Tuesday, May 17, 2011

The U.S. Warns China Is Closing Up Again

Five years ago when every financial commenteur finally figured out that everyone should be invested in China and people like Peter Schiff and Jim Rogers were yapping about China being such a great investment, we were contrarily remarking that Chinese officials had lost control of monetary policy and a stock market collapse was imminent.  And collapse it did.  It has not recovered.  And there are many reasons to believe that recovery may never take place.  Or may take thirty to fifty years or longer.  That is, if social unrest doesn’t completely implode the system as it is currently devised.   

We have written extensively on the future of China.  And none of it good.   Most of our major writings were before the 2008 collapse, so we are really just waiting on events to unfold. 

Those who finally realized there was a real estate bubble in China over the last few years have missed the scope of the horror in the Chinese economy.  China’s primary dilemma is NOT a real estate bubble as we have remarked countless times.  It is a capital bubble.  And the outcomes of one versus the other are massively different. 

We have cited the ridiculousness of linear projections from idiots anticipating a $50 trillion Chinese GDP in a few decades to the asinine China projections of Goldman Sachs and now the incompetent bankster and economist pinheads at the IMF who are now expecting China’s economy to surpass the U.S. by 2016.  My God, the world is full of incompetent idiots in positions of authority.

We have contrarily said China’s GDP could drop by as much as 50%.  As a comparative, the drop in U.S. GDP during the Great Depression was roughly half of that to give you an indication of the horror that will come to pass in China.  Yes, it will come.  It has been ordained long ago by the incompetence of authority.  And while buffoons like Timmy Geithner expect the yuan to rise, we have written forever that the yuan is headed south by the time this crisis has passed.   You wanna own a currency where GDP is going to drop through the floor and there is already no rule of law to speak of other than the rule of force?   Let me know how that works out for you.  

For new readers, there have been countless dynamics regarding China that we have discussed.  But one that is coming to pass just recently is this;  the political idiots in the U.S. are now claiming that China is closing up again.  Why yes, we wrote that would happen many years ago as the communists attempted to keep control in a deteriorating economic environment.  And yes the economy in China is deteriorating regardless of the growth numbers that are printed in the headlines.  As we wrote quite some time ago, the massive spike upwards in auto sales, real estate and other consumer expenditures tells us that the Chinese economy is actually in the process of collapse as it has been since the 2008 crisis.   Understanding this dynamic and how capital flows through an economy was one of the first posts we put up on the blog six years ago.  And just as we said back then, it will lead to eventual devastation.  And as part of that, that multinationals who have invested heavily in China would be taking it in the shorts.  Big time.   Or as we have written, this cycle could be coined the ‘end of big’.   These firms could possibly even lose their investments completely if the communists feel threatened enough to nationalize private assets.   And as we wrote, the political idiots in the U.S. are effectively arming states that are enemies to our way of life and our democratic ideals by encouraging American firms to transfer our sovereign wealth to places like China.  But just as we wrote long ago, American firms loved the Nazis too.  They were good capitalists just as the Chinese communists are.  That is, until the Nazis too started closing up. 

If this comes to pass, the corporate state will seek to protect its interests.  And that means by force if necessary.  Something we wrote about in our discussions on volatility and the war cycle.

It’s all coming to pass as we expected.  We are simply in slow motion because of the profligacy of political idiots throwing tens and tens of trillions of dollars at a corrupt global economic system in order to save the monstrosity they created.  A monstrosity created out of massive fraud and corruption. 

Title link here.

posted by TimingLogic at 10:22 AM