So much production in industries like steel is based on demand for more production, but should that demand falter, the whole system could come crashing down...
Consider crude steel production, a test-tube example of how command economies get it wrong. In the mainland this stood in June (2017) at an all time monthly record of 73 million tonnes, five times the total production in all of Europe.
Why is so much steel needed? ...to build more steel mills ...to build more shipyards, ...so that more ships can be built to carry more iron ore, ...to build more shipyards...
What we have here, in short, is a giant Ponzi scheme. In a Ponzi scheme you pay out the winnings of the first entrants with what others later pay into it. As long as it keeps growing everything is fine. When it stops growing it collapses...
Command systems may be good at deciding where to direct economic effort in wartime but they are hopeless in peacetime at deciding when to stop... what you get is economic cancer, uncontrollable growth.
You don’t see it right away. Any Ponzi scheme looks just fine as long as more people can be found to put their money in. But the end is inevitable and the longer it is delayed the more resounding the collapse.
It has so long been delayed in the mainland that, when the end finally comes, I believe more than half of the loans and advances of the financial system will prove irrecoverable...
When will it happen?
I cannot tell you. No one has ever conducted so big a Ponzi scheme from so high a level of authority before.
(Excerpt) Read more at scmp.com ...
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Note that this article is two years old - but it looks like the theory is about to be tested.
At some point, the fraudulent house of cards that is the communist Chinese economy, is going to collapse.
The President is doing GOD'S work, by getting Americans to line up substitute suppliers before a collapse over there catches us flat-footed.
Consider crude steel production, a test-tube example of how command economies get it wrong. In the mainland this stood in June (2017) at an all time monthly record of 73 million tonnes, five times the total production in all of Europe.
Why is so much steel needed? ...to build more steel mills ...to build more shipyards, ...so that more ships can be built to carry more iron ore, ...to build more shipyards...
What we have here, in short, is a giant Ponzi scheme. In a Ponzi scheme you