Zarathustra: [Chinese] over-investment over the past many years, and particularly in the years after the financial crisis, has created massive over-capacity across the economy that no one is really able to quantify. We have already got over-building in the real estate sector which resulted in massive number of empty apartments and empty shopping malls…. We are also aware of the over-capacity and inventory build-up in various sectors like coal and steel….. steel industry profits have fallen by 96.7% in the first four months of the year compared to the same period a year ago….. actual CPI figures are already in negative territory on a month-on-month basis. In short, deflation is already here for China….
via China in deflation, and how to reflate it at all costs.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.