As One Economy Implodes Another Economy Explodes

The further back in history one looks, as I have heard Mike Maloney say, the further into the future one can see. What do we see as we look forward from here?

For those paying attention it is easy to see that China, along with her closest ally, Russia, are forming alliances’, growing business opportunities and retooling their domestic economies from the ground up. These nations are embracing the 21st century and 21st century technology that has the worlds attention. Well, most of the worlds attention. If you listen to the US, UK, and their allies mainstream media you would think China and Russia are still 3rd world nations with barely two sticks to rub together to create fire. Nothing could be further from the truth. If anything the Western “developed” nations, like the US, UK and their allies are the nations that are in fact stuck in the 1950’s mindset that their respective nations are in charge of the world – they are not.

If we review what has happened, just this week, in China and Russia and compare this to what is happening in the US/UK we will see polar opposite scenarios playing out.

First up, the positive side of the fence – China and Russia

The BRICS New Development Bank (NDB) has approved two loans – for a water infrastructure project in India and the other is for a transport infrastructure project in Russia.
The Board of Directors (BoD) of the NDB approved two infrastructure projects with a loan value of US$413.8 million during the 12th BoD meeting in Shanghai on November 20.

“The NDB was established to mobilize resources for infrastructure and sustainable development in BRICS and other emerging economies and developing countries, and the two projects approved today are fully in line with the Bank’s mandate and national development plans of our member countries,” said Mr. K.V.Kamath, the NDB President.

The larger loan of $345 million will be lent to the Government of the Republic of India, which will forward it to the Government of Rajasthan for rehabilitating the Indira Gandhi canal system.

It will be a multi-tranche facility so it will be drawn down in stages as the project progresses.

Moody’s Investors Service upgraded India’s credit rating to Baa2 last week from Baa3 and changed the outlook to stable from positive. Its decision was underpinned by expectations that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term.

S&P Global Ratings rate India at BBB- with stable outlook, while Fitch Ratings has the same rating at BBB- with stable outlook.

The smaller loan of $68.8 million will be lent to the Government of the Russian Federation who will use it for the construction of a toll transport corridor connecting the Ufa city centre to the M-5 federal highway. 

The Russian economy expanded by 1.8 per cent year-om-year (y/y) in the third quarter after a near five-year high of a 2.5% y/y gain in the second quarter.

While the NDB gave the go-ahead for loans to seven projects reaching $1.5 billion in 2016, the amount of approved loans is expected to reach $2.5 in 2017.

“We want to fund projects that are creative and bring benefits to the local people and environment,” NDB Vice-President Zhu Xian said earlier. Source

After conducting a couple of searches for long term infrastructure projects that are being funded this week, I find a sad lack of any funding for any such projects in the west. What we were able to find were excuses, lies and a very serious need for infrastructure projects within the United States. If the US is going to remain the top economy in the world, it needs to address the crumbling infrastructure and stop funding so many unConstitutional wars.

What is the overall state of the nation’s infrastructure?The U.S. population has more than doubled since the 1960s, when most of the country’s major infrastructure systems were designed. Many are reaching the end of their lifespan, and are dangerously overstretched, experts say.

The American Society of Civil Engineers (ASCE) has compiled regular “report cards” on the state of U.S. infrastructure since the 1980s. In its 2017 report, the ASCE finds that the nation’s infrastructure averages a “D,” meaning that conditions are “mostly below standard,” exhibiting “significant deterioration,” with a “strong risk of failure.” The group estimates that there is a total “infrastructure gap” of nearly $1.5 trillion needed by 2025.

Other analysts agree that the shortfall is large. The U.S. Department of Transportation (DOT) estimates that over $800 billion is required just to shore up the nation’s roads and bridges. McKinsey researchers say that $150 billion per year will be required between 2017 and 2030 to keep abreast of all the country’s infrastructure needs. Source

Here is a short video produced by the American Society of Civil Engineers (ASCE). This group of people should know a thing or two about the importance and maintenance of roads, railway, bridges and water systems.

If our so-called “leadership” continues to ignore infrastructure and continue to waste our investment dollars on war we will awaken to much higher taxes, fewer jobs and our world, the United States, will have one of the worst road, bridge, railway and water systems in the world.

- Source, Rory Hall via Sprott Money