China’s Recovery is Not Happening: Here’s Why
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We made it perfectly clear here on the program. Again, conventional wisdom. What is conventional wisdom? Conventional wisdom is what, in essence, what everybody knows that everybody knows. If that makes sense, you wanna get your arms around that conventional wisdom. Everyone knows to be true, right? Well, we’ve always defied conventional wisdom and we’ve always been spot on.
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and conventional wisdom is China’s this big dragon, this major power. Oh my God, the hawks are getting there. We gotta spend even more money on the military. We gotta spend more money on the military because we are not ready for China and China has this weapon and that weapon. China is a declining power, a declining power. Let me give you an example. And again, this is another see I told you so moment.
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People’s Bank of China, has capitulated to reality and they have cut their short-term lending rates. More cuts to longer-term rates are likely in the coming days. Highly leveraged households and companies will continue to weigh on the nation’s post-COVID recovery. Their post-COVID recovery is garbage. It’s awful. Lending slowed sharply in May.
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Growth in economy-wide credit outstanding dipped to 9.8% year over year. Reverse is nearly all of the pickups since December, when they got rid of their zero COVID restraints. Today’s rate cut, the central bank will now offer seven-day money market funding at 1.9% rather than two. But again, they continue to go down. And again, they’re trying to prop up their economy by an essence.
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I mean, you take a look at what we’re told. Oh my God, China’s gonna be rip Warren coming out of this zero COVID policy. They’re gonna be ripping right along.
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The facts on the ground in China, and again, I’ve talked about this, you’re going to watch on CNBC and these programs, we’re going to do some backdrop of Shanghai, oh, hustling bustling, all this nonsense. 20%, 20% youth unemployment, and these are college grads, with college grads. I’m not talking out in the countryside where, you know, more than a half a billion people live on a couple bucks a day, if that. This is a country that is in…
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It’s a reality of the situation. We talked about they’re not that competitive anymore when it comes to manufacturing. Vietnam is cheaper. Cheaper to do business in Vietnam than it is to do business in China. It’s the same amount to manufacture in Mexico as it is in China. Now what? I mean, they’ve got more debt than they know what to do with.
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public works projects that are absolute garbage, a real estate issue, a myriad of things. Now again, does that mean that we should not pay attention to China? No, the scary aspect of China right now is the fact that the goal of the Communist Party is to stay in power. And that’s where you gotta be on your toes in regards to gee, what are they going to do to try to stay in power, to rally?
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to their cause, whatever it may be, invade Taiwan, whatever. But if you take a look at that situation, that’s for them, cutting their nose off to spite their face. You don’t think that they see what’s going on with Russia, what happened to Russia after the invasion of Ukraine. What if, what if companies said, screw this, screw this, I’m out. I’m leaving, I’m outta here. We’re not gonna do this anymore.
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They’re done. I don’t mind everybody. Wasn’t that long ago, media was telling us that, oh boy, China’s gonna look gonna be an alternative reserve currency. They’re gonna try. It’s gonna be an alternative reserve currency out there. And again, China’s doing some smart things when it comes to investing around the globe and trying to get deals going and moving and grooving. That’d do something. Cause the reality of the train, what’s happening there on the ground, it’s not good. Watchdogonwallstreets.com.
