Signs Indicate China Falling Apart Faster Than Most Thought; Emerging Market Report by Profit Confidential

The Chinese economy appears to be falling apart fast, according to Michael Lombardi, lead contributor to Profit Confidential. While gross domestic product (GDP) growth figures released by the People’s Bank of China about the Chinese economy are indicating a slowdown, Lombardi believes there are other indicators that are flashing bright red contraction signals.

In the article, Chinese Economy Contracting Much Quicker Than Originally Thought, Lombardi looks at several specific parts of the economy, like electricity consumption.

“When the Chinese economy was expanding at a stronger clip, year-over-year growth in electricity consumption ranged from 10% to 11%,” says Lombardi. “For March, electricity consumption grew just 0.7%.”

Lombardi also looks at the fact that rail cargo volumes in the Chinese economy are growing at half the rate they were last year, while sales of bulldozers are off over 50% in March when compared to last year.

“Loan growth is critical to any economy, because it measures how much new investment and consumption is being generated,” says Lombardi. “In April 2012, loan growth fell 8.2% from last year.”

In April, exports were expected to rise 8.5%, but Lombardi says that exports actually rose only 4.9%.

“The leaders in China are clearly worried about the direction of the Chinese economy,” says Lombardi. “The reserve requirement ratio—which is equivalent to lowering interest rates—was lowered for the third time since November last week.”

Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market…before it plunged.

Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.

To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.

Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit www.profitconfidential.com.

Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.