That, dear reader, is what the media, the high flying economists, the serious, oh so serious, news anchormen on Bloomberg and Alice in Wondervision, would have you believe. The Chinese economy is in decline, it is crumbling and look what the decline is doing to the prices of commodities. They are in free fall, have been in free fall and are going to continue free falling until the Chinese economy starts growing again.
The Chinese economy in 2015 has grown at a rate which every European and American leader would regard as justification for a national celebration.
The facts are that Chinese growth in fixed investment has fallen to a 15 year low and is expected to come in at 4.5% for 2015. In November credit growth in the Chinese economy fell to 11.8%, close to an all time low – this growth the pundits said caused copper to fall to its lowest since 2009.. Also in November fixed asset investment data was described as damaging, with growth of 10.2%, the lowest for 15 years. As for that bell weather as to the strength of a country’s economy, Chinese passenger car sales, rose by 13% in October.
But the world is now being brain washed to accept that China is to be blamed for the slump in commodities and all the other evils which beset western economies.
The geniuses of the financial columns deliberately ignore the truth because either lies make a better story or there is a huge western conspiracy to cover up the truth. And what is being covered up – it appears to be the fact that nobody has a clue why western economies are in such a mess and commodities are plunging to levels not seen for decades so lets blame the Chinese.
In November amidst all this good news from China, Anglo American (AAL) fell to its lowest since 1999 and fears grew that it would have to cancel its dividend, hedge funds dumped 368 tonnes of gold in 3 weeks, BHP Billiton (BLT) fell to a 7 year low after falling 5.64% in one day. Iron ore fell to a new low of $40 per tonne and then on the 7th December dropped into fantasy land with a further fall to $38.90 compared to $190 per tonne in 2011. Coal became virtually unmarketable as Maggie Thatchers wisdom in decimating the British coal Industry decades ago, became clear for all to see and Moody’s forecast that in 2016 diamond miners would be forced to cut prices even further.
The latest undisputed data from China is that 3rd quarter growth came in at 6.9%, its lowest since 2009 and retail sales in the first 9 months rose by 10.9%. Mouth watering figures by western standards.
The pundits try to make us believe that the main cause of the commodities meltdown is a non existent economic slowdown in China. That can not be true but I wonder what the real cause is.
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