{"id":14553,"date":"2015-11-19T07:57:06","date_gmt":"2015-11-19T12:57:06","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14553"},"modified":"2015-11-19T07:57:06","modified_gmt":"2015-11-19T12:57:06","slug":"the-great-fall-of-china-started-at-least-4-years-ago","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14553","title":{"rendered":"The Great Fall Of China Started At Least 4 Years Ago"},"content":{"rendered":"

The Great Fall Of China Started At Least 4 Years Ago<\/a><\/h3>\n

Looking through a bunch of numbers and graphs dealing with China recently, it occurred to us that perhaps we, and most others with us, may need to recalibrate our focus on what to emphasize amongst everything we read and hear, if we\u2019re looking to interpret what\u2019s happening in and with the country\u2019s economy.<\/p>\n

It was only fair -perhaps even inevitable- that oil would be the first major commodity to dive off a cliff, because oil drives the entire global economy, both as a source of fuel -energy- and as raw material. Oil makes the world go round.<\/p>\n

But still, the price of oil was merely a lagging indicator of underlying trends and events. Oil prices didn\u2018t start their plunge until sometime in 2014. On June 19, 2014, Brent was $115. Less than seven months later, on January 9, it was $50.<\/p>\n

Severe as that was, China\u2019s troubles started much earlier. Which lends credence to the idea that it was those troubles that brought down the price of oil in the first place, and people were slow to catch up. And it\u2019s only now other commodities are plummeting that they, albeit very reluctantly, start to see a shimmer of \u2018the light\u2019.<\/p>\n

Here are Brent oil prices (WTI follows the trend closely):<\/p>\n

\"\"<\/center>They happen to coincide quite strongly with the fall in Chinese imports, which perhaps makes it tempting to correlate the two one-on-one:<\/p>\n

\"\"<\/center>But this correlation doesn\u2019t hold up. And that we can see when we look at a number everyone seems to largely overlook, at their own peril, producer prices:<\/p>\n

\"\"<\/center>About which Bloomberg had this to say:<\/p>\n

China Deflation Pressures Persist As Producer Prices Fall 44th Month<\/a><\/p>\n

China\u2019s consumer inflation waned in October while factory-gate deflation extended a record streak of negative readings [..]\u00a0The producer-price index fell 5.9%, its 44th straight monthly decline.<\/b>\u00a0[..] Overseas shipments dropped 6.9% in October in dollar terms while\u00a0weaker demand<\/b>\u00a0for coal, iron and other commodities\u00a0from declining heavy industries helped push imports down 18.8%<\/b>, leaving a record trade surplus of $61.6 billion.<\/i><\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The Great Fall Of China Started At Least 4 Years Ago Looking through a bunch of numbers and graphs dealing with China recently, it occurred to us that perhaps we, and most others with us, may need to recalibrate our focus on what to emphasize amongst everything we read and hear, if we\u2019re looking to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2674,1661,130,147,1851,175,195,202,481,1775,3500,7738,1085,10105,10655],"class_list":["post-14553","post","type-post","status-publish","format-standard","hentry","category-economics","tag-automatic-earth","tag-bad-loans","tag-china","tag-coal","tag-commodity-price-collapse","tag-credit","tag-debt","tag-deflation","tag-leverage","tag-oil-price-collapse","tag-overcapacity","tag-raul-meijer","tag-sdr","tag-steel","tag-xi"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14553","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14553"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14553\/revisions"}],"predecessor-version":[{"id":14554,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14553\/revisions\/14554"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14553"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14553"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14553"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}