China has announced a total of 8 trillion yuan (£800bn) of "stimulus projects" to try to boost confidence in an economy that appears to be cooling faster than expected.
One Chinese province after another has stepped forward over the last fortnight to announce their plans, in what appears to be a propaganda effort to reassure the public that the economy is still on track.
Meanwhile, Wen Jiabao, the Chinese premier, promised over the weekend that the Chinese government would intensify its efforts to boost the economy in the second half of the year.
On a visit to Guangdong, the heartland of China's export industry, Mr Wen warned that "there will still be a lot of problems and uncertainties in exports going forward. The third quarter is a crucial period".
Analysts said the government could now steer the value of the yuan lower, after a gain of 4.7pc last year against the dollar. Further export tax rebates could also be used to bail out manufacturers.
China's export sector is suffering from anaemic demand from Europe and the United States. In the first seven months, exports rose 7.8pc, while imports rose 6.4pc, leaving China in danger of missing its 10pc target for trade growth this year. July's exports grew at the lowest pace since 2009 and there are reports of factory workers leaving and returning to their home provinces for the first time since the financial crisis.
Meanwhile, in the USA, Charles Evans of the Chicago Fed, believes that the secret to reducing unemployment is to print more money. No kidding. Here's Reuters:
The Federal Reserve should launch a fresh round of monetary stimulus immediately, buying bonds for as long as it takes to produce a steady decline in the jobless rate, a top Fed official said on Monday.
Without a change in policy, the unemployment rate, now at 8.3 percent, was unlikely to fall below 7 percent before 2015 at the earliest, Chicago Federal Reserve Bank President Charles Evans told reporters in Hong Kong.
"I don't think we should be in a mode where we are waiting to see what the next few data releases bring," Evans told a seminar at the Hong Kong Bankers Club. "We are well past the threshold for additional action; we should take that action now."
Like the chiefs of the Fed's regional banks in Boston and San Francisco, Evans sees a case for doing now what the Fed has done only two times before -- buy long-term bonds in an effort to lower long-term borrowing costs.
Evans said he supports an open-ended bond-buying program, an approach that appears to be gaining converts at the U.S. central bank.
The Fed could stop buying bonds after two or three quarters of steady declines in the jobless rate, Evans said, but then should continue to keep rates near zero until the jobless rate falls to 7 percent.
Let's see, how does that work? The Fed creates jobs by buying bonds? How? Well, it keeps interest rates low...maybe that's it. But wait, interest rates are already near record lows. The Fed already lends at effectively zero. It's been doing so for nearly 4 years. And as for long term rates, they're so low that - adjusted for inflation - borrowers are barely paying any interest at all.
People already have more than enough debt. Offering them more...on even easier terms...doesn't necessarily cause them to want to go more deeply into debt.
And even if the low-priced debt really did drag borrowers deeper into the hole, it is hard to see how that really makes anyone any better off.
But if consumers could be led to consume more producers would be inspired to produce more...and hire more people. Then, we could enjoy a little bit of bubble ...before we all go broke.
So far, however, neither consumers, nor bankers, nor businesses seem to be taking the bait. The Fed lends at outrageously low rates. But bankers don't pass the money along...and households and businesses don't seem to want it. Instead, the economy stays locked in this period of deleveraging - a Great Correction - which could last for another 5...10...years.
And it could cut much more deeply. Stocks are still high; they could easily trade at half today's prices. Real estate, apparently bottoming out, could still decline by 20% or more...
And consumers - whose incomes are actually lower than they were 10 years ago - could stop consuming so much.
In terms of interest rates, we could still see the 10-year note yield at 1% or lower.
Not that we know those things will happen. But we wouldn't want to be holding a whole portfolio of US stocks while we wait to find out.
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.