Let’s ignore the crazy stock market for second (proof of the stock market’s craziness: GM is up today), and recognise that there’s no rebound yet in the American economy. There may be one before the year is out, but there isn’t one now.
But as we’ve been saying, the decoupling story is real. China is actually rebounding. The Chinese PMI showed growth for the second straight month. But maybe youre sceptical of official economic numbers coming out of China.
However, confirming the rebound are privately collected numbers from the firm Panjiva, which monitors manufacturing and supplier information between private parties. According to them, the number of manufactures shipping to the US grew 8% in April, after growing 2% in March. Those two months of gains follow several straight months of declines. It’s not huge, and even they ahve some caveats (about seasonally adjusted data), but the change from a few months ago is real.
Now… to get them buying up some US bonds with that money, rather than gold, oil, copper and rare earth metals. That’s the key.