Ambrose Evans-Pritchard @ the Telegraph
Last Updated: 11:34AM GMT 02 Mar 2009
As ordinary citizens with no power over the levers of policy, we watch from the sidelines, and weep. The whole global economy has tipped into a downward spiral. Trade and output are contracting at rates that outstrip the leisurely depression of the 1930s. Debt deflation has simply washed over the drastic measures taken by governments everywhere.
Judging by the latest Merrill Lynch survey of fund managers, investors have a touching faith that China is going to rescue us all and re-ignite the commodity boom. How can this be? Taiwan’s exports to China fell 55pc in January, Japan’s fell 45pc. These exports are links in the supply chain for China’s industry. Manufacturing output in the Shanghai region fell 12pc in January.
My favourite China guru, Michael Pettis from Beijing University, is in despair – as you can see on his blog (http://mpettis.com) . The property bubble is bursting. Developers have built more offices in Beijing since 2006 than the entire stock in Manhattan. There is a 14-year supply glut. We have seen this movie before. Link to full alarming article
