Update: I just checked my email, I didn’t realize I would have to approve comments. They’re approved.
I think.
Now, back to your regularly scheduled post.
Anybody who doesn’t realize that commies lie about their Glorious Nation has not been paying attention to commies.
Case in point, commie China.
(from a linked article at that link)
We’ve tracked down satellite photos of these unnerving places, based on a report from Forensic Asia Limited. They call it a clear sign of a bubble: “There’s city after city full of empty streets and vast government buildings, some in the most inhospitable locations. It is the modern equivalent of building pyramids. With 20 new cities being built every year, we hope to be able to expand our list going forward.”
They’re building 20 new cities a year and have no need for them. Huge cities with maybe a dozen cars parked in the gigantic gov’t office building and no cars or foot traffic anywhere else.
It’s Keynes mixed with communism. Two shitty ideas that go shitty together.
Click the links, there are links to more data.
The Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011.
My buddy’s friend works for a company putting up factories in China. We discussed it and my point was that it might be worth it short term, but you can’t work with commies long term. He disagreed.
I asked him about suddenly increasing “fees” for doing business, “Sure they do that once in a while, but it’s no big deal.”
There will come a time, probably relatively soon, when his company will lose all their investments in China.
Nobody saw the fall of the USSR, nobody. One day we woke up and the world had turned upside down and nobody, but nobody had seen it coming. And back then, very few companies had much investment inside the USSR so their fall didn’t affect us all that much economically.
Now? Many manufacturers went for the allure of cheap commie slave labor.
China is trying to use a billion serfs to keep a hundred million living at about a 1950s US standard of living and it’s going to come crashing down and it’s going to be much uglier than the fall of the Russian empire.
Another side effect will be that a lot of people who trusted commies are going to be screwed.
Unfortunately, that group includes the US gov’t.
I forget where I saw this, sorry.
doubleplusundead 
I think dismissing China as ‘communist’ is a mistake. Let’s face it, no country (with the possible exception of Cuba) has ever been even close to truly communist — it’s merely a convenient label for ‘governments I don’t like’. I think it’s more accurate to consider them ‘authoritarian’. Likewise, considering the US a capitalistic democracy is a mistake (we’re really an oligarchy at this point). It’s hard to do accurate analysis if you start with inaccurate, and politically loaded, terms.
Because of their mercantilist currency peg to the dollar, China has made our problems their problems as well. Namely, they’re awash in increasingly worthless currency and have imported rather large amounts of inflation. The authoritarian response has been to spend heavily on infrastructure and hard assets, whether or not it’s currently needed or even remotely affordable for the masses. In many respects, this is far better than US policy as we’re buying crapola with our garbage dollars. China is a net producer while the US is a net consumer — that alone is a major point in China’s favor.
That’s not to say that China’s current path is sustainable — it’s clearly not. I think what their leadership is attempting to do is get rid of as many of their dollars (US Treasuries mostly) as possible before raising interest rates and revaluing / depegging the Yuan. It’s extremely hard to guess what they might do, however, as the numbers coming out of their government, and their economic posturing, are little more than propaganda (our government’s numbers are no better at this point).
Anyway, I think dismissing China as merely an accident waiting to happen is a mistake. Yes, they have major economic issues, but in many ways they’re positioned far better than we are. Some very smart people (like Jim Rogers) are invested for a continued fall of the West and continued rise of the East. Not to say that it will be a smooth course for them as they obviously have a shitload of issues through which to struggle, but unless the US makes a major course change (not at all likely) I think going with China over the US in the long term is the smart bet.
My greater concern is what the ChiComs are going to do with the massive build-up in military hardware they have invested in for the last 15 years. Their construction of submarines alone is astounding.
If they wanted to get serious about retaking Taiwan and were worried about our carrier groups, the sub investment would make a lot of sense, yes?
Our subs are a greater threat to any invasion fleet.
Oh, there’s no doubt that our military tech is still easily the best in the world. R&D is something we still excel at, particularly military. But for a nation looking for more regional autonomy, a sub investment is a good way to go. When it comes to Taiwan, China has logistical proximity on their side in a big way.
I think going with China over the US in the long term is the smart bet.
Yeah, I remember people saying that about the USSR too.
They’re commies, you can say “mercantilist”, but that’s limited. They’re commies.
And I don’t mean, “Pure Marxist” communism, nobody has ever managed that.
Commie countries are dictatorships with an oligarchy who spew “equality” BS as they trod their boots on the populace.
Just like Russia.
