China Is Facing A Deflationary Debt Spiral

Ambrose Evans-Pritchard, The Telegraph: Bank of America warns of 'lethal' damage to China's financial system as deflation deepens

'Deflation, Devaluation, and Default' loom in China this year. The denouement for Shanghai's bourse will not be pretty, says the US bank.

WNU Editor: Ambrose Evans-Pritchard has been predicting tough times for China in the past few years .... but it looks like for this year he may be right. I have not been back to China for the past two years .... but my Chinese friends who live there are all telling me the same thing .... the boom years are coming to an end. The smart money has bailed out of the Chinese markets, and employment prospects with better wages are coming to an end. Does this mean the end of China's economic boom .... probably not .... but it is not going to be the double digit growth that they have gotten use to for the past decade. And as for having access to easy credit .... that is definitely coming to an end .... albeit reluctantly.

China's Economy Is Now The World's Largest

Previous Post: IMF: China Now Has The World's Largest Economy. America Is Number 2

WNU Editor: Here is a good read .... The Chinese Century -- Joseph E. Stiglitz, Vanity Fair

IMF: China Now Has The World's Largest Economy. America Is Number 2

A Bank of China branch under construction early this year in Guangzhou, Guangdong Province.

It’s Official: America Is Now No. 2 -- Market Watch

Hang on to your hats, America.

And throw away that big, fat styrofoam finger while you’re about it.

There’s no easy way to say this, so I’ll just say it: We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.

It just happened — and almost nobody noticed.

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

As recently as 2000, we produced nearly three times as much as the Chinese.

Read more ....

My Comment: This news is HUGE!!!!! But for the moment .... everyone in the main stream media is ignoring this news story from the IMF .... everyone.