The writer has incredible respect for the CCP, but even they have not got a forest of money trees, and they also have no free lunch, and MMT is not going to work for them better than for the West.
Much of that building was on speck apartments which the fanatical saving citizens bought at extreme cost as pure investment, and so it is something which reaches to the very core of the nation.
Remember, Japan was brought down by real Estate. It was projected Japan would overtake USA as the greatest GDP in the world, till their housing bubble burst in 1992 – AND the Nikkie lost half its value, AND still is not back to that lever thirty years later.
Never count out real estate’s ability to destroy an economy, like the GFC. In fact looking at Western real estate appreciation during the mad cvid response money printing, I rather expect it to correct 30%, and shake things to the core, if/when interest rates rise, the real estate is value is toast. (That the stock market is likely to correct 30-80% as well, is scary.)
“ and MMT is not going to work for them better than for the West.”
That was my thought too when I read the article. I don’t see how any country that’s engaged in international trade and has an internationally traded currency can print unlimited amounts of money without risking inflation. But I’m not an economist.
At any rate, it’s good to see more economic articles on Unherd even if they’re just mini articles.
To not be centered on economics at this time is like not talking of Germany in 1932 as the world teeters on the edge of a knife.
People need to be making choices. Not that I have been able, being a doomsday thinker on this I have cash and gold/silver but too afraid of equities and bonds to join in on the huge appreciations – and am just sitting frozen like a rabbit in the headlights….
Christopher Barclay
2 years ago
” … something that is not hard to do if the state can use the central bank to simply create cash.” And this hasn’t been tried in the West?
Yes, but few think it is going to work out well. We are not Japan in 1992, where they had the huge Realeastate/Equity correction – because they had a very large Export surpluse, so nothing like us. China will be greatly aided by this – but Japan lost 30 years of economic growth from it.
The coming CBDC is to enable Central Banks to just create money and send it out to Non-Bank entities as cash without having to create debt through Bonds and Treasuries and reserves – just add numbers on the computer to bank accounts directly. It will be disasterious. Totaltarian, and also making us all poor and dependent and under 100% surveillance. China already has its Digital Yuan out and can get the MMT going. (CBDC)
I’m not persuaded by those people who seem to believe in some sort of capitalist prelapsarian innocence in the West, but oppose any more innovation in how the state interacts with the market. Limited companies, what, you mean institutions whose directors can walk away from their liabilities? But it worked, in a pragmatic way to grow economies. The UK has been in debt now since Napoleonic times, at one time that would have been considered complete anathema.
Nick Faulks
2 years ago
Just like the UK, then. The Government takes over the “bad banks” and fills the hole by printing money. Should be fine.
At least in China many of the people who have profited by bringing about the crisis will have to give back their ill-gotten loot – or worse!
And when their ‘Bezos’ and ‘Gates, Zukerbergs’ get too big they just disappear them….
The Chinese CCP will NOT relinquish their monopoly on money/power. In the West we have just handed the reigns of power to the tech, finance, Military Industrial, Pharma Industrial, MSM Industrial, Social Media Industrial, the Corporatists, and the Global Elites.
Giles Chance
2 years ago
If inflation in the US and Europe does not go back down to 1% or 2%, interest rates will have to rise by several %. There will be a global financial crash because many households won’t be able to pay their mortgages and stock markets will plummet. China will be in a better place to deal with this because, as the article says, the Government controls the central bank and the banking system, the country has huge savings, and China, the world’s largest exporter, runs a huge trade surplus which generates large inflows of foreign currency. .
Cheryl Jones
2 years ago
I fail to see why a Chinese company failing should be an issue for the rest of the world. If it is then it just demonstrates further to me that globalisation is a truly terrible idea.
The writer has incredible respect for the CCP, but even they have not got a forest of money trees, and they also have no free lunch, and MMT is not going to work for them better than for the West.
Much of that building was on speck apartments which the fanatical saving citizens bought at extreme cost as pure investment, and so it is something which reaches to the very core of the nation.
Remember, Japan was brought down by real Estate. It was projected Japan would overtake USA as the greatest GDP in the world, till their housing bubble burst in 1992 – AND the Nikkie lost half its value, AND still is not back to that lever thirty years later.
Never count out real estate’s ability to destroy an economy, like the GFC. In fact looking at Western real estate appreciation during the mad cvid response money printing, I rather expect it to correct 30%, and shake things to the core, if/when interest rates rise, the real estate is value is toast. (That the stock market is likely to correct 30-80% as well, is scary.)
“ and MMT is not going to work for them better than for the West.”
That was my thought too when I read the article. I don’t see how any country that’s engaged in international trade and has an internationally traded currency can print unlimited amounts of money without risking inflation. But I’m not an economist.
At any rate, it’s good to see more economic articles on Unherd even if they’re just mini articles.
To not be centered on economics at this time is like not talking of Germany in 1932 as the world teeters on the edge of a knife.
People need to be making choices. Not that I have been able, being a doomsday thinker on this I have cash and gold/silver but too afraid of equities and bonds to join in on the huge appreciations – and am just sitting frozen like a rabbit in the headlights….
” … something that is not hard to do if the state can use the central bank to simply create cash.” And this hasn’t been tried in the West?
“And this hasn’t been tried in the West?”
Yes, but few think it is going to work out well. We are not Japan in 1992, where they had the huge Realeastate/Equity correction – because they had a very large Export surpluse, so nothing like us. China will be greatly aided by this – but Japan lost 30 years of economic growth from it.
The coming CBDC is to enable Central Banks to just create money and send it out to Non-Bank entities as cash without having to create debt through Bonds and Treasuries and reserves – just add numbers on the computer to bank accounts directly. It will be disasterious. Totaltarian, and also making us all poor and dependent and under 100% surveillance. China already has its Digital Yuan out and can get the MMT going. (CBDC)
I’m not persuaded by those people who seem to believe in some sort of capitalist prelapsarian innocence in the West, but oppose any more innovation in how the state interacts with the market. Limited companies, what, you mean institutions whose directors can walk away from their liabilities? But it worked, in a pragmatic way to grow economies. The UK has been in debt now since Napoleonic times, at one time that would have been considered complete anathema.
Just like the UK, then. The Government takes over the “bad banks” and fills the hole by printing money. Should be fine.
At least in China many of the people who have profited by bringing about the crisis will have to give back their ill-gotten loot – or worse!
And when their ‘Bezos’ and ‘Gates, Zukerbergs’ get too big they just disappear them….
The Chinese CCP will NOT relinquish their monopoly on money/power. In the West we have just handed the reigns of power to the tech, finance, Military Industrial, Pharma Industrial, MSM Industrial, Social Media Industrial, the Corporatists, and the Global Elites.
If inflation in the US and Europe does not go back down to 1% or 2%, interest rates will have to rise by several %. There will be a global financial crash because many households won’t be able to pay their mortgages and stock markets will plummet. China will be in a better place to deal with this because, as the article says, the Government controls the central bank and the banking system, the country has huge savings, and China, the world’s largest exporter, runs a huge trade surplus which generates large inflows of foreign currency. .
I fail to see why a Chinese company failing should be an issue for the rest of the world. If it is then it just demonstrates further to me that globalisation is a truly terrible idea.