Mish often points out that state sales taxes are flat to down year over year, even though rates are up, revealing that the recovery is all smoke and mirrors. Zerohedge has been reporting the federal income tax withholding data, which tells much the same story. Basically, if the economy were really improving, people would be earning more, spending more, and paying more taxes. Government spending is not economic growth — if it were that easy, the USSR would still be around.
Here’s the latest withholding data from zerohedge:
Well, the braindeads will claim that China is hugely successful with socialism & centrally planned economy. Rumor has it that they are launching 4T RMB stimulus in August:
With all this madness, RMB is supposed to rise against all other currencies according to the braindeads. But this market is braindead anyways… it’s the braindeads’ market. China is indeed as Chanos put it “on a treadmill to hell”. They are just about to put an overdrive on that treadmill.
The recent story if you’ve read it are those of housemaids quitting jobs to buy properties. Remember the story of a shoeshine boy giving stock tips to Joe Kennedy in 1929?
But there might be significant differences w/ China. My Asian relative abroad owns an electrical appliance factory. He used to import semiconductors (transistors) from China. But recently, the leadtimes have become significantly longer & prices rose around 10%. Factory workers are quitting to get into construction jobs as they get paid more. So, there are a lot of inflation elements in Chinese economy. Will this bring implications to RMB? Opposed to what is now popularly believed? Those are very interesting questions I hope we will reveal the answer soon enough.
BTW, great call on gold, Mike! I’m enjoying the rally, albeit just a small position.
I guess it behaves like it should (rising as there’s a threat to global default – as Mish once explained)… not as just another leveraged entity. Despite this, I still think it should go down big time at some point in near future. Perhaps in USD’s Intermediate (3)?