August 2011, 8:52 a.m.
By Debbie Carlson
Of Kitco News
News) -- Stock and most commodity markets around
the world have fully reflected a U.S. recession, European
recession and Japanese recession, says Shawn Hackett,
president of Hackett Financial Advisors. “What the markets
have not yet fully factored in is a recession in China.
When looking at the recent numbers it is very clear
that the Chinese economy is in fact contracting as we
speak especially when adjusted for inflation,” he says.
As evidence, Hackett points to the Chinese purchasing
managers index falling under 50, which means manufacturing
is contracting; a drop in the Chinese small and medium
enterprise index, which means liquidity strains; falling
car sales; rising copper inventories on the London Metal
Exchange; and rising bankruptcies. It may take another
two months for markets to factor in a Chinese recession,
which will lead to further market weakness.