The year 2012 was a turning point, there can be no doubts about that. At least not when objectively and honestly reviewing the data. Up until the worldwide slowdown that hit that year, starting the year before, 2011, in an “unexpected” flare-up of global monetary crisis, the Great “Recession” was viewed as harsh, even prolonged. But in the end, everyone knew it was just a recession.
As Bernanke said in 2009, fix the financial system fix the economy. With everything that central bankers and government officials had done between 2008 and 2012, from the mainstream standpoint it seemed totally impossible things could go any other way given enough time.
But as time passed, and that 2012 downturn developed, it did produce some great sense of shock in certain key places. More so in Asia and Emerging Markets than anywhere else. After all, it was widely believed before, if the US or Europe might stumble nothing could stop China.
Hu Jintao had been China’s leader for almost a decade by September 2012. People might remember that month for the Federal Reserve’s panic, Bernanke repeating himself with a third QE. If two didn’t do the trick, why three? If you read the FOMC transcripts from that month you will realize they didn’t know. Some people understand that if you do something three or four times (as QE4 in December 2012) not only does it not work, you very likely don’t know what else to do.
Before Bernanke was proving again his penchant for chaos, however, Hu was in Russia for an Asia-Pacific Economic summit. He was never one for flare, in fact, according to media outlets Hu is on record only once ever making a joke in his entire political career. He was selected as Jiang Zemin’s successor largely because of his rigid self-discipline.
It was under Hu that China was transformed by an economic miracle, one that though interrupted by worldwide contraction was expected to resume. Again, that all changed even for Hu in 2012. In Russia, just two months before he would step down as General Secretary of the Central Committee of the Communist Party and begin the handover to Xi Jinping, Hu shocked observers by candidly admitting:
