Michael Pento: China Can’t Stop What’s Coming To The Global Economy

Tuesday, March 26, 2019
By Paul Martin

March 26, 2019

During the 2008 financial crisis, China stepped-up to help “fix” the global economy. This time around, China is in no shape to carry the load. Here’s why…

by John Rubino of Dollar Collapse

As this longest-ever expansion finally runs out of steam, the question on everyone’s mind is, “who will save us this time?”

The last big crisis was “fixed” by a combination of lower interest rates globally and massive buying of commodities by China. But with interest rates still at cyclical lows in a big part of the world (and nearly $10 trillion of bonds sporting negative yields), central banks have limited ammo. And according to Michael Pento of Pento Portfolio Strategies, China is in no shape to carry the load alone:

China Can’t Save the Global Economy Again

China has acted as part of the life support system for the global economy during the past two decades. The other part being comprised of central banks. When the Tech Bubble burst back in 2000, China began printing and borrowing an incredible amount of money to create demand for fixed assets. After the Great Recession struck in 2008, Beijing again reacted with a massive government stimulus package that helped further inflate its real estate bubble and placed a pervasive bid under global markets. It was much the same in the wake of the global slowdown and earnings recession in the U.S. in 2016. In fact, China has been a humongous tailwind for growth since 2000; taking on about $38 trillion in new debt, which amounted to an incredible 150-percentage point increase in its debt to GDP ratio.Michael Pento: China Can’t Stop What’s Coming To The Global Economy.

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