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zugzwang

Hit Like A Ton Of Brics

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West's economic saviours no longer able to shoulder the worldwide debt Ponzi.

http://uk.finance.ya...-152657777.html

The "BRICS" countries -- Brazil, Russia, India, China and South Africa -- and other emerging markets had for years been the stars of the world economy, helping pull it through the Great Recession.Their fast growth compensated for the developed world's stagnation and their currency reserves funded Western debt.

The thirst of emerging market consumers for goods helped tide over Western companies, while their low production costs drove global trade.

But that ground to a halt in 2013.

"We were expecting it for a while, but it's when it emerged," Jennifer Blanke, chief economist at the World Economic Forum, told AFP.

Economic growth dropped sharply in several major emerging markets in 2013.

Russia's growth fell from 3.4 percent in 2012 to 1.5 percent, according to International Monetary Fund data. South Africa's fell from 2.5 percent to 2.0, Mexico's from 3.6 percent to 1.2 and Thailand's from 6.5 percent to 3.1.

Chris Weafer, a partner at consulting firm Macro Advisory in Moscow, said that after becoming "complacent", investors had now woken up to the risks posed by emerging markets.

"It is a necessary change and long overdue," he said.

When China sneezes...

Most worrying of all is China.

Its growth rate fell just 0.1 point in 2013, to 7.6 percent. But that is down from 9.3 percent in 2011 and double-digit growth for much of the decade before.

"Investors had previously assumed China would continue to grow at an annualised eight to nine percent. That is impossible longer term," Weafer said.

Spanish bank BBVA (Amsterdam: BBV.AS - news) warned that "the possible correction in Chinese growth and that of other emerging economies is a risk factor" for the world economy.

"Many other countries and economies became dependent" on Chinese growth, said UBS (Xetra: UB0BL6 - news) in a note on investment prospects for 2014.

"Chinese investment growth fuelled commodity demand and supported many economies as far away as Brazil and Australia," said the bank, warning: "There is no 'China after China'.

"In other words, there will be no superpower growing in double-digit GDP terms now that China is slowing."

Edited by zugzwang

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West's economic saviours no longer able to shoulder the worldwide debt Ponzi.

I am SOOO pleased to see this antihype of EMs. Buy for multi month rally. Always baring in mind if doesn't pay off don't hold onto it, get rid with small loss. Reward:Risk ration vg.

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Nonsense, Keyensian and MMT theories say Governments just have to borrow....they can keep anything afloat forever...Just ask any Nobel Prize Winning Economist.

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Not quite sure why Russia is added in the BRICs.

It's basically a petro-state with nukes, and a terrible place to do business.

BRICs - Bloody Ridiculous Investment Concept

None of the countries have anything in common, other than the fact they had decent growth over a decade.

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China is causing it, not shouldering it

Very true. True of them all, really. They're all puffed up on residential and commercial property.

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At some point China is going to suffer a recession, quite how the central command will cope with that policy dilemma is anyone's guess.

Theyll do what they did 2 years ago...pump cash into the economy.

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From the OP link

Spanish bank BBVA (Amsterdam: BBV.AS - news) warned that "the possible correction in Chinese growth and that of other emerging economies is a risk factor" for the world economy.

Interesting that the article is written by Yahoo! Finance UK & Ireland and there's no comments quoted from any UK (or Irish) bank. They must be keeping quiet on the subject.

The World Economic Forum offered an opinion and that organization seems to have an address in Switzerland, the US, China and Japan but apparently no address in the UK.

Edited by billybong

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Haven't kept us afloat.

Apparently we export more to Ireland than to all the BRICs put together.

Given that Ireland was part of the UK until 1922, the word 'export' seems a bit stretched here but leads to an idea.

Perhaps we can give Yorkshire full independence next and boost 'exports' that way.

Look a bit further north a we may already have the answer ,depends who gets to keep the oil I suppose

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Lower growth in China based on a switch from investment to consumption is exactly what 'the west' needs.

This will be excellent news if/when it happens.

