Monday, July 29, 2013

On the Ground Report on the Phony Centrally Planned "Growth' in China

As I have pointed out before, China's economy is a mixed bag There are pockets of free market activity, but there are also massive centrally planned wasteful projects that boost the economic "growth" numbers of China, but in fact are just poorly constructed ghost cities. These government directed projects have been funded by massive money printing by China's central bank, The People's Bank of China.

The PBOC of late has slowed the money printing because of fears of hyper-inflation. This slowdown is setting the stage for a potential massive stock market and economic crash in the country.

EPJ reader Andre G is just back from a visit to China and emails:
Regarding your outlook on China; I was spooked to see it with my own eyes. After the amazing experience of walking into a huge and modern train station and getting on an incredibly smooth 150-mph train it was palpably noticeable in the landscapes we were breezing by. In the 35-minute train-ride from Beijing to Tianjin in between large plantation-plots stood humongous development projects with towering cranes as far as the eye can see. In the 35 minute train ride we passed by hundreds of cranes; one development project I literally counted 25 cranes alone. It was in the finished developments where things looked scary: huge brand new roads and highways, huge brand new parking lots, huge brand new residential towers... and not a soul in site. It was as if there was a plague where everyone perished and I was witness to the aftermath.

Andre also writes about government internet monitoring in China:
It was spooky that on every wifi I encountered in China I had to put my cell number to access it. Even at the Beijing Int'l Airport, I had to scan my passport in a machine to get a wifi password.

But at least in China you know you are being monitored!

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