The Myth of Market Manipulation

[kyjlong]

Palouser,

My guess it was probably many reasons.

First it makes a better story to have a one that implies that someone is worse than we are.

There is always the possibility that they didn't do the research.

Or they may have looked around and didn't understand what was really going on.

[Palouser]

Intense central planning - like China's - isn't compatible with a democracy. But there is no doubt that central planning by a ruling class doesn't have to worry about drawn out debates and satifying competing interests. Most authoritarian governments are too ideological and corrupt to be effective planners - or they trash the economy and drain any wealth away in a buddy system. China seems to have absorberd the reality that developing a modern economy must benefit all citizens to some degree to avoid being swept away in uprisings. The idea that they are going to knit th country together with 80 super trains is a staggering concept. They are using this investment opportunity to develop entire systems from scratch rather than cobble together old stuff.  They are leap frogging entire technologies. I'm not sure that a society has ever leapt out of a 'dark ages' to this extent.  They still have extensive problems and issues, but I think it's a grave mistake to think this is all a facade.

[SD Wild/OBG]

That's a great point Hardnox.

I've heard commodity bulls bash the dollar because we are becoming a command n control eeconomy. In the next breath they brag up China's system.

I read that newlyweds making$ 6,000/yr are paying $400/sq ft for apts. According to Austrian School, this bubble will pop the second their central bank slows inflation.

Just as American 20th century living standards improved IN SPITE of govt intervention (not because of it)... Chinese do better in spite of their government's folly. They were simply supressed THAT much for so long. I reckon their magic ran its course though?

Keynesianism never works, and that's China's modus operendi.

Here's my market prediction fwiw.... if the Chinese real estate bubble doesn't pop first, then global oil inventory will get pressured by next summer/fall. A serious bull market in oil, doubling the price in a year, is certain to do waht it always does... create deflation.

Then we play" kick the can" again, Lather, Rinse; repeat. Ultimately prosperity = distant memory.

[SD Wild/OBG]

I meant Chinese newlyweds makin $6,000/yr are buying over-priced apts.

I also meant that Chinese economy grew in spite of govt insanity simply because they had no where to go but up after Mao's influence waned... no matter how much keynesianism they applied.

Just a thought...

[r3020]

OBG, there simply have to be some regulations, no matter how much I hate them. If not a few of the world's wealthiest could buy everything. For capitalism to work there has to be

1)  A rule of law.

2) An entity to ensure that ALL recieve equal treatment under that rule.

3) It has to be practiced with some morality

4) The chance to succeed beyond your wildest imagination.

5) The chance of utter failure.

When you remove any of those 5 you no longer have capitalism.

[SD Wild/OBG]

Hmmm..... here's some food for thought R3020;

1) Caveat Emptor was a wonderful system compared to modern day regulation. Without Fannie/Freddie watchin out for the little guy, the little guy wouldn't be stuck remaining little. The FDA replaced caveat emptor. That's too bad, because today we have drug companies bringing about 5% of the innovation to the marketplace that they otherwise would. How many people died due to loss of innovation? How long would a drug company last selling tapeworm eggs as diet pills? The market naturally solves these problems.

2) Lassaiz-Faire is the uber riches worst nightmare, because with that system, there is no safety net for wild shenanigans. Eventually even Warren Buffets and Bill Gates (or their children) slip up and return to lower rung in time, changing places over and over with lower class like a rotating door. Its regulation that insulates the wealthy from market forces. Think bailouts, tariffs, and USDA meat inspectors....

3) triple A mortgage backed securities debacle is predictable outcome when you have. The false sense of security that comes with Uncle Sam's oversight.

I agree with most of your post.

[r3020]

All 3 points go against rule #5. Without some type of limits there are oil sheiks who could, and would, buy every bushel of grain we raise for a year and dump it into the ocean. Rules are the worse thing in the world except a world with no rules. I'm with you 100% on limited rules, that is wear morality comes in. Without morality we are no different than animals, survival of the fittest. Since there are always to be those with no morals among us we have to do the next best thing. LIMITED rules. Yeah, it sticks in my throat too. That's why beer was invented.

[nwobcw]

The problem as I see it is that one can never be certain of the accuracy of any Chinese news.  The talking heads on business news disagree.  It's  scary to base future plans on sketchy unreliable news. 

[SD Wild/OBG]

R3020, what limits exist today which prevents oil sheiks from buyin grain n dumping it in ocean?

NWOBCW, it is scary! Not knowing which currency

[SD Wild/OBG]

..... which currency blow-up lurks around the next corner. Trash is building up in Italy because they can't afford to haul it out and people riot when govt takes away welfare. On this side of the pond we have old people voting for social security ponzi scheme every time they get a chance. Competitive currency devaluation makes plans for future a crap shoot.