Yesterday evening, the latest monthly manufacturing data came out from China, and even with their blatant fakery, China wasn’t able to conjure up anything except for a 14th consecutive month of contraction (image from ZeroHedge):
What’s revolting to me, as a devotee of free press and free speech, is how the Communist government of China is trying to muzzle the brave souls in China that are trying to hint at what a complete and total fraud the entire Chinese economy really is. The longer they try to keep a lid on the truth, the more explosive it’s going to be when it finally comes out, one way or another. (And I’m not even getting into the fact that a “Communist” government rules over a nation with the second highest quantity of billionaires on the entire planet; what a joke.)
As I was walking my dogs on the Google campus in the dark hours of the early morning, I was thinking about how the nearly $35 trillion yuan of “stimulus” China has provided is completely sputtering out in terms of efficacy. I thus would offer a metaphor………..
Imagine the economy of the United States back in 1982 as being equivalent to a red-blooded sixteen year old boy. For a while, things had been in a state of awkward development, with some stumbling, but the potential is all there. If you think about the state of the nation in 1982, and what was about to transpire over the next several decades, you can think of the staggering, exciting prospects that lay ahead. The U.S. was totally DTF, as it were.
A sixteen year old boy (again, the U.S. in 1982) requires very little “stimulus” to get going. Show him a bare shoulder, and he’s ready to rumble. Hell, you could show him a photograph of a woman’s shoulder, and he’s got all the “stimulus” he requires. You get the point.
Now imagine the United States (or China, for that matter) in 2016. It isn’t a ready-to-surge 
adolescent anymore. It’s more like a half-blind 92 year old dude. You can “stimulate” him all you want, and, umm, not much is going to happen. He’s long past the point of a bare shoulder getting him motivated. In fact, he’d rather just take a good, long nap. You can keep your stimulus to yourself, thank you very much.
Thus, the trillions – – – an unfathomably large figure, but one to which we’ve all become accustomed – – of dollars (or yuan) of stimulus being vomited at the market is becoming pointless. The 92 year old man is past stimulation, and so is the (totally fake) economy of China. Thus, month after month after month, you’re going to get lame-ass results like the one shown above, and again, the actual truth is probably devastatingly worse than what’s being offered., but the poor citizens of China aren’t permitted to offer the truth. (Can you imagine how depressingly milquetoast Slope would be if it had the misfortune of being based in the Middle Kingdom?).
So keep this image in mind when you’re witnessing economic reports tumble out that seem surprisingly flaccid based on the amount of support central bankers are giving them. Pushing on a string. Nailing Jello to a tree. Use whatever metaphor you like. It ain’t workin’ anymore.
