China's Economy is a LEADING indicator for the WEST! Details!

As I write, China's economy is slowing and deflation has started. The core issues are the following:

1. Real estate is overbuilt and demand is crashing. Buyer demand is the core problem.

2. Consumers are gloomy. Consumption is starting to decline. Prices are still high but starting to decline.

3. Debt is at a record high. The central planners have limited options.

4. Infrastructure is mostly complete and this means less construction going forward.

5. Export activity is slowing as the West is demanding less. American trade deficit is now declining as American demand slows.

China is a leading indicator for the West. My sense is that the West will start its decline later in 2024. We need to watch the markets in China for signs of what might happen in the West. Argentina is a prime example for what happens when a market crashes. 

Argentine inflation is now over 250% and demand is starting to decline fast. I expect this market to be in a depression by the end of 2024. The election of Javier Milei changed everything for Argentina. This is likely to happen in America after the coming election in November. The debt problem in America is similar to what we witnessed in Argentina. China is not much better.

Overall, our economies are in serious trouble. Our central planners will do all they can to postpone any negative outcomes. But this will be impossible once the TREND of deflation starts in serious. As I write the real estate prices for homes in my area are declining. The rate of decline will grow for 2024 and 2025. Watch China for signs of what might happen in our markets. Europe will follow China IMO.

The economic ball has reached bubble levels and the decline will bring big change for everyone!

In my area of Arizona the real estate markets have peaked. I now witness declines in prices in many areas (the average is 5% as of today). The problem is DEMAND has crashed.

I expect our central planners to restart QE and lower interest rates later in 2024 and 2025. This will not change the trend, however. A trend in motion will continue until it ends.

What happens over in China is likely to repeat in the WEST. Over building has occurred in all markets these past 10 years. Prices are at a bubble level. Demand is now crashing!

The European and American housing markets could crash big time by 2025. I will watch China for evidence. Mortgage rates are now 7% in USA and affordability is nil. Demand has crashed.

Have a great day! I am: Donald B. Swenson, Economist/Philosopher, http://kingdomecon.wordpress.com. Also, donaldswenson.blogspot.com.