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Letters by a modern St. Ferdinand III about cults

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Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands.  Cults everywhere:  Corona, 'The Science' or Scientism, Islam, the State, the cult of Gender Fascism, Marxism, Darwin and Evolution, Globaloneywarming, Changing Climate, Abortion...

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Monday, August 24, 2015

More than 10 years debunking the China myth.

It never will be a superpower.

by StFerdIII


Keynesians and Marxists loved the Chinese 'miracle'. China's economic growth was impressive from the reforms of Deng Xiaoping in the 1980s until recently. China did open its pre-modern economy to capital and investment from the West. Some 300 million humans were taken out of grinding poverty into the real world. Copying technologies and processes from the West did create a thriving manufacturing sector premised on cheap labor. Finance and investments poured in. Lives became modernized.


Currently about 400 million Chinese have a Western middle class living standard or above. That was the easy part. The hard part is to keep such a rebirth alive within the confines and constraints of a totalitarian, one party state, in which government must micromanage all facets of the political-economy – mostly for their own pecuniary benefit of course.


The untold tale is that China has amassed some $30 Trillion in debts. It has $3.7 Trillion in reserves. Even New York Times editors can do the math. It is ugly. The state can leverage more debt and print more money – for a time. But at some point the ponzi scheme which is the nexus of China's Black Box comes crashing down. These facts offend Keynesians. It is clear that China is headed for contraction and perhaps even internal conflict. The great specter which haunts the Chinese elite is social unrest. They don't want to the return of yet another Mao. Chinese history however is replete with conflicts which seem to be generated every 100 years.


Some of us were not fooled, to wit, here are some postings dating back 10 years that I crafted on China:


August 2nd 2014, China's pending implosion is bad news for the world economy. Here


April 17th 2012, The myths around China and its growth. Here


November 12th 2011, China is going bankrupt with debt accumulation. Here.


May 11th 2008, We have seen this China before and it will collapse. Here


July 28th 2005, Why China's currency will eventually depreciate by a lot. Here


They Yuan was always over valued due to tight currency and investment flows [see April 12th 2012, here]. In order to 'save' its GDP growth the Chinese now need to loosen these restrictions and the result will be a huge depreciation in the Yuan which will destabilize trading and investment flows. This is always the case with a developing economy with a black-box set of statistics and controls. It was easy to predict.


The China myth was accepted in-toto by the Western world's elite, politicians and media. No one bothered to do any real analysis. Most financial and business 'experts', along with the political-media class, confidently asserted an endless rise of China's economic prowess, until it would displace the USA as the center of the world trade and its political-economy. These predictions now look entirely amatuerish and immature.


But we should not be surprised. When the 'consensus' is accepted as calibrated scientific fact, it is always, without exception, entirely wrong. The myth of China is just another example of that truism.




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