Now it is universally accepted that growth in China is slowing. If a large number of communications that we receive are any indication, North American investors make two underestimations: first how much China’s growth is really slowing, and second how much it can hurt their investments in stocks, bonds and commodities, including gold and silver.
After a careful study of the Federal Open Market Committee (FOMC) minutes released yesterday, my view is that the subject of China’s slowing growth has become more important for North American investors.
China Is Slowing
The Chinese economy has been on a tear for a while but is now slowing. Economists measure an economy by its GDP. The GDP is a total measure of the value of goods and services produced by a country. The chart compiled by The Arora Report from the World Bank data tells the story of phenomenal growth of Chinese GDP over the last two decades.
Economic indicators can be broadly divided into three categories: the lagging indicators, the coincident indicators, and the leading indicators.
The focus of our research is leading indicators from 23 countries. As the name implies, leading indicators provide an early indication of the direction of an economy. Examples of such indicators are vendor delivery schedules, hours worked in a week, and new construction permits. Early last year, when the consensus was that the torrid growth in China was continuing, we were beginning to write that leading indicators were forecasting a slower economy. …Read more at Seeking Alpha
