But I really was convinced of my math, which connected iron ore prices inexorably with the extraordinarily large gap between China's
Nominal GDP
growth and interest
rates set by the PBoC, and it was clearly impossible to
maintain this gap.
The data is unambiguous on current economic conditions - GDP
growth in the last quarter of 2015 was a meager 2.11 % with full year
growth of 2.79 % according to the National Bureau of Statistics (NBS); inflation rose sharply to 11.4 % in February with prospects of reaching 12 % by March; capital markets have remained bearish; according to UNCTAD Nigeria's FDI fell by 27.7 % to $ 3.4 billion in 2015, and on current trends may fall even more precipitously in 2016; the de facto exchange
rate of the Naira for most producers and consumers is now N322 / $ even though CBN
maintains a
nominal N197 / $ for privileged persons; several economic sectors - construction, government, manufacturing, oil and gas and hotels and restaurants are in recession or barely out of it; government's official foreign reserves is down to $ 27.8 bn; and unemployment and under - employment
rates have worsened 10.4 % and 18.7 % by the end of 2015.