A wise man once said:
“if you want to crown them, then crown their ass! But they are who we THOUGHT they were! And we let ’em off the hook!”
I am not ready to crown their asses just yet. And their asses, in this instance, happens to be China. In a piece today, The Economist argues that China will overtake the USA in economic size by the end of the year:
The problem is, they’re adjusting for purchasing power parity to get at this view. It’s not an inaccurate view, but a little misleading when viewed through the lens of more traditional indicators like real GDP, which, as Graeme Wearden of the Guardian shows us, is not even remotely close:
There’s no doubt that China will one day overtake the USA in terms of total economic size. So this is not a matter of if, but when. But let’s not be so eager to crown them just yet.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.