The fact that so many bright minds — and supposedly contrarian thinkers — like Jim Rogers and Marc Faber believe that China is the new eldorado and that Central Planners will manage the 1.x billion people country into becoming the next great power is just puzzling me.
China actually reminds me of Japan in the late 1989, when everybody thought that it would take over the world. It was actually the top of the countries "supremacy", and their economy has been in a severe depression since precisely that moment.
China will very probably follow the same path. If nonetheless you are interested in some sensible comments about what happened, I recommend you read the following posts from Mish:
- China Warns Against Finger-Pointing; Obama Points Finger Anyway; Obama's Budget Reduction Lies
- China Plays Obama like Violin on Yuan Exchange Rate
- Yuan Climbs Most in 20 Months - a "Whopping" .37 Percent; Are we Supposed to be Impressed?
Thanks blbl for keeping me to date and forwarding me news pieces while I was away.
2 comments:
Central planning never works.
I think because by it's nature it invites massive cronyism, which is always results in massive misallocation of capital. Add that to central planning's natural tendency to misallocate capital (you're never as careful with OPM as they would have been), and you get double misallocation!
No - it never works. The only problem is that, like "stimulus" which is never "big enough". The socialists will tell you that "proper central planning has never been tried". (sigh)
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