-- Posted Wednesday, 17 October 2012 | | Disqus
By Graham Summers
While the media world is abuzz with last night’s Presidential debate, I’d like to cut through the noise and present you with two truly staggering facts that need to be kept in mind as the backdrop for the US Presidential Election.
Fact #1: EU leaders have stated point blank that they were asked to keep things quiet until after the election.
Regardless of your party affiliation, social views or the like, we have to ask ourselves “what was promised in return?”
If you’ve been reading me for some time, you know by now that the EU is in massive trouble. Spain is currently drawing over €400 billion from the ECB.
Let’s put this number in perspective… in June before Spain requested a €100 billion bailout, the country was drawing only €300 billion from the ECB.
Since that time and now, the ECB has promised to provide unlimited bond buying… and even Germany has indicated it would be open to some sort of a Spanish bailout…
And yet, Spain is now borrowing even MORE than it was in June.
This is not progress in any way… if anything it indicates that things are worsening in the EU’s financial system at a staggering pace. The powers that be are keeping things calm until after the election… at which time there will be absolute hell to pay.
And we Americans are going to be on the hook in one form or another. Something was promised in exchange for the EU keeping things quiet. And we won’t find out what it is until after November 6
Fact #2: China is facing a severe downturn if not outright collapse.
As I’ve stated many times before, the China economic “miracle” is in fact one colossal Government funded fraud. While the media attempts to spin China as still growing, executives over there have stated that in fact things are far worse than is publicly known.
Many economists expect the Chinese government to announce Thursday that economic growth in the third quarter was barely short of the official target of 7.5 percent. But Chinese business executives said that the reality was worse for many companies selling in the domestic market, leaving considerable room for a rebound.
“All industries are going down, but why aren’t the official statistics going down?” asked Bob Wang, the sales manager of Kralle Tools, a manufacturer in Wenzhou, an eastern city, that makes circular saw blades for lumber mills.
He said he believed that government officials had been underestimating the extent of China’s slowdown to avoid losing face.
http://www.nytimes.com/2012/10/16/business/global/at-trade-fair-chinese-exporters-a-bit-more-optimistic.html?pagewanted=2&_r=2
So… expect the news out of China to get worse and worse once the election is over. How would the world react to news that the “miracle” which supposedly pulled the globe out of recession is in fact collapsing?
Not well.
Europe and China combined account for 34% of the world’s GDP. Throw in the US which has re-entered a recession and 55% of the globe’s GDP is in contraction.
And everyone is waiting on November 6 to see how this will pan out.
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Best Regards,
Graham Summers
-- Posted Wednesday, 17 October 2012 | Digg This Article
| Source: GoldSeek.com
