Friday, March 23, 2012

Even More Evidence of a China Hard Landing

Russ Winter writes:
The latest container shipments into the port of Los Angeles and Long Beach confirm that China (and Asia) is no longer nearly as much in the game. Inbound is down 10% from last year and 20% from the same month in 2007... 
Incredibly the “sistema” is being pulled out round the clock to circle the wagons explaining how China is just fine. The truth is that China has been in steady deterioration for over a year. The problem with China lies in its overcapacity, which so severe that a mere “slow down” is not possible.  Since fixed asset investment is far more than this economy needs,  when this falls it falls big, which is exactly what is happening. Do the following charts look like a soft landing 7% GDP growth scenario to a thinking person?

The "overcapacity" actually is the collapse of the Chinese central bank money manipulation economy. The People's Bank of China is fearful of printing enough money to prop up the phony capital structure because of price inflation ramifications. Thus, the PBOC will print some but not enough to hold up the structure. Result a massive, severe bout of stagflation.


  1. I'm definitely not debating that China will experience a slowdown, crash or whatever the term might be, but could the stagflation route you're referring to end better than if they were to print enough money to support their capital structure for the time being, sowing the seeds for a greater collapse?

  2. I think it's an oversimplification to blame this purely on central bank policies. This is happening in conjunction with a major slowdown in the US, China's number 1 importer. If you're depending on export-led growth like China, the obvious needn't be pointed out further...

    Yet, in the end, we could blame it all on central banking, as America's import bonanza was financed in large part by the fed's red-light district monetary policies, which gives you a lavish lifestyle in the short-run, but eventually and inevitably ends up an old, withered, broke and pathetic country that no one wants to fuck.

    Thus, China is a pimp without a hoe.