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Neither the US Nor China Will be an Engine For Global Growth Next Year
The investment world is banking on real growth being just around the corner.
However, the data does not confirm this view.
Let’s talk about China first. Half of all global growth is expected to come from China, which is forecast to grow by 6.5%-7% next year.
Now, China’s economic numbers are for the most part fictitious. However, there is one metric that cannot be fudged and that is electricity consumption. Either electricity is being used or it is not.
With that in mind, we must consider that China’s electricity demand is collapsing, having fallen to a year over year rate of 3.5% in August 2014.
Source: Zerohedge
Indeed, given that Chinese electricity consumption cannot be faked and is growing at just 3.5% year over year, we can safely assume that China’s economy is likely growing at a pace more like HALF of the official forecast of 6.5%-7%.
So China will not be driving global growth.
What about the US?
As is the case in China, official GDP growth numbers in the US are massaged to the point of being fictitious. The reason for this is that all “adjusted” GDP data involves a “deflator” metric that is meant to adjust for inflation.
The Feds often use an inflation adjustment that is even lower than their official Consumer Price Index metric (which is already massaged to downplay inflation) in order to make GDP growth look greater.
Consider this simple example. Let’s say that the US GDP grew by 10% last year. Now let’s say that inflation also grew by 10%. In this scenario, real inflation adjusted GDP growth was ZERO. However, announcing ZERO GDP growth is a major problem politically. So what do the Feds do? They claim that inflation was just 8%, and BOOM you’ve got 2% GDP growth announced for a year in which real GDP growth was actually zero.
By using nominal GDP measures, you remove the Feds’ phony deflator metric. With that in mind, consider the year over year change in nominal GDP that has occurred.
As you can see, we’ve broken below four, the reading that has been triggered at every recession in the last 30 years. At best, we’re flat-lining. At worst we’re already in recession again.
Don’t believe the hype both China and the US are making up their GDP growth numbers for political reasons. Neither will be a major engine for growth next year…
Which means that the markets are completely mispricing what’s coming… and the stage is set for another Crash.
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Best Regards
Phoenix Capital Research
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Pinniochio's nose is no longer available for the little engine that could .
He's knocked off for the as per Union rules .
Now :
https://www.academia.edu/8945501/Dinosaur_Death_by_Dwarfism
Why do people who are victims of the reigning monetary order use words and phrases designed to disguise its real purpose? China and the US elite are the principal engineers behind growing impoverishment world wide. Rising prices are not growth. Falling incomes is not growth. Junk consumer items that last only 20% percent as long as the same item did 30 years ago is not growth. That is a 500 percent increase in the items true cost. And Inflation is theft.
"Engine For Global Growth"? Not quite. The US dollar is an engine of plunder, just as the British Pound was. It is that irresistible, invisible force grinding billions worldwide into more debt and forcibly down to a lower rung on the economic ladder. That is why police forces worldwide have been militarized and act as though they are an occupying force in a conquered country......acting as the elites protectors and the common persons intimidators. If you can imagine a giant suction machine invisibly sucking up wealth worldwide and depositing it in the bank accounts of the .01 percent, you are not far off from reality.
+1.
America is growing-Bullshit! Things are not all that great in my area regardless of the message from Yellen and the media. In fact it has gotten so bad that I could not sleep last night. I was haunted by fear and I found that all the reassurances by Janet Yellen and the Federal Reserve did not help.
Like the young boy in the movie years ago the spirits of those who once filled the world with life will not let me rest, in this case I'm haunted by dead businesses and not people. The article below concerns the cost and problems of buildings sitting vacant because of business failures. I have my finger on the pulse of small business and it is far from healthy.
http://brucewilds.blogspot.com/2014/10/i-see-dead-businesses.html
When I drive through areas that I left a long time ago, the change is really apparent. Lots of "for rent, for lease" signs, and just closed and vacant buildings. I talk to older guys working, and they tell me they can't retire. I think of the billions and billions wasted by our government that was OUR money, and it should have been taken care of, but now it's gone, and security is vanishing. I totally get how you feel. And it shouldn't be happening, but it is.
In a world where they tell us information flows freely it is amazing how little we really know. The debate continues as to how stable china really is. I say watch the housing in China the best you can.
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.
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
Banking on False Assumptions.......
Haven't we seen that somewhere before?
Unsurprisingly, both will be looking to exploit burgeoning regions as much as humanly possible. Look for Chinese endeavors in Africa and American endeavors everywhere else.
I plan on buying nothing except basics. Very basics.
The big boys have failed .
Time for the Small Ones .
https://www.academia.edu/8942403/The_Hysterical_Focus_is_your_friend_
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