David Stockman: Red Swan hiding economic depression?

Black Swan with Red Beak

Former US Treasury Secretary David Stockman put out some words of warning:

August 19, 2017

Given the anti-Trump feeding frenzy, we continue to believe that a Swan is on its way bearing Orange. But if that’s not enough to dissuade the dip buyers, perhaps the impending arrival of the Red Swan will at least give them pause. …

What is actually going on is a short-lived global credit/growth impulse emanating from China. Beijing panicked early last year and opened up the capital expenditure (CapEx) spigots at the state-owned enterprises (SOEs) out of fear that China’s great machine was heading for stall speed at exactly the wrong time.

The 19th national communist party Congress scheduled for late fall of 2017. This every five year event is the single most important happening in the Red Ponzi. This time the event is slated to be the coronation of Xi Jinping as the second coming of Mao.

Beijing was not about to risk an economy fizzling toward a flat line before the Congress. …

However, you cannot grow an economy indefinitely by building pyramids or any other kind of low-return/no return investment – even if the initial growth spurt lasts for years as China’s had.

Ultimately, the illusion of Keynesian spending gets exposed and the deadweight costs of malinvestments and excess capacity exact a heavy toll.

If the investment boom that was financed with reckless credit expansion is not enough, as was the case in China where debt grew from $1 trillion in 1995 to $35 trillion today, the morning-after toll is especially severe and disruptive. This used to be called a “depression.”…

China’s propagated spurt in global trade and commodities was artificial and short-term. It was done to flatter China’s rulers at the 19th party congress.

Now that a favorable GDP glide path has been assured, China’s planners and bureaucracy are already back at it trying to find some way to reel in its runaway credit growth and bloated economy before it collapses. …

In sum, during the last 19 months the Rd Ponzi propagated a false upturn in the global economy that is already decisively reversing. This comes at the same time that central banks of the major developed world economies are finally bringing their printing presses to a halt. http://www.zerohedge.com/news/2017-08-19/david-stockman-warns-dont-forget-about-red-swan

Basically, David Stockman is saying that the world is in worse economic shape than it looks, and it looks better than it should because China spent capital to look good for its every 5 year Congress. He indicates that otherwise this would have looked more like a depression. He is also calling what China did a Ponzi scheme (a Ponzi scheme essentially involves bringing in money to make something look better than it really is–eventually Ponzi schemes fail–and fail hard).

Before going further, let me add that US government spending and the Fed’s quantitative easing programs (legal ‘counterfeiting’) have made the US economy look better than it really is–this is another “Ponzi scheme”–and this will not last (cf. Habakkuk 2:6-8).

David Stockman also commented that China has its own credit and other economic problems. David Stockman is correct about that. China is hoping to dominate the world economically as well as to have enough economic growth to quell domestic anxieties. Eventually, this will not work well for China. China hopes that it ‘Silk Road’ project of China will increase its influence in Asia, the Middle East, Europe, and even Africa, while also contributing to domestic tranquility. Yet, China has not fully funded that project yet (see Will debt derail China and its ‘One Belt, One Road’ plan?) and is facing some credit issues.

David Stockman also brought up ‘swans.’

What do swans have to do with anything? Years ago, unexpected events of major magnitude were called “black swan” events. Notice also the following:

The black swan theory or theory of black swan events . . . was developed by Nassim Nicholas Taleb to explain:

The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology

The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities)

The psychological biases that make people individually and collectively blind to uncertainty and unaware of the massive role of the rare event in historical affairs (Wikipedia, viewed 12/12/13)

Since then, other “swans” have been mentioned. Gray swans are events that look more likely to possibly happen, they are not considered as unlikely/random as black swan events.

Apparently what might happen to Donald Trump is being considered to be an “orange swan,” which may be the source of odd and significant events.

China is apparently considered to be a “red swan” by David Stockman for reasons like its red Communist flag and that some of what it may be involved in can be speculated in advance.

What does any of this have to do with prophecy?

The Bible tells us that the power that will dominate trade later this century is not China or the USA, but Europe (cf. Revelation 18).

What is going on with China and the Trump Administration may propel Europe’s rise in ways that few will expect.

Strange things are happening.

As far as some potential “black swans” and 2017 go, here is a link to our video: Twelve ‘grey swan’ events to watch for in 2017?

Some items of possibly related interest may include:

Twelve ‘grey swan’ events to watch for in 2017? The Japanese financial firm Nomura put out a list of ‘ten grey swans’ events to look out for in 2017. Indirectly based upon ‘black swan’ theory, these are events that Nomura believes could greatly impact financial markets in 2017–some of which are related to the election of Donald Trump. Dr. Thiel expounds on each of these ten and adds two additional ones. What is a ‘grey swan’ and how may events in 2017 impact the future? What were two events in 2016 that look to have significant impact in 2017? Dr. Thiel brings out biblical prophecies that Nomura did not refer to so that you can better understand what will happen, as well as when certain events will not happen. This is a video.
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Is China paving roads to Armageddon? China is working on something known as the ‘Silk Road’ project or the “One Belt, One Road” initiative. NBC reports that China intends to spend one trillion dollars to build roads, bridges, railroads, and maritime facilities to reach from China to Europe and China to the Middle East. Over 60 nations, including Russia, are involved with this. Could this Silk Road project possibly produce thoroughfares that could be used by troops that will amass at Armageddon? Dr. Thiel discusses this project and some of its potential prophetic ramifications in this video.
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