China's surprise rate cut signals desperation, bad news ahead
China's surprise rate cut signals desperation, bad news ahead. Friday's announcement reveals troubling trends in China's economy and even its political system. Going forward, do not expect good news coming out of the country, perhaps for years. What does the PBOC's out-of-the-blue rate cut suggest? As an initial matter, it tells us Beijing has finally come to the realization that something had to be done about the slumping economy... It's about time China's officials recognized reality. A big-jolt stimulus would not have been required if the country was in fact growing at a 7.4% clip, the rate the official National Bureau of Statistics reported for the first nine months of the year... Last week's move indicates-screams, actually-that low estimates of growth, which up to now have been widely rejected, were in fact close to the mark. (VIEW LINK)
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