human nature in the West makes us want the ones over there to fail and for us to succeed? Wouldn’t it be possible to succeed because they are also doing pretty well?

It’s the PNC Financial Services Group that is now talking of a ‘prefect storm’ brewing in the midst of theChinese and ready to unfurl its wrath in 2016. Even Nostradamus would have had a harder time predicting what the financiers think they can get right, wouldn’t he? So will it be the ‘perfect storm’ or just another storm in a teacup as usual. All wind and no sails. China was predicted for decades to be ready to overrun the world. But, it didn’t quite happen the way people said. President De Gaulle of France said that China would be the only thing that united Europe. Little did he know that it would be Europe that would disunite Europe. China has now been predicted to fail dismally, to suffer from corruptive measures and to sink into the abysses of the darkest recesses of the economy because it has a housing bubble. Diverting the focus of attention from our own backyard is always good for the masses. The sheeple prefer that, don’t they? Life is so simple. We are good. The Chinese are bad and so doomed to failure.

Stuart Hoffman, Chief Economist at PNC Financial Services Group stated in a recent report: “Several problems long on China's back burner are likely to come to a head by 2016”. He said that China would be paying for the weakening of the credit market along with the slowdown in reinvestment and earnings as well as the impending housing-market correction. The prediction is a slowdown in Gross Domestic Product to just6%, which would be the lowest since 1990. But, didn’t people already predict that the Chinese wouldn’t be getting anywhere close to 7% even for this year already? Now we read of the expansion in the second quarter of this year of the Chinese economy to 7.5%. That was above expectations that were equally as damning a few months ago that China would only get to 7.4% in the second quarter this year. Wrong again.

What never ceases to amaze is the scaremongering economists that predict and then when they get it all wrong they simply fade away into oblivion until they predict the next downfall of the Chinese giant.

There are others that are confident about the Chinese economy. John Zhu, China Economist at HSBC stated: “A lot of economic analysis tries to extrapolate micro-level analysis to the macro-level. There are so many other variables and policy levers that could be pulled”. He believes that growth will continue around the 7%-mark and will be nowhere near 6%.

What PNC Financial Services Group fails to take into account is that we can hardly say that the Chinese are going to fall to 6% and at the same time say the West is going to increase in economic activity and that the recovery is really here to stay now. All of that will be linked. If the recovery is here to stay, then the Chinese will benefit from that since exports will increase due to our purchasing of them. If the housing market does fall then infrastructure investment in the private sector by the Chinese state will offset that. Admittedly falling prices in the housing sector are leading to fewer investments. New home prices in China fell by 0.5% (70 cities) over the past month, which is the second monthly decline in a row (May fell by 0.2%).

There is also the problem of the soaring debt in China, which has now reached 251% of Gross Domestic Product (while standing at 147% at the end of 2008). China has admittedly relied heavily on credit since 2008more and more. China has tried to slowdown growth and the reliance on credit.

Still if the worst came to the worst, what would they do? Write off their debt like everyone else will end up doing.

Originally posted: China’s Storm: 2016

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 07/28/2014 - 06:36 | 5011929 hedgiex
hedgiex's picture

Still using Keynes or whatever models to measure China. These models were developed or refined for Western industrial nations when China was not around. It only came into the pix 30 years ago.

China is state capitalist and only have few windows open to free market practices. Eg No independent Central Bank, Large State Owned Banks are credit allocators to sectors not your gunslingers. So you use your fancy monetary model to measure outcomes and conclude crashes from there. (Just one example).

A stimulus there is going to be a stimulus to ensure no social unrest and they not going to give a s""t  as to whether it is 7% growth or whatever. Do you care if you play long term ? No social unrest means more BS can be fed to the people to sacrifice to  build a superpower.

The shorts have been have been going for years and still no orgasms.

Get it..that it is still stupid people there being sold their version of Oligarchy. The Oiligarchs shall continue to set out this wave to eat lunches. Connect with the People and ignore what s**t that is published or analyzed. You just get further duped by the divide and rule of the same 99%.

 

Mon, 07/28/2014 - 06:49 | 5011940 Leraconteur
Leraconteur's picture

China is state capitalist and only have few windows open to free market practices.

 

It is almost a certainty that when someone from outside China offers an opinion, it is wrong.

In this case, there are hundred's of millions of windows open to free market practices.

The entire country is lined on every sidewalk with businesses that are 10ft wide and 30 ft deep.
In the back in a corner is a bed 2 feet by 5 feet, a heat induction electric hotplate and/or modern coal slug Franklin stove, an LCD panel, a keyboard, mouse and pc to stream tv shows over the internet.

They live there, on that bed in that corner in that 25 sq feet with 275 sq ft being allocated to the commerce that allows that 25 to exist. 

Do the math for your life and see the huge difference. Their living:work ratio is 1:11 whilst yours is 60:1. 

There are hundred's of millions of these businesses - copy shops, restaurants, convenience stores, dry cleaners, music shops, hardware stores, chemists, repro shops, sign makers, bike repairmen and on and on. 

Mon, 07/28/2014 - 06:36 | 5011928 hedgiex
hedgiex's picture

Still using Keynes or whatever models to measure China. These models were developed or refined for Western industrial nations when China was not around. It only came into the pix 30 years ago.

China is state capitalist and only have few windows open to free market practices. Eg No independent Central Bank, Large State Owned Banks are credit allocators to sectors not your gunslingers. So you use your fancy monetary model to measure outcomes and conclude crashes from there. (Just one example).

A stimulus there is going to be a stimulus to ensure no social unrest and they not going to give a s""t  as to whether it is 7% growth or whatever. Do you care if you play long term ? No social unrest means more BS can be fed to the people to sacrifice to  build a superpower.

The shorts have been have been going for years and still no orgasms.

Get it..that it is still stupid people there being sold their version of Oligarchy. The Oiligarchs shall continue to set out this wave to eat lunches. Connect with the People and ignore what s**t that is published or analyzed. You just get further duped by the divide and rule of the same 99%.

 

Mon, 07/28/2014 - 03:07 | 5011729 novictim
novictim's picture

How the Hell would anyone even know what the GDP in China was?  It's all lies and Ponzi schemes with a debt worse than that of even the Japanese.

Come on!  Empty warehouses that claim to have stock piles of copper and rare earth minerals?  Multiple empty cities?  Known capital flight and a loss of manufacturing jobs that is accelerating, not slowing down? 

Can someone step forward and just say it?  The Chinese "miracle" has just been one big accounting trick!

Now it is only the reluctance of the international debt holders to unmask the charade that keeps things still afloat. 

But once the debts start being called in then the flood gates will open...China and her lenders will be sunk.

Tick Tock Tick Tock...no one wants to be the last one holding the bag. Who will be first to cash out?

Mon, 07/28/2014 - 02:02 | 5011679 hwa-jurong
hwa-jurong's picture

Good Day !!!!!

     I am Hwa Jurong, a Reputable, Legitimate & an accredited money
Lender. I loan money out to individuals in need of financial assistance.
Do you have a bad credit or are you in need of money to pay bills?
i want to use this medium to inform you that i render reliable beneficiary
assistance as I'll be glad to offer you a loan at 2% interest rate to
reliable individuals.

       Services Rendered include:
*Refinance
*Home Improvement
*Inventor Loans
*Auto Loans
*Debt Consolidation
*Horse Loans
*Line of Credit
*Second Mortgage
*Business Loans
*Personal Loans
*International Loans.
     Please write back if interested.
Upon Response, you'll be mailed a Loan application form to fill. (No social
security and no credit check, 100% Guaranteed!) I Look forward permitting me to
be of service to you. You can contact me via e-mail: hwa_jurong@yahoo.com.sg , hwajurong12@gmail.com , contact@hwa-jurong.com ...
Yours Sincerely,

Hwa Jurong(MD).

Mon, 07/28/2014 - 03:47 | 5011744 highly debtful
highly debtful's picture

Good Day !!!

I am Highly Debtful !!! Given my name you will understand that your services are of great interest (no pun intended) to me !!!

But let me give you some great marketing advice !!! For free !!!

You haven't chosen your advertising medium quite carefully enough in this case !!!

What you're doing is a bit like selling bibles door-to-door in the vicinity of the Ka'aba during Hajj !!!

Mon, 07/28/2014 - 01:40 | 5011662 theyjustcantstop
theyjustcantstop's picture

lets see those stupid chinese spent their $ 6.6 t stimulus on infra-structure, and america spent at least that much enriching the .0001% ers, militarized govt. against it's own citizens, and purposely put america it's self at real risk. 