Trade deficits will start to close, the pressure on budget deficits will be reduced and so on.

Ofc it won't be such good news for the major commodities and commodity exporting countries like Canada, Australia, South America and some Mid-east.

But what goes around comes around..........

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Lower growth in China based on a switch from investment to consumption is exactly what 'the west' needs.

This will be excellent news if/when it happens.

Trade deficits will start to close, the pressure on budget deficits will be reduced and so on.

Ofc it won't be such good news for the major commodities and commodity exporting countries like Canada, Australia, South America and some Mid-east.

But what goes around comes around..........

In the meantime the Conservatives/LibDems (don't forget the LibDems ;) ) are trying to pump up the housing bubble helping to keep the current status quo going. MEW and extra debt etc to buy stuff from places like China.

Edited by billybong

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In the meantime the Conservatives/LibDems (don't forget the LibDems ;) ) are trying to pump up the housing bubble helping to keep the current status quo going. MEW and extra debt etc to buy stuff from places like China.

...All for the sake of GDP and for GDP read...their mates.

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In the meantime the Conservatives/LibDems (don't forget the LibDems ;) ) are trying to pump up the housing bubble helping to keep the current status quo going. MEW and extra debt etc to buy stuff from places like China.

I think to some extent the FED/BoE are keeping rates low to buy sufficient time for China to start to change her model.

After all someone has to be the consumer of last resort in the global economy. For it NOT to be the US (UK) then it has to be someone else. China looks like the major (only!) candidate.

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I think to some extent the FED/BoE are keeping rates low to buy sufficient time for China to start to change her model.

After all someone has to be the consumer of last resort in the global economy. For it NOT to be the US (UK) then it has to be someone else. China looks like the major (only!) candidate.

I believe the Chinese shadow banking system is acting as global consumer of last resort, now that everyone else has blown up. Can't see that lasting much longer.

ZIRP/QE has proved to be a terrible mistake. A bailout (or debt jubilee) for everyman is what was needed, not a rolling bailout and profiteering opportunity for bankers.

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Lower growth in China based on a switch from investment to consumption is exactly what 'the west' needs.

This will be excellent news if/when it happens.

Trade deficits will start to close, the pressure on budget deficits will be reduced and so on.

Ofc it won't be such good news for the major commodities and commodity exporting countries like Canada, Australia, South America and some Mid-east.

But what goes around comes around..........

...I agree, but do we have enough of what they want that over time they can't produce for themselves for less? ;)

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I believe the Chinese shadow banking system is acting as global consumer of last resort, now that everyone else has blown up. Can't see that lasting much longer.

ZIRP/QE has proved to be a terrible mistake. A bailout (or debt jubilee) for everyman is what was needed, not a rolling bailout and profiteering opportunity for bankers.

http://www.dailymail.co.uk/sciencetech/article-2524605/Worlds-cheapest-tablet-UbiSlate-7Ci-costing-just-30-launches-Britain.html

China has been cutting costs to the bone in order to carry on shipping.

Some day this war's gonna end.

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After all someone has to be the consumer of last resort in the global economy. For it NOT to be the US (UK) then it has to be someone else. China looks like the major (only!) candidate.

Was there ever any entrenched elite in history who willingly chose to give up their wealth and power? The current set up benefits the very people who would need to drive the changes- changes that will impact on their own bottom line.

If the 'democratic' west can't shake off the parasites at the top what chance a top down single party state?

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Not quite sure why Russia is added in the BRICs.

It's basically a petro-state with nukes, and a terrible place to do business.

My Dad has a cousin - very dodgy type ( ex copper) who has been doing a lot of business in Russia for the last 20 years. Seems to spend a lot on armoured limos and business associates who all seem to be into body building and black leather jackets ;)

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I believe the Chinese shadow banking system is acting as global consumer of last resort, now that everyone else has blown up. Can't see that lasting much longer.

But that is an investment bubble not consumption. The US has broadly reset, normal service will be resumed. I am not sure China blowing up would make much difference to the UK - they are not a source of demand. Did Japan blowing up make much difference globally?

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