Most of the world today Economically depends on Chinese Economic Growth

Tekoa Da Silva: Marc, I had the chance to sit down with you a year and a half ago. At that time you said, “emerging economies will be submerging soon.”
Since then, we’ve seen emerging market equity indexes down, emerging market currencies down against the dollar, and China’s yuan devaluation—which you also talked about during that interview.
What are your thoughts on where we are currently?


Marc Faber: Well, I’m glad that you say I’ve been right about something, because whenever I’m on CNBC or Bloomberg, they always put me down about everything.
But yes, I wasn’t very optimistic about emerging economies at that time and I think I’m still cautious but I have to qualify these statements.
Basically, most of the world today economically depends on Chinese economic growth. When China is growing rapidly, they buy a lot of resources from the resource-producing economies of the world. Whether it’s in Latin America, Africa, Australasia, Central Asia, Russia—they also have a boom, and then they buy more goods from the industrialized countries of the world. So the whole global economy picks up in that context.
On the other hand, when China slows down, everything goes into reverse and you have essentially a vicious circle on the down side.
My sense is that the global economy is not as the Federal Reserve and other groups expect it to be in terms of accelerating on the upside, but actually that it’s in contracting mode and let me explain partly why.
If the Japanese and the Europeans pursue very expansionary monetary policies, it means that those currencies go down against the US dollar. So in dollar terms, their economic activity shrinks. As their currencies go down and economic activity shrinks in dollar terms, they buy less goods also. So then the global economy contracts.









The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more