Brief video, under 10 minutes, bold added.

Alex: Let's talk about the US economy and the Chinese economy. There are some celebrations coming out of the Biden WH, they're presenting the narrative that they've got everything under control, that gas prices are coming down, they've gotten a grip on inflation, etc. Meanwhile in China, things don't appear to be going so well. What's the real story behind these two superpower economies?

Alexander: In the US: brief ups and downs in monthly figures don't mean much, you have to look at the overall trend. What happened is that oil prices fell, so gas prices also fell. But the overall trend is for prices to go on rising, will probably see oil prices start to rise again in the autumn and the people in government know this very well. The highest inflation rate is nowhere near to being reached, and I think the Fed thinks the same. They were pouring cold water on this problem but they're still talking about raising interest rates.

I know the argument that the interest rates aren't about inflation, they're about screwing Europeans and the euro and I buy that to a point. But it would be harder for the Fed to raise interest rates if inflation was coming down so the Fed, which is much better informed than the WH, doesn't believe inflation is coming down. I think they believe it will continue to go up and they will continue upping interest rates. So think in the autumn we'll see more inflation and interest rate increases and a deeper recession.

Bear in mind that all these things are connected, we've seen that these inflation-related interest hikes around the world and the Fed's policy of hiking rates are causing money to tighten pretty much everywhere. It's now clearly feeding into China's housing and construction bubble.

I think few people understood that the very high growth rate we saw in China for the last decade were related to a housing bubble. The Chinese Central Bank is having to do the opposite of what the Fed is doing, cut interest rates. They're doing this because they're worried about the property market collapsing in China. China has very low inflation, 1-2% in a time when everyone else's is rising must mean that demand in China is very low and this must be affecting the overall performance of the Chinese economy. So both economies are in trouble and I suspect both are in recession.

If you look at the figures China churns out they suggest continued growth but I think if you look at the real economic activity in China the economy is in recession. But recessions are a normal part of an economic cycle and China is overdue for one, it needs one to rebalance its economy.

The manufacturing sector still looks healthy and strong; the problem is that growth has been artificially sustained for many years through this housing and construction bubble. That has to be unwound and that requires a recession.

Akex: Which country do you think is better equipped to get through this?

Alexander: China, because the manufacturing sector still looks strong, resources still look strong and I think they have a purposeful government. The US lacks the last - that's where the core weakness in the US lies, at the center of power in Washington. It doesn't have a strong government there. What we see is the Biden administration passing a new anti-inflation bill which by increasing spending is going to increase inflation.

Recessions are necessary to purge the imbalances out of the system, and the US used to know this well. The problem is the way it's being done in the US is so chaotic and the government's response is so bad that it's just going to make things worse. I think changing this will need a different administration.

Alex: for China, how does this affect the situation in Taiwan?

Alexander: However much an economic recession is going to create a sense of political fragility I think it will make Chinese leaders even more determined not to let the situation in Taiwan fester, that you'll see more buildup of military forces and doing what needs to be done to bring Taiwan under China's control.