Indeed it is. Central planning always fails and make no mistake in many ways our economic system is “planned.” Not in the sense that it was planned in the Soviet Union but planned and controlled by the Federal Reserve through the manipulation of interest rates. The Fed creates malinvestment by trying to juice the economy. People over invest with cheap credit on office buildings, homes, cars, infrastructure projects and so on. Then when the reality of the economy hits this juiced economic situation failure occurs broadly.
China continues to shudder and it appears to be increasingly fearful. With the Saudis rattling their debt sabers, Europe looking at another summer of crisis (of various kinds), and just a general sense of instability in world economy and geopolitics, China hopes that the Fed will take the Red Dragon “into consideration.”
There is no doubt that China will be and is considered as Minister Zhu knows very well.
I’d love to know what the minister knows about the real Chinese economy.
Uh oh. Here comes the Federal Reserve to “save” us.
(From David Stockman’s Contra Corner)
If you don’t think the current central bank driven economic and financial bubble is going to end badly, recall a crucial historical fact. To wit, the worldwide race of central banks to the zero bound and NIRP and their $10 trillion bond-buying spree during the last seven years was the brain child of Ben S Bernanke.
He’s the one who falsely insisted that Great Depression 2.0 was just around the corner in September 2008.
If you are “resisting capitalism” you are “resisting human progress.” You are resisting the voluntary exchange of goods and services. You are resisting opportunity for people to make a better life for themselves through hard work. You are trading that opportunity for a system which rewards the uncreative and unambitious. (And perhaps you understand this.) You are fundamentally resisting FREEDOM and LIBERTY, because “economic liberty,” the right to do what you want with that which you own, is not separate from social FREEDOM and LIBERTY.
(The was a post on Facebook from Lawrence Reed at FEE)
April 5 is yet another “day that will live in infamy.” On this date in 1933, Franklin Roosevelt signed Executive Order 6102, which criminalized the possession of monetary gold. Americans were ordered to hand over their gold coin and bullion to the government in less than a month (by May 1) under penalty of $10,000 fine and/or up to 10 years in prison, so that the government could more easily inflate the money supply.
We are slipping into an economic Twilight Zone. Across the globe, in different countries, the poles are shifting along with banking math. Negative rates of interest are creeping over the planet.
Negative rates will encourage debtors while robbing what is left from savers at an accelerated rate. It is foolishness. It is unwise. Negative rates will extend the malaise (malaise is a nice way of putting it) that the world seems unable to shake even 8 years on from 2008.
Dead on point.
Without knowing the specifics it is probably pretty safe to say that laying off 5-6 million state workers in China, the Ultimate Cony Capitalist State is probably necessary. Saying that, one has to consider the disruption to these people’s lives and what that might mean politically. Even in a country of 1.3 billion people 5-6 million workers is a pretty big chunk. What do these people do? Presumably many bought living quarters in the great Chinese property bubble.
The USA IS an exceptional country. We are SUPPOSED to be different from the rest of the world. This is SUPPOSED to be a place where the citizenry is respected. Some people, powerful people, have forgotten this. They should be reminded.
One of the reasons there is so much unease in the country (and in the world) is because everyday people feel completely marginalized by the powers that be. There is a sense that everyday people are now just observers,
A reminder from Lew Rockwell of the true nature of the state. The government facilitates cronyism, it doesn’t listen to you, it takes your money for itself and its crony allies, it wages wars which need not be waged, it is not – you and me. It serves its own purposes first. We are at best second thoughts. (We are actually thought of quite a bit, but primarily as nuisances.)
We have no horse in the presidential race as we often say but we sure have an issue with Government Sachs, the bank which long ago should have died but was saved by virtue of its connections in government. (Not the only bank.) The bank then, post-2008 went on to expand further around the world all fresh and “recapitalized.” (Recapitalized with your money.)
For the record, we have been calling this for a good while now. We warned of slowing in the Ultimate Crony Capitalist State, China. We warned that the great neo-Keynesian experiment was destined for an ugly end (and we are by no means the only ones who said this).
Is this THE turn? It looks increasingly so but the next few months will show us for sure. Will it be worse than 2008?
The petrodollar system is an area of particular interest to me and it has been for a very long time. I am fascinated by the secrecy which surrounds the system, the massive political implications of the system, why it was created in the first place, and why it plays, I believe anyway, an important roll in monetary policy. (Though some disagree with me.)
I even wrote 3/4 of a reasonably good novel focused on the petrodollar.