Posted on 07/12/2012 10:16:28 AM PDT by blam
EU In Recession, US Entering Recession And China Is Lying About Its Growth
Economics / Recession 2012
Jul 12, 2012 - 10:11 AM
By: Graham Summers
The emerging markets, especially China, are showing signs of a major slowdown. Indeed, recent revelations have made it clear that Chinas slowdown is in fact much worse than expected:
Chinese Data Mask Depth of Slowdown, Executives Say
Record-setting mountains of excess coal have accumulated at the countrys biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said.
Electricity production and consumption have been considered a telltale sign of a wide variety of economic activity. They are widely viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the countrys economy, because the gathering and reporting of data in China is not considered as reliable as it is in many countries.
Indeed, officials in some cities and provinces are also overstating economic output, corporate revenue, corporate profits and tax receipts, the corporate executives and economists said. The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.
The executives and economists roughly estimated that the effect of the inaccurate statistics was to falsely inflate a variety of economic indicators by 1 or 2 percentage points. That may be enough to make very bad economic news look merely bad. The executives and economists requested anonymity for fear of jeopardizing their relationship with the Chinese authorities, on whom they depend for data and business deals.
http://www.nytimes.com/2012/06/2...
For those of us who have been skeptical of the China miracle, these revelations are nothing new. After all, Chinas infrastructure projects include ghost towns
http://www.time.com/time/photogallery/0,29307,1975397,00.html
http://www.youtube.com/watch?v=rPILhiTJv7E
as well as blowing up buildings just to build new ones in order to record growth
As one of the most architectural productive country, China aggregates 2 billion m2 of new building area every year, consuming about 40% of the worlds concrete and steel. However, on the flip side of the new building fever, there lie the rubbles and remains of other older buildings: people tear down four-star hotels to build five-star ones and bulldoze newly developed construction sites before they are even finished. Lots of young strong buildings are down, fulfilling their unnatural destiny in the roaring noise of blasting. (Source from ifeng.com and people.com.cn)
http://www.chinahush.com/2010/09/24/chinas-bizarre-phenomena-buildings-die-unnaturally/
Some analysis Ive read puts Chinas actual Debt to GDP north of 200% (the dodgy debt is hidden in State Owned Entities and remains off the official books.
The problem is by now everyone knows that Chinas data is suspect but no one seems to know just how suspect it is. And given that Europe is in a recession (confirmed) while the US economy is entering a recession again (not officially confirmed yet, but it is) in its weakest state in the post-WWII era, much of the world economic growth story is tied to China.
So if Chinas growth is slowing and potentially even recessionary where is the global growth engine going to come from?
The easy answer
nowhere.
Obama is raising hell with the White House staff right now: "Why the hell didn't you ignoramuses think of this!"
The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.
The Italians invented Double Bookkeeping.
The Greeks invented "tripple bookkeeping"
First set of books shows the true state of the business....
Second set of books to show spouse ...sans "funny money" for mistress
Third set of books for the tax inspector....
Que video of Hitler just finding this out.....
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