We’re not number one anymore. The International Monetary Fund just released this year’s economic production numbers and China has officially overtaken the US as the world’s largest economy:
The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.
As recently as 2000, we produced nearly three times as much as the Chinese.
Let that sink in. Just fourteen years ago, the US had an economic output nearing three times the Chinese economic output. There are many contributing factors to this transition, but I can think of a few principal ones.
First, the US has transitioned from a producing economy to a consuming economy. And we have fueled our consumption with little more than debt. And what have we consumed? Cheap goods and services made by China. So China’s astronomic growth have paralleled our astronomic debt. That’s a recipe for disaster.
Second, the civil government attempts to “stimulate the economy” have done little more than stagnate our economy. The answer is not more civil government spending. The answer is to fix the currency and allow private investors to use more of their wealth to grow production in the US.
So what does this mean exactly? Right now, possibly not that much. China is still very dependent on American currency and American trade. But how long will that be the case?
With this new revelation, China has new power. And there is no doubt that she was already fighting for a new international currency and other markets for her goods. If either of these happens, the US economy will begin a steep decline, if not crash. And there is little we can do about that without drastically changing our political and economic direction. A ship like that can’t be turned around in a moment.