China has been pushing the Asian Infrastructure Investment Bank, a modest 50 billion dollar joint venture that was launched by China. This will be the rival to the World Bank, a financial institution that has long been the servant of the G-7 members of the developed countries. President Obama has been ranting against the various allies from wanting to join this new Chinese venture and accommodate China against the US interests. So far we have seen Australia, the UK, New Zealand, Singapore, India agree to negotiations to joining AIIB. France, Italy, and Germany has already agreed to join this new financial institution. This represents a shift away from the Washing DC – New York City based world financial institutions that have served America’s political interests. Obama frowns very greatly on the perceived disloyalty of our allies, whom he feels should march locked in step to his tune. I can see why they insist on not marching since his tune is somewhat off key and has no sense of rhythm.
Yes, China is being accommodated in its goal to rise to the top of the world as the acknowledged number one power, a feeling it has not had since the sixteenth century when it was isolated from the western world. It has already been hailed as the number one GDP, surpassing the US, and now it wants to be the world’s reserve currency as well. They might well consider the problems associated with that achievement. For a country that wants to keep its currency pegs as low as it can against the US dollar this is a strange way to behave. Of course 2015 will be remembered as the year of so many shoes dropping and that is the final irony for all the brouhaha invoked by Obama, the Stupid. He still thinks the US GDP will grow at four percent this year, how can all his PhD economists be wrong? Because they don’t understand that credit spends like money and like your paycheck, once spent, the money is gone.
So many economists of the greatest stripe have said that the Chinese economy will grow at 7 percent this year. Then why have they greatly reduced their buying of raw materials, so much so, that Australia and Brazil are hurting so greatly economically. The recessions are there right now in those countries. The housing boom in australia is bursting and unemployment is rising. Energy consumption has been greatly reduced in China according to the few economic China watches who can be trusted to actually verify their facts and figures. Hardly an indication of good times ahead. Banks are starting to default, the real estate boom in China is bursting, no new building of any importance is occurring in China, and capital flows out of China are accelerating. Does this sound like 7 percent GDP growth to you? he GDP for France is expected to be flat this year and for Germany, that Iron Boot on the throat of Greece, will barely rise towards one half of one percent. The UK will head right back into recession as the London real estate boom goes bust, it has always depended on the next bigger sucker. And if they leave the EU they might suffer a great depression if they continue to make the same blunders the conservatives and labor governments were and still are making. By any real measure, Europe is done for as a monetary union. The over leveraged private and public banking systems are close to collapse. When a one percent loss in non performing loans puts you into insolvency you have a real problem. Look at Canada, who was regarded as the shining paragon of a well run economy. Oil prices continue downwards, making its expensive tar sands and shale oil and gas operations uneconomical. Already unemployment is rising, the housing market is going bust, and now manufacturing and retail is heading south. Japan exists only on another planet, Abe simply doesn’t know which one yet. Its GDP will, most likely be flat line as well. As for China, there is every indication that GDP will be very low, perhaps barely above one percent. Russia is busy burning up its GDP playing silly war games. It has little growth left with oil prices being what they are and it takes a lot of money to move troops and bombers and navel ships around, not to mention all the money it shots out the mouth of the cannons it keeps giving the Ukraine rebels. And it must subsidize the Crimea, which was always a basket case for the Ukraine to support, even in the old days of the USSR. The Crimea is best liken to West Virginia when it comes to economic comparisons.
Not that we folks, here at home, have all that much to look forward to this year. Yes, our fearless fool of a leaser has spoken of the lowering of unemployment on his watch. We are employing more bartenders and waiters now than we have in the last twenty years. All those low paying short work week jobs kinds makes one proud to be middle class, those of us who still are. Just wait, our turn is coming. Besides, now that there are no more extended unemployment benefits the unemployment rate has dropped dramatically. How’s that for presidential action. Subprime housing mortgages are at new peaks and starting to bust again as are subprime automobile loans, which have burst and we will be able to buy a newly repossed new car. Our unemployment numbers would be higher but the BS refuses to count all the oil patch workers who were laid off. But the last shoe to drop will be a good one. Inflation for the little people, that’s you and me, has been rising since 2000 even if the Fed and other government institutions say not. I used to be able to buy porterhouse steaks for just under four dollars a pound then, now that price in the grocery stores is about $14 or $15 a pound. Almost all food prices have gone up and quickly. The price of frozen vegetables, the really good kind have almost doubled in the past five years. I guess the FED may have to raise interest rates a quarter point or so. And when they the whole world will collapse. I find it funny that after all these interest rate drops to the point of negative interest, and now the whole world is doing the Quantitative Easing boogie, with all that money that has gone into speculation, forced by the various central banks, Christine Lagarde of the IMF has finally noticed that the world financial condition really can’t stand another penny of debt and that if the FED does raise the rates, even by a little bit, Europe will start an immediate collapse. Boys and girls, Vito, the world loan shark, is waiting for his money and if he doesn’t get it, he is going to start breaking legs. Meanwhile Obama the Idiot, is worried about the new world financial order. What order? Let’s try the new world financial chaos. Don’t worry about parity among the world’s currencies, they’ll all be worthless. Yep, this is the year of thousands of dropping shoes. Yall sleep tight, hear?