The news media suffers from hyper-inflation. We can see it in the headlines.
Here’s a recent one: China Will Invest $1 Trillion Globally; How Much Will U.S. Get? But when we read the article, we are told this:
According to author Orville Schell—who has lived in China off and on for more than 40 years—China will invest more than $1 trillion globally over the next decade. That begs the question: Will the U.S. get its share?
I see. A decade. Dividing $1 trillion by ten years, we get $100 billion a year. If the U.S. economy keeps plugging along with no growth, that will be $166 trillion.
The financial media are now addicted to these nutty headlines. The headline writers are told by their editors to multiply everything by ten to one.
China invested $5 billion in the U.S. economy last year—far less than the $51 billion that the U.S. invested directly in China. It currently owns about $28 billion worth of American assets—in companies and real estate, according to the Rhodium Group. And that number is expected to grow.
I see. $28 billion. Total. Compared to what? We read on Wikipedia.
As of the first quarter of 2010, domestic financial assets totaled $131 trillion and domestic financial liabilities $106 trillion. Tangible assets in 2008 (such as real estate and equipment) for selected sectors totaled an additional $56.3 trillion.
Until you read the article to see if the ten-to-one con job is being used, ignore all headlines with big dollars listed. This is especially true of reports on cuts in federal spending.