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Chemicals and the Economy

Deflation gets closer in Europe, USA and China

Demographics drives demand.  If it doesn’t, then its hard to think what does.  So forecasting economic growth depends on two key variables: If you have lots of young people in your adult population, then you should have fast growth If you have lots of older people, then you will be lucky to have any growth […]

China auto sales could drop if lending squeeze continues

Imagine for a moment that you had become president or premier of China following the leadership transition in March.  You know that the country’s economic model has to change.  But you also know that you have to carefully develop your powerbase, whilst also putting in place new policies. Probably you would take things cautiously at […]

The trend is your friend, until it isn’t

Investing in today’s financial markets is relatively easy.  You simply have to believe that governments in the US, Japan and Europe will continue to provide plenty of free cash to investors as part of their Recovery Scenario of a quick return to ‘normal growth’.  It doesn’t matter whether the investor believes in the Scenario, the driver is simply the fear of […]

A little bit of China stimulus goes a long way in housing

It was only a “mini-stimulus” that was delivered by China’s new leaders in July.  Well, thank goodness it wasn’t more, to judge by the above chart from Albert Edwards at SocGen.  It shows how house price inflation has jumped in 69 of China’s 70 main cities between March and September: In March (orange column) inflation […]

China’s auto sales rise as bank lending booms

Autos are now the largest single manufacturing industry in the world.  Not only do they directly and indirectly employ vast numbers of people, but they are also increasingly key to consumer spending.  Thus it is no surprise that governments have tried to increase auto sales since the Crisis began in 2008. China is the prime example of […]

China lending remains out of control ahead of November’s plenum

The blog’s views on the unsustainability of China’s epic economic growth since 2009 have now become truly mainstream.  Everyone now agrees, including the new leadership, that it was created by a credit bubble.  State-owned China Daily has even now warned that a commercial property bubble potentially now exists alongside the residential bubble and the infrastructure ‘white elephants’, adding: “Once […]

Financial markets worry as Fed talks of ending stimulus

After 5 years of government stimulus, policymakers are having to think about their exit plans.  US Federal Reserve chairman Ben Bernanke retires in January, and most of the blog’s clients in the financial community believe that he intends to start the process before he leaves, perhaps as early as next month. This is likely to prove very scary […]

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