China's Industrial Output Rises 11%

Stimulus plan working. Much bigger than U.S. plan (as a percentage of GDP). No ridiculous debate about "taxpayer on the hook," or, "who will finance the debt?" or, "generational theft."

“There is no doubt that industrial output will continue to recover, boosted by the strong growth in investment and bank loans,” said Lu Zhengwei, a Shanghai-based economist at Industrial Bank Co.

Notice the sharp rebound in loan growth because the government is boosting aggregate demand and not putting onerous conditions on banks to "pay back" a profit to the gov't.

“The export engine has died: China is in a ‘help themselves’ mode, pump-priming like crazy to increase fixed- asset investment and keep retail spending going,” said Joseph Tan, chief Asian economist at Credit Suisse Private Bank in Singapore. “I think they’re going to pull it off.”

Their exports have died because the U.S. has allowed aggregate demand to die as a result of policy here that is opposed to gov't support of aggregate demand. However, China doesn't need us; they are stimulating domestically.

Here's another thing you don't hear from China: statements like, "The whole world has to work together in order to get out of this mess." China is helping itself and not relying on anyone else.

Will we learn from this?

Not likely.

By the way, lower exports to the U.S. will mean significantly less accumulation of U.S. Treasuries. Does this means U.S. interest rates will shoot up as per everyone's fears? Absolutely not!!

Investment advice: Buy China stocks!