Global finance officials promise to shore up sagging growth … Finance officials of the world’s biggest economies promised Saturday to use “all tools” to shore up sagging global growth and to avoid devaluing their currencies to boost exports … -AP
The just-held G20 meetings are being reported by the Western mainstream media with a “facts only” context. In fact, as usual, China’s problems are reported on gently, if at all.
It is China, after all, that holds the economic fate of the world in its hands. It is China that is fueling a lot of the international buying of real-estate, commodities and even consumer goods.
The US is supposedly headed back into recession and Europe never left. China is the biggest factor in world economic growth.
If China falls, so does the world. That’s why the Western mainstream media never reports the deepest and darkest truths about China.
But gradually China’s intractable troubles are showing themselves in ways that cannot be denied.
China’s stock markets have crashed repeatedly, and its growth slowed again in 2015 and is predicted to slow once more in 2016. Latin American trade, which has been substantive, has slumped by astonishing 50 percent. Trade with Brazil is down 60 percent!
But these sorts of statistics are still not as popular as the “Chinese miracle” theme. They are not being broadcast fully, even at a time when Western media is grappling with a stream of bad Chinese news.
Let’s look at a bit more of this AP article excerpted above to see how gently even the most dismaying Chinese news is handled.
Finance ministers and central bankers of the Group of 20 rich and developing countries tried to reassure jittery financial markets that the global economy is healthy, though they acknowledged in a statement that they “need to do more” to boost growth.
Soft enough? Now you need to quote domestic officials who can provide the appropriate spin such as China’s top economic official, Premier Li Keqiang, who said the following in a video message to the G20: “The Chinese economy has great potential, resilience and flexibility, and we will capitalize on such strengths.”
Let’s contrast this sort of reporting with an article that David Stockman wrote last year entitled, The Great China Ponzi – An Economic And Financial Trainwreck Which Will Rattle The World.
China is not a clone-in-the-making of America’s $18 trillion consume till you drop economy—-even if that model were stable and sustainable, which it is not … Its leaders are neither wise nor deft economic managers.
In fact, they are a bunch of communist party political hacks who have an iron grip on state power because China is a crude dictatorship. But their grasp of the fundamentals of economic law and sound finance cannot even be described as negligible; it’s non-existent.
Indeed, their reputation for savvy and successful economic management is an unadulterated Wall Street myth. The truth is, the 25 year growth boom in China is just a giant, credit-driven Ponzi scheme. Any fool can run a central bank printing press until it glows white hot.
At the end of the day, that’s all the Beijing suzerains of red capitalism have actually done. They have not created any of the rudiments of viable capitalism. There are no honest financial markets, no genuinely solvent banks, no market driven allocation of capital and no financial discipline which comes from the right to fail as well as succeed.
Harsh as this assessment is, it is close to our own. For nearly a decade, we’ve been writing that the Chinese miracle was merely monetary bubble. Of course China is a huge country with a huge population, so it takes a while to blow a bubble in China to the bursting point.
But that’s happening now. Stockman followed last year’s article on China’s Ponzi scheme with a new one published just a few days ago:
China is on the cusp of the greatest margin call in history. Once asset values start falling, its pyramids of debt will stand exposed to withering performance failures and melt-downs. Undoubtedly the regime will struggle to keep its printing press prosperity alive for another month or quarter, but the fractures are now gathering everywhere because the credit rampage has been too extreme and hideous. Maybe Zhejiang Xingrun Real Estate which went belly up last week is the final catalyst, but if not there are thousands more to come. Like Mao’s gun barrel, the printing press has a “sell by” date, too
Increased violence lurks just behind the façade of China’s success. As China’s financial situation grows more perilous, the central government will surely begin a process of blaming individual citizens – investors, industrialists and speculators – for the deteriorating economic environment.
In fact, from various reports, we can see this has already begun. If one believes that China is going to stabilize itself, one must also believe that the Chinese government is going to be able to turn the many millions that comprise China’s newly formed middle classes into “consumers.”
The idea, then, is that these Chinese should begin to mimic US consumer society. Yet surely some of these Chinese are related to individuals who only 60 years ago were being imprisoned for revealing Western influences in their thoughts or clothing.
Conclusion: No doubt, the pro-China propaganda of the past 20 years has enmeshed numerous Westerners in Chinese society and its economy. If you are one of them, you ought to be having second thoughts. If you can’t extricate yourself, at least try to reduce your exposure. And if you have none, keep it that way.