Is China going bankrupt faster than U.S.?

WASHINGTON – Here's a shocker.

China is going broke faster than the U.S., according to economic planner Kirk Elliott – who is making this point the lynchpin of a live webinar he's conducting for WND viewers today at 12:30 p.m. Eastern.

Here are some shocking facts Elliott discusses in a WND column today on which he will expound during the webinar:

• China's debt is about $36 trillion yuan (or $5.68 trillion USD). This number is astronomical considering that it is just a little more than one-third of the U.S. total debt, but the difference between the U.S. and China is that the U.S. national income per capita is $47,140, whereas China's national income per capita is $4,260 – not even one-tenth of the U.S. amount. To be on par with the U.S., China's total debt should be around $1.5 trillion USD, but it is three times that! Considering that the U.S. has an unsustainable debt position, China's is ridiculously out of control and puts that country in extreme danger of a financial collapse of epic proportions.

• China's officially published interest rate of 6.2 percent is fabricated. In reality China's inflation is 16 percent. This is eerily similar to the United States as well. The U.S. official inflation of around 3 percent is nowhere close to unofficial inflation estimates of 10-13 percent. What does this mean for China? This means that cost of living, wages and cost of goods sold in China will have to rise, and instead of exporting deflation, China will be exporting higher priced goods, thus affecting the rest of the world that purchases its goods. The world is on the verge of an inflationary cycle like we have never seen. Additionally, central banks around the globe are printing money on a massive scale to try to stimulate liquidity and spending (this is the definition of inflation!). Add to this a rising price structure in China, the major exporter to the world, and we could be preparing for a global hyperinflation.

• Excess capacity in the economy and private consumption is only 30 percent of economic activity. Of course this is the case, as China's population is extremely poor and China is an exporting nation. The vast majority of its goods should not be private consumption. But, what the excess capacity indicates is that there is a global economic slowdown. Since China's growth is dependent on the rest of the world purchasing its goods, a global recession does not bode well for China's economic future.

• China's officially published GDP growth of 9 percent is fabricated. The real number is a negative 10 percent! China's robust GDP has always been a pipe dream, as the country has been building infrastructure (railroads, highways and real estate development – including ghost cities). Since personal spending is only 30 percent of China's GDP, roughly 70 percent of China's GDP can be attributed to this massive build-up. It will dry up, as has already started. The regime is about to be exposed, as people are starting to wake up to the fact that the "emperor has no clothes."

• China's taxes are too high. Taxes on Chinese businesses – indirect and direct – are 70 percent of earnings. Individual tax rates are 81.6 percent. There is no way China can remain strong with these high taxes. We thought our taxes were high – because they are! But we are like schoolboys compared to China. It is the big boy on the taxation block. It's just economics 101 – a country cannot remain strong or viable with tax rates this high. The population will ultimately revolt. I really believe China is ripe for revolution given these numbers; it's just a matter of time. Sadly, for the Chinese citizens, their strong-arm government will not look kindly on any kind of political or social opposition.

Elliott concludes: "There is an economic tsunami about to engulf China, and because of the size of China's economy and its manufacturing might, the impact of the tsunami will be felt far and wide. The United States will feel it in the form of inflationary pressures that we can't afford right now. Periphery countries to China may feel its military might or cower to political pressure as governments that run out of money start to do irrational things (look at the United States, or Greece, or the European Union)."