The phrasing that rendered the entire article worthless was when he announced that ghost cities would be negative GDP according to GAAP.
GAAP is a set of procedures to evaluate companies. There are zero procedures in it to evaluate countries and certainly not the GDP of countries. GDP bears no resemblance whatsoever to earnings.
And as I said that’s silliness rendered the whole thing useless.
“GAAP is a set of procedures to evaluate companies.”
GAAP governs all accounting wherever accounting is used.
“GAAP stands for Generally Accepted Accounting Principles, which are a set of rules and standards used in the United States for preparing and reporting financial statements. These principles ensure consistency, accuracy, and transparency in financial reporting across various industries.”
“And as I said that’s silliness rendered the whole thing useless.”
You don’t know what you are talking about. And I personallly would keep my mouth shut around James Rickards when he is talking about things having to do with his skill sets.
The author may be unclear in his reasoning about GAAP but he is not wrong. Economists have developed accounting principles for determining GDP and national wealth. These in turn rely on GAAP and Government GAAP accounting. A proper assessment of China’s economy would thereby rely on GAAP to write down the value of China’s “ghost cities” and related infrastructure, making major subtractions from China’s putative balance sheets for both private and public entities.
As noted above, about 45% of Chinese GDP comes from investment. However, much of that investment is wasted on ghost cities, white elephants and lavish projects that can never hope to provide any return on investment. If this wasteful investment were written off (as would be required under GAAP), Chinese growth would be cut from 4.8% to about 2.5%. Taking into account other manipulations and Goodhart’s Law, it’s entirely possible that China’s GDP growth is negative today. That outcome is not widely understood and would come as a shock to the panda-huggers on Wall Street.
You are misrepresenting how GAAP was being referenced in his assessment that you cavalierly poo-pooed. It was not referenced for the nation of China itself, but rather by their investments in Ghost Cities, white elephants and lavish projects that can never hope to provide any return on investment that China & others include in their GDP growth numbers when talking about China's economy.
Do you still want to stand by your statement that this article is worthless?
Sorry, but I respect Jim Rickards assessment as correctly assessing China's real finincial health, and that the real danger is the financial health of this world in totality. It is all creashing down around us, and the evidence is quite obvious to those who see the seams spliting under the pressure gross mismanagement that has been taking place for several decades has finally brought to the entire world.
This reality is the direct result of useless wars that have destroyed efficietcy & production, in my opinion.