China’s export crash

We already know that China is due for a serious debt-crash on the basis of its successful post-2008 bubble inflation. The Zerohedge chart demonstrates the difference between US asset-disinflation and Chinese asset-inflation, all of which is debt-based.  And M2 is up by 1,000 percent since 1999. But that’s the warning; the first sign that the end was in sight was when a small bank threatened to go into default a few months ago. It was promptly bailed out and the entire matter was swept under the rug, ignored by pretty much everyone who doesn’t read Zerohedge.

However, it’s a little hard to ignore a miss of this magnitude:

Plenty of excuses out there for this evening’s colossal miss in Chinese exports (-18.1% YoY vs an expectation of a 7.5% rise) mainly based on timing issues over the Lunar New Year (but didn’t the 45 economists who forecast this data know the dates before they forecast?) This is a 6-sigma miss and plunges China’s trade balance to its biggest miss on record and 2nd largest deficit on record.

Economic statistics are largely fictitious, of course, but the size of this miss is indicative of a problem that is getting too big for even the most outrageous fictions to conceal.