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Veteran Advisor

Re: The Myth of Market Manipulation

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Senior Contributor

Re: The Myth of Market Manipulation

I'm definitely not arguing that command and control economies aren't prone to any and all problems associated with growth or priorities. On the other hand, China has a strong and growing trading and manufacturing base to build on, and is investing in technologies and infrastructure with real payoffs. Inflation is a huge issue, but there is no doubt standards of living are improving on a wide scale. In addition, it appears China pays attention to our mistakes and has added more regulation and raised interest rates incrementally to keep the economy from blowing off.

 

China may still make the fatal mistake and have a recession, but they are the low cost producer and early adopter, given where they have come from. A recession might cause pain, but improve their advantages globally in the medium to long run. A recession in a surplus economy is different than a recession in a debter economy.

 

 

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Senior Contributor

Re: The Myth of Market Manipulation

After visiting the recommended site and looking around i think I understand your intensely ideological approach. Nuff said.

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Senior Contributor

Re: The Myth of Market Manipulation

obg, every one is an idealogue except palouser. i am with you. d7

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Frequent Contributor

Re: The Myth of Market Manipulation

For anybody not completely close minded, below is a wonderful article explaining the economic times we live in. It explains precisely this system in which banks are isolated from market forces, and where regulators takeover the role of the Invisible Hand.

This article below on the subject of bank runs and the" Kick the Can" system of outlawing them was written by the most respected economist of the 20th century. Its done in a style the layman can pick up with ease.

http://www.lewrockwell.com/rothbard/rothbard163.ht ml

If you believe like myself that understanding monetary mischief is the most valuable knowledge you can employ on your farming career, then take 5 minutes to read it.

On the other hand, if you are an idealogue, putting all your hopes on socialism, you will probably ignore it at your own peril.
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Frequent Contributor

Re: The Myth of Market Manipulation

Whoops! That link want post correctly. Here it is below, it was written in 1985, but explains how the economic mess came to be. In 5 minutes you will understand 5 years of college econ classes;

http://www.lewrockwell.com/rothbard/rothbard163.html
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Veteran Advisor

Re: The Myth of Market Manipulation

http://globaleconomicanalysis.blogspot.com/2010/10/misguided-love-affair-with-china-chinas.html

 

I'm not completely taken with Shedlock but he does often have some good stuff. See the link above- nearly 50% rise in broad money supply in China in the past 2 yrs?

 

I'm reminded that the age of bubbles in the US basically coincided with ZIRP in Japan as the yen carry trade fed everything. I'm wondering if we're not seeing something somewhat similar with China/US where our trade deficit and ZIRP is creating a huge bubble there.

 

Below, Steve Saville with some related observations.

 

 

http://www.321gold.com/editorials/saville/saville102610.html

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Senior Contributor

Re: The Myth of Market Manipulation

I would not discount the possibilities of bubbles in China. But the government there is interested in slowing down activity w/o slowing down the economy over all. I think that one also has to remember that Chinese citizens are probably highly aware of our recent problems.

 

Another issue is the value of real infrastructure and economic development compared to the money supply - and the fact they are a wildly net exporter. If money expansion was purely attributable to inflated prices, or fraudulent practices going unnoticed, like our securitized mortgage dirivitives and CDS, then it would be easy to rationalize immediately dangerous bubbles. But I think Chuina is getting a return on their money, and laying the groundwork for further expansion as they develop and adopt new technolgies that make them even more efficient.

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Veteran Contributor

Re: The Myth of Market Manipulation

Non- traded commods are dull, usually dealt via long term contracts and oft a small % of the world economy.

Nut-case specs are a crop to be harvested.

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