In September of 2014, when we put out the following chart, we stated that the US was on the verge of losing its top dog status. The picture below is worth a 1000 words and shows how every major empire lost its way. What the chart does not reveal is that in all cases stupidity coupled with a major dose of arrogance was the main reason these nations fell.
The IMF just released the Latest figures for the world economy. Before we go any further we would like you to keep in mind that in 2000, the US produced nearly three times as much as the Chinese. So in roughly 14 years the Chinese turned the table on the U.S. China will produce 17.6 trillion this year compared to 17.4 trillion for the US. Hence, its official the U.S has been knocked off its perch and its all downhill from here for the U.S.
Things to keep in Mind
Whenever a nation is about to be displaced from its top dog position, it seems to become more aggressive instead of trying to form new bridges. Instead of learning from history, it seems that we are doomed to repeat it, but this does not mean you have to lose money in the process. Disaster is nothing but opportunity saying hello in disguise. This chart indicates that the petrodollar is very close to being displaced and once it is, the precious metals sector will soar to the moon.
This chart also illustrates why China is becoming more vociferous and rebellious towards the USA. They understand the fact that they are destined to be the new top dog, but at the same time they are also building bridges with top energy producers such as Russia, Venezuela, Iran, etc, etc, The most important bridge they are building is with Russia which is not only an energy powerhouse but it is also one of the top arms producers in the world.
What we find interesting is the fact that mainstream media is not covering the fact that both china and Russia are aggressively putting into place procedures to get rid of the dollar. This shows you how controlled the USA press really is. Freedom of speech, yeah right; more like freedom to misinform as you please. Now you understand why Ukraine is being used as a guinea pig.
China has overtaken the US, to reclaim a position it has held before and it will most likely hold onto this position for a very long time. For the U.S, the trend is downhill, and it best it can hope that India or some other nation does not knock it even lower down the rung.
Some other interesting pieces of information;
China has a savings rate of close to 50%, which is almost 10 times that of the U.S personal savings rate.
China surpassed the U.S as the World’s largest exporter long ago.
In terms of manufacturing they buried us years ago too, so this move was all about assured.
Long term China makes for a great long term investment and all strong pullbacks should be viewed as buying opportunities
Other articles of interest:
Share buybacks Wall Street scam (Dec 16)
Global warming; greatest scam ever (Dec 13)
Bonds will not crash in 2015 (Nov 23)
Is Crude oil headed higher or lower? (Nov 20)
Is the Dow going to crash in 2015 (Nov 18)
Market Timing Does it work (Oct 28)
Turkey shot down a Russian Drone (Oct 27)