If the various stimulus programs around the world were actually doing anything worthwhile, we wouldn’t see this:
China will announce in August a new stimulus package of possibly 4 trillion yuan ($586 billion), the China Business newspaper reported on its Web site, citing unidentified sources.
The plan, from China’s National Development and Reform Commission, will likely cover nine industries including information technology and new energy, the report said.
Mish points out that all the stimulus here and around the world has done is push up stock and commodity prices – and this, in turn, has fueled housing bubbles in places like Australia and Canada where a lot of commodities originate.
There has been no expansion of the wealth-creating part of the economy – no jobs, no rise in wages, nothing of any long term value. And, meanwhile, its all really being fueled by massive amounts of new debt being placed on economies which will increasingly struggle with aging and declining populations – ie, populations which will be less able or inclined to pay off debt.
China’s economy has allegedly been on a tear – just roaring ahead. But if it were, then China wouldn’t be contemplating another massive stimulus. Remember, $586 billion for China would be akin to Obama announcing that he’s going for another trillion dollar stimulus for us, given the size of our economy compared to China’s.
Today, tomorrow, next month, next year – it will happen. The crash is coming.
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