“Is China Headed Toward Collapse” asks Politico, relying on legendary short-seller, Jim Chanos, of Enron fame, who is China-bearish.

So are we, as we’ve been hearing the numbers in China are as frothy as souffle. But on the other hand, we’ve also become bearish about hedge-fund managers in bed – ahem, we’re talking metaphors here – with the media, since dipping into the naughty dirt dished up at Deep Capture.

“Chang argues that inconsistencies in Chinese official statistics — like the surging numbers for car sales but flat statistics for gasoline consumption — indicate that the Chinese are simply cooking their books. He speculates that Chinese state-run companies are buying fleets of cars and simply storing them in giant parking lots in order to generate apparent growth.

 Another data point cited by the bears: overcapacity. For example, the Chinese already consume more cement than the rest of the world combined, at 1.4 billion tons per year. But they have dramatically ramped up their ability to produce even more in recent years, leading to an estimated spare capacity of about 340 million tons, which, according to a report prepared earlier this year by Pivot Capital Management, is more than the consumption in the U.S., India and Japan combined.” 

 My Comment

We’re obviously in the middle of info-wars. 

First there was “green shoots,” the mother of all rumors. Then there were the rumors about the US government asking embassy officials to use local currency (we heard that one down here in August); then there was the one about the Chinese walking away from oil derivative contracts; then came the Fisk report about the Gulf Arabs (and others) diversifying away from the dollar; next came rumors about China buying gold from the IMF; following on that it was actually India that stepped up and bought half of the IMF’s gold  – although since the purchase is against IMF SDRs (Special Drawing Rights) and since the Federal Reserve uses several CBs around the world as depositories, this may be just a book-keeping entry for ought we peasants know.

 Mixed in with the financial psyops comes a healthy doze of fear-mongering over swine flu and random shooters….while what we should really be terrified about* slips by under the radar with nary a squawk from the populace.”

*for eg. the approach of biometric IDs, the restriction of free speech, the end of banking secrecy, and the centralization of medical information online