China slowing

Found this little news snippet on China's January numbers:

With imports down way more than exports, China Posted a Record Trade Surplus of $60 billion, in this case, not a sign of strength.

Year-Over-Year Data Points

• Imports plunged 19.9% year-over-year vs. economist expectations of a 3.2% drop.
• Exports fell 3.3% vs. economist expectations of 5.9% gain.
• Crude oil imports fell 41.8%
• Iron ore imports fell 50.3%
• Coal imports fell 61.8%

Read more at http://globaleconomicanalysis.blogspot.com/#GVbfyMXmPZZxODi6.99

 

 

As you all know, I've said that China was slowing, based on shipping rate info (a leading indicator), and the known drop in crude and iron prices.  This says the rest of the world is slowing too, as nobody is buying (even the US, with our strong dollar).

We are knocking on the door of deflation.  If the bottom falls out of crude, and the Greek situation worsens, we could find ourselves in a deflationary dip.  A spiral down that path is a dangerous one for a heavily indebted world (and for indebted individuals).  We haven't had deflation since the 30's, and we've said we'll never permit THAT again, which is why we have so much debt -- lenders who should be worried, aren't.

Financial returns and growth have far outweighted labor gains and productivity gains for many years.  That's probably about to change...either wages go up, and the "real" GDP gains, or financing comes down.  Or both......