Concerned That Asia Could Blow A Hole In Future Economic Recovery

April 1, 2020

Thinking somewhat far off into the future, our researchers believe China/Asia could become the next Black Hole in the global economy.  China recently released its March PMI number which came in at 52.0 – showing moderate expansion in Chinese manufacturing.  The February Chinese PMI level was 35.7.  We strongly believe China wants to show some strength in their perceived economic recovery and that these PMI numbers are somewhat “manufactured for effect”.

We believe the real economic toll taking place in China/Asia will continue to unfold over the next 3 to 6+ months as the historic expansion of wealth and the exported foreign investment from Wealthy Chinese continues to contract over this time.  In a very similar manner to what happened in the US when the Japanese economy contracted in the 1990s – as wealth creation processes collapse, these foreign investors suddenly start to liquidate assets trying to protect their “home-country assets”.
(Suggested Reading: https://www.barrons.com/articles/china-pmi-data-coronavirus-51585666441)

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