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God, it must have been a couple of years ago now. I saw this program about commercial fishing and the falling world-wide fish harvest. It was a mystery, why was everyone's harvest decreasing, except for China's? The secret was in their quota system, everyone working under the pressure of meeting their quota, whether the quota was there or not. "Yeah man, it's two tons of fish," wink, wink. If it's not two tons, you don't get your paycheck and the guy counting knows that, because if he doesn't meet his quota, he won't get paid either. Sure, maybe it's just a fishing thing, but still, it is significant. Most of us can remember the poison pet food scandal, where Chinese dairy farmers watered down the milk adding the industrial chemical melamine, to fudge the nitrogen number in the purity test.
Perhaps it's the implementation of Capitalism, inside the Chinese system. The Capitalist Square peg being driven into a round hole of an authoritarian manufacturing state. The rumbles began a few months back, when a purchasing manager's report showed slowing growth. But Beijing announced today its overseas shipments fell 6.6% from a year ago. There is an interesting reason is why the number was revised; Beijing attributed it to, "distortions from inflated data in early 2013." What? Paging Bernie Madoff! Paging Bernie Madoff, you have a phone call on the white courtesy phone.
The economic numbers were cooked? The fish catch numbers were cooked? The milk purity was cooked? And this is the second largest economy in the world and how they roll? Beijing reported imports had dropped 11.3 percent, so what do we really know? We know Beijing says imports dropped by 11.3 percent. Maybe its 12 or 15 percent or 50 percent, who knows what revisions the future holds? Winston Smith is still hard at work doctoring the numbers.
Meanwhile, back in Washington, stocks fell accordingly at this potential, last call for alcohol at the China party. "Economic momentum may have stalled temporarily in March," said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. Stalled, that's such a funny word, in aviation the word stalled, usually comes right before the word crashed. The aircraft stalled and then it crashed. Imports into China fell 11.3 percent, meaning a slowing economy. For more than a decade the Chinese economy has grown by 10 percent a year. It's a boom town, growing exponentially, getting while the getting is good.
A squeezing of the world economy to obtain more capital, investing in the boom, before it goes bust, before it's too late, as the clock ticks away. We've allowed ourselves through Free Trade to wed our economies to people we hardly know. Trusting all will be well, in an economy based on speculation and unrestrained capitalism, under the quota system. A redux of the 2008 home Mortgage lending crisis, with through the looking-glass lending, only on a grander and world-wide scale. China is the manufacturing engine for the entire planet. A wonderful idea, wasn't it, putting all our eggs in one basket? Sure, its rough for a few hundred million Americans, but there are billions to be made in speculation!