Modern China is driven by central planning and a deeply crony culture. Interestingly the country has succeeded in reinflating its housing bubble. I say reinflate because about a year and a half ago things looked like they were really going to bust. (Thanks to the unsound monetary policy that created the initial unstable boom.) Then the government and the banks intervened (in typical central planner fashion) and we’re off to the races again. The government delayed the inevitable. But the debt monster lurks,
Think of 2008 as a primer. A very difficult and disruptive primer. Nothing’s “fixed.” Markets never really cleared.
Additionally, as is explained below, the now 0% interest rates are almost locked there as the cost of serving US debt by the US government would explode upward with increased (and very likely closer to real market level) rates. That’s a sticky place to be to say the least.
But people will continue blissfully along, until they can’t.
Not the kind of economic boom the Keynesians were hoping for.
Look at it this way. If you are part of the vast, generally assetless or nearly assetless middle class you won’t have to watch the value of what you have decline. I guess that’s a good thing, sort of.
The world is slowing. China is in serious trouble and the ripples emanating from Beijing are becoming waves. The Keynesian experiment post-Crash is failing. (As the Austrian economists said it would.)
World markets are built right now on cotton candy and the rainbow dreams of central bankers.
I don’t know why these police officers were taking this dispensary down. Who knows? But am almost positive that they aren’t supposed to be partaking of the merchandise, particularly on the job.
This folks, is your war on drugs.
Charles Hugh Smith examines this important but often neglected question. Really, who does benefit from a bust?
Charles Hugh-Smith writes of the dimming of the “Chinese Dream.” Introducing the “Ant Tribe.”
Did I say wind down? No I meant expand! —The President comes up with a new scheme for bailing out underwater real estate investors and Wall Street firms stuck with “toxic assets.”