 

Mon, 07/28/2014 - 03:00 | 5011720 Savyindallas
Savyindallas's picture

No kidding  -but you left out the hundreds of billions tha 0.0001 percenters spent on "Homeland Security" building Fema camps, tanks, bullets, domestic drones and AR15s to protect their sorry assess when the masses come after them.

I think they better spend a lot more. The masses still have far more guns and bullets-- the onlything that saves us from the Banksters who are destroying and enslaving this nation .

Sun, 07/27/2014 - 23:48 | 5011506 jack stephan
jack stephan's picture

Year of the monkey, will it use it's powers for
Good or for evil, that's the news

http://www.youtube.com/watch?v=pHn6Pe8p1RM&sns=em

Sun, 07/27/2014 - 22:50 | 5011374 manofthenorth
manofthenorth's picture

I stood in the National Museum in Taipei looking at works of art 8000 years old !! I would bet a pile of nuggets that China will be around long after the USA and many other countries have been relegated to the waste basket of history. The greatest threat to China has always been China. Ironic that the USA is now the greatest threat to the USA.

Mon, 07/28/2014 - 01:35 | 5011655 dag
dag's picture

China will still be around but not the PRC - there is a difference.

Sun, 07/27/2014 - 22:42 | 5011349 AdvancingTime
AdvancingTime's picture

The debate continues as to how stable china really is. Much of the recent growth in China after 2008 came from a massive 6.6 trillion dollar stimulus program that expanded credit and poured massive amounts of money into the system. This money encouraged expansion and construction with little regard as to real demand or need. Like a plane on autopilot China continued in the direction it had been on.

Now China finds itself in a credit trap. For years the people of China have had the habit of saving much of what they earn but the low interest rates paid at banks has not rewarded savers. With few investment options much of this money has drifted towards housing and driven housing prices sky high. The economic efficiency of credit is beginning to collapse in China and the unwinding of China’s giant credit spree could be very painful. More in the article below.

http://brucewilds.blogspot.com/2014/03/china-and-great-credit-trap.html

 

Sun, 07/27/2014 - 22:07 | 5011271 TeethVillage88s
TeethVillage88s's picture

Someone should lay this out properly.

I'm not the expert, but have an opinion

A) US Government may have kept us out of currency collapse for 44 years or more and deserve some recognition.
B) Bankers may have controlled the US Currency, Credit, Federal Government, Economy, and K-12 Text Books since 1913 and this should be known.
C) US Spy Agencies may have married up with Finance, Axis Gold, Japanese Yamashita Gold, and with incorporating Proxies to carry out CIA or other Secret Business and Drug Business and that should be known.
D) If US Spy Agencies are running drugs while supporting a drug war, OR are running a hidden finance system based on illegal gold, money, or drugs they this should be known.

China and other countries maybe in trouble for businesses that rely on annual loans to keep the business afloat or may need low interest loans to float Investment Companies.

Ignoring the False info from MSM or Talking Heads on TV... we are left with politicians that don't tell the truth, and huge national secrets to hide about US Power, US Research, US Weapons, US Spying, US Blackmail, US Financial Deals, and US Secret Agencies with the secret deals that they have made after WWII.

Domestically, it is clear that lies about the value of gold sit along side of lies about the strength of the US Economy. Maybe the secret part of our government has lots of gold and precious metals hidden away some where. This makes fools of US Investors that rely of Official Federal Government Data. This is similar to AAA Rated Toxic assets and US Independent Accounting firms certifications of Enron.

Secrets upon Secrets. I'm not a bad guy. But Investors are at Risk from all of the US Secrets made by the Government. Think Microsoft, CISCO, HP, IBM, Google, and Apple. And that is just the direct risk to investors.

What I really wanted to say was... Maybe I give up.

I give up on the complexity of running a super-power. The NATO & Axis Treaties that allow Nasi's and Imperial Japan to go unpunished for Strategic Reasons... Maybe I give up. Maybe I can't find the ethical high ground any more.

Is there Ethical High Ground when Treaties and Alliances Serve the National Interest... and the ephemeral fight against communism.

My only concern is that globalists have formed an Elite Cartel that no longer sees common people as Equals or as economic equals that should be defended and protected from Neofeudalism or Serfdom.

True

Sun, 07/27/2014 - 21:57 | 5011250 QEternity
QEternity's picture

I thought this was going to be a good article.

Do NOT follow this link or you will be banned from the site!