China's exports in record decline - BBC

[Filuwaúrdjan]

http://news.bbc.co.uk/2/hi/business/7825573.stm

[Psychic Octopus]

Predictions by the World Bank of growth of 7.5% in 2009, if proved true, would be the lowest recorded since 1990.

This is bad for China. With those numbers, and they are dropping sharply, massive unemployment in China will ensue do top layoffs by factories

The Chinese Government has warned that the country is facing a massive problem with unemployment.

Social Security Minister Yin Weimin described the unemployment situation as "critical" and said that the impact of the world economic crisis is still unfolding there.

The hardest hit area was the coastal manufacturing strip in the south-east where textile and light industry companies are going under.

Mr Yin said the Government would provide financial aid to some manufacturing companies to try and reduce the problem.

Officially China's unemployment rate is 4 percent but it is thought to be a large underestimation because it does not account for 100's of millions of rural workers

[Sam Spade]

drip, drip, drip towards the end game...

[Tender Branson]

7.5% for China's GDP is very optimistic in my opinion, I think it will be more like 5-7% ...

On a side note:

In November, US exports decreased by 6% compared with 1 month earlier and by 2% compared with a year earlier.

Imports decreased by 12% compared with October and by 11% compared with November 2007.

The trade deficit in November slumped to 40 Bio. $ from 57 Bio. $ in October and 60 Bio. $ in November 2007.

Seems like the collapse of the oil-price is showing it's first impact. December numbers will be even worse ...

http://www.census.gov/foreign-trade/Press-Release/current_press_release/exh1.pdf

[Sam Spade]

7.5% for China's GDP is very optimistic in my opinion, I think it will be more like 5-7% ...

You can't trust China GDP numbers one bit.  They lie, a lot.

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In the modern era (say post-1970 or so), the US trade deficit has always declined during recessionary times.  Not terribly surprising.

[opebo]

drip, drip, drip towards the end game...

You mean that whatever happens, that's what you can claim was the 'end game' to which you refer?  How about elucidating, you lazy SS.

[Sam Spade]

drip, drip, drip towards the end game...

You mean that whatever happens, that's what you can claim was the 'end game' to which you refer?  How about elucidating, you lazy SS.

Present government actions make the "end game" rather clear in my mind.  I've already posted it before.

Secondary stock market collapse combined with a bond market collapse (i.e. dislocation), which leads to... mass bankruptcies, curtailment of government's ability to deficit spend, currency devaluation.  Go read any history of the year 1931 in terms of economics.

Your solution of monetizing the debt will have no effect on this event unless you spread around trillions and trillions of dollars (probably somewhere around our present GDP - since that is probably the amount of debt which will need to be defaulted) among the population AND they actually spend it.  Of course, your debt holders would immediately redeem your debt as you try to do this, you would be unable to sell any more debt to them and your currency would become worthless as you attempt to do this (before you ever actually succeed, mind you).  In general, you would get a hyperinflationary depression, which is much worse than a deflationary depression because governments rarely survive those events.  If you want a Hitler, that's the best way to do it.

TPTB (namely financial folks) much prefer option 1 to option 2.  Especially since they've gotten trillions of dollars out of the Feds (they got money out of the Feds in the GD too before 1931).

Of course, maybe I'm wrong and just playing Chicken Little part in this movie.  I hope so.  But I'm not betting on it.

[2952-0-0]

One of my uncles manages a small hydroelectric power station, and he says that power demand is down 30% or so from last year. Given that the economy is hugely manufacturing based, this is very serious. This is insider information which they don't want you to know.

[opebo]

Your solution of monetizing the debt will have no effect on this event unless you spread around trillions and trillions of dollars (probably somewhere around our present GDP - since that is probably the amount of debt which will need to be defaulted) among the population AND they actually spend it.  Of course, your debt holders would immediately redeem your debt as you try to do this, you would be unable to sell any more debt to them and your currency would become worthless as you attempt to do this (before you ever actually succeed, mind you). 

'Spending' many multiples of the private economy was what got us out of the first depression (WWII spending).  How could 'our debtholders' 'redeem our debt'?  They get paid back in dollars, which we print.  There's nothing they can do about this, except of course as you point out, not buy more debt.  But they can't 'redeem' what they've already got. 

Anyway, even if they don't 'buy' newly issued debt, its no problem as we take away their savings by printing money.  And finally of course in a depression deflationary environment, one has leeway to print some very large percentage of the private economy before any actual inflation would occur, for the obvious reason that there is immense 'slack' - a huge percentage of productive resources are lying idle, and ordering them to be put to use (by means of printing money) will cause no inflation until they're 'at capacity'.