Their other defining characteristic is that they can’t admit error. That makes errors compound as everybody ignores them.
Watch Pork Chop Hill, the general “negotiating” the peace with the Norks says something like, “They’re not just Orientals, they’re commies”.
Now, China is a special case. They’ve always had brutal dictators. Always. As they say, “The next to sit on the Dragon Throne will do so with bloody hands”.
What we have here is a bunch of commies who are pretending their country isn’t an economic basketcase.
Just like the USSR.
Remember the rope they were going to sell us to hang us with? They ran out of rope long before we ran out of money to buy it with.
China is hiding their real economy (Like, you know, building 20 cities a year for Casper and friends) and sooner or later it’s going to come crashing down.
When they have a serious economic downturn, they’re going to be in real trouble.
The hundred million aren’t going to be happy going back to a commie hellhole and the billion are going to be pissed off about going back to the 3rd century (BC).
And their other problem is that they have so many unmmaried males because they’ve been aborting their worthless women babies.
That’s a long term problem for their neighbors and a short-term problem for themselves.
Betting on commies over free nations isn’t a good bet.
Look at NoKo and SoKo. In the 50s, the north was the more industrialized area. Now? It’s a commie hellhole where grass soup flavored with your neighbors’ dead relatives is what’s on the menu.
China and the late, unlamented USSR aren’t even remotely comparable. This is why using inaccurate labels like ‘commie’ is a huge mistake. Their regime can be brutal, and I wouldn’t want to live there, but trying to paint China with the USSR or NoKo brush is just plain wrong.
Yes, they have ghost cities. So do we, although ours tend to be a lot older and completely trashed. Yes, they’re going to be in for some major economic pain, but it won’t be anything like the fall of the USSR. It will be much more similar to what we’re going through now. In terms of production and hard assets, they’re less of an economic basket case than we are. Their average standard of living is still much, much lower, but we have about a 50 year head start on them in that regard.
I do agree that their excess male population is their single biggest issue, which is indeed a concern for their neighbors. If I had to guess how that would resolve it would be through a takeover of North Korea, but that’s just a wild-assed guess. God only knows how they’re going to try to deal with that. It won’t be pretty no matter what.
I also agree that ‘betting on commies over free nations isn’t a good bet’. But, China is only partially a command economy, and we’re no longer a capitalistic society. I’m no fan of China, and if the US returns to being a capitalistic democracy, we will kick their ass in the long run. But look at some of the sentences you wrote, as they apply quite well to our own government:
Commie countries are dictatorships with an oligarchy who spew “equality” BS as they trod their boots on the populace. This is exactly where we’re rapidly headed, minus the dictatorship thingy (although we do have a Zaphod Beeblebrox presidency).
Their other defining characteristic is that they can’t admit error. That makes errors compound as everybody ignores them. In spades here.
China is hiding their real economy … and sooner or later it’s going to come crashing down. Again, in spades in the US.
Anyway, there is a huge disconnect between the view of China in the political blogosphere and the financial blogosphere. Believe it or not, I’m pretty moderate when it comes to my opinion on China’s likely future path — many in the financial world are much more optimistic than I. Also note that the financial world wasn’t nearly as sanguine about the USSR back in the day. All the involvement there was strictly cynical and based on equity and resource extraction — I don’t recall anyone thinking that situation was remotely sustainable.
No offense Veesh, but I think you should reevaluate your basic assumptions about China.
Their “phantom” villages are pre-built empty, ours are as our economy changes so does where stuff is done. They’re spending money to look good, we spent money to build industry.
You can’t compare the too.
Again, in spades in the US.
That’s kind of silly to compare too.
They hide their numbers as a function of their gov’t, they’ve been doing it for decades.
We can’t hide our numbers the same way.
The excess males are going to screw up their country as they get pissed off. When Keynes and Marx fail, they’re going to have a shitload of unemployed, ungettinglaid, pissed of young males.
They’re going to have to invade someone to get them occupied, but first there’s going to be internal strife.
A weak state can’t handle that very well.
Also note that the financial world wasn’t nearly as sanguine about the USSR back in the day.
Bzzzzzzt! Wrong answer, Johnny tell him about his parting gifts.
I remember. I also remember the stunned “experts” who had no idea they were that close to collapse after years spent lambasting Ronnie Raygun.
They’re commies. They have to lie even as their world comes crashing down.
I also remember the stunned “experts” who had no idea they were that close to collapse after years spent lambasting Ronnie Raygun.
You’re referring to political experts, I’m referring to financial ones. Totally different. Of course the lefties were all wrong about the USSR and Reagan’s approach. The financial world, not so much.
Anyway, in regard to China, we’re just going to have to wait and see how everything plays out. I’m fully prepared to be wrong. Hell, I’ve traded, so I’ve been wrong a hell of a lot and am used to it. Unfortunately, I’m old enough that when dealing with long-term economics, I’m likely to be long dead before any wager could be settled.
I do agree that their excess male population is their single biggest issue
Nah. Their bigger problem is demographics: they’re rapidly aging. Their economy has passed its economic nadir.
Of course, this is the foreseeable result of the one child policy …like the imbalance of the m-to-f ratio was a spin-off of Asian cultural sensibilities was equally foreseeable …but the what-why-where-who don’t matter, really. Demography is all that matters in the end./pun
As will be obvious post a moment’s reflection, government enforced ponzi schemes are simply not sustainable when you have a falling “working class” population (well, when your ratio of old to young makes it “just that obvious”). Period.
It’s all about the numbers. Always.
(Yes, of course this is a familiar meme: I’m a Mark Steyn fanboy. I preferred Cassandra in Greek mythology too, btw.)
Steyn: It’s the demography stupid, etc. …money quote (v. hard to choose, YMMV, but I’d say it was this)
China: Demography Implications …money quote
…yeah, if you see another comment that looks suspiciously like this at some point, it was because I was being “moderated”.
Oh, and I edited this a bit too.
Another difference in the China does not equal USSR comparison is that USSR did not have access to modern technology. China doesn’t have that handicap.
One way to think about it is that USA & Europe didn’t stop building their manufacturing base, we just have been building it in China.
Consider the economy problem that we face when making a light bulb (basically air inside a solid balloon) in China, shipping it across the ocean, unloading it from boat & container & shiping it to the retail store is significantly less expensive (& easier, less gov’t interference) then it is to make it here & ship it by truck.
I do agree that their excess male population is their single biggest issue
Nah. Their bigger problem is demographics: they’re rapidly aging. Their economy has past its economic nadir.
(Of course, this is the foreseeable result of the one child policy …like the imbalance of the m-to-f ratio was a spin-off of Asian cultural sensibilities …but what-why-where-who don’t matter, really. Demography is all that matters in the end./pun)
As will be obvious post a moment’s reflection, government enforced ponzi schemes are simply not sustainable when you have a falling population (well, when your ratio of old to young makes it “just that obvious”). Period.
It’s always all about the numbers.
(Yes, of course this is a familiar meme: I’m a Mark Steyn fanboy. I preferred Cassandra in Greek mythology, too btw.)
Steyn: It’s the demography stupid, etc. …money quote (v. hard to choose, YMMV, but I’d say it was this)
China: Demography Implications …money quote
past=passed.
…someday I’ll completely proof-read a comment prior to posting.
……nah!
Okay. I have another “your comment is awaiting moderation” error. Which has meant, in the past (correct usage this time), that while I can see that I posted something, no one else, apparently sees it. You’ll just have to trust me that its there, and past=passed makes good sense.
Am the only person who gets these?
I got one once … something you typed hit the filter it would seem. Someone will take it out of moderation shortly, I’m sure.
Thanks …this is the 3rd or 4th.
Uh: we have a filter? Srsly?
screw it …I tried again (changed the links), but was again thrown into moderation. I give.
http://www.city-journal.org/2010/20_4_asian-megacities.html
Quote
The tactic has yet to succeed: Hong Kong remains more attractive, though less because of its impressive buildings (Shanghai’s can compete in height, if not in architectural quality) than because of its commitment to the rule of law.
…To protect Shanghai’s gleaming appearance further, the government also keeps tight control over the population. Officials view the peasant migrants who work menial jobs in Shanghai as a stain on the Western-oriented city and prevent them from living there or sending their children to local schools. …
All other migrants who work in Shanghai, though, must return by night to the shantytowns or shoddy workers’ dormitories at the city’s periphery, far from the cosmopolitan city center.
A quote that Clau-clau-claudius attributes to the young Herod is that when you’re broke, you spend you last money on looking good and then you can get credit more easily.
China spends a lot to look like a 1st world country, they’re not. They’re a 3rd world country (the billion) supporting a 2nd (the hundred million).
Add in the corruption, the non-rule-of-law and the constant lying about anything bad, and you have an unsustainable trajectory.
I meant to say the Clau-clau-claudius quote was from the book I Claudius.