Apparently the world is ending because the mining boom is slowing down according to a group of economists who I also believe have been predicting the same thing since 2000. And whilst, economists predict the end of the world politicians tell us that its all beer and skittles. Not certain who I would distrust less a politician or an economist or maybe a politician who is also an economist. I definitely would not trust a politician that was also a lawyer…apparently thats all of them. Well we are screwed then.
However, there is one thing that never lies as opposed to the Chinese government and their data and that is what the market is saying.
This is a chart of the Shanghai composite index.
As you can see it peaked in 2007 and has either been falling or congesting since then. This is definitely not the chart of an economy going gang busters – this is the chart of an economy that lacks confidence and knows something that everyone else either doesn’t know or is afraid to tell.
I don’t think anything keeps politicians awake at night other than dreaming about how they will spend the inordinate largesse that is heaped upon them in retirement or what they will do with the $1,000,000.00 they will get in board fees from people they have sucked up whilst in government. But if anything does keep them awake it should be the chart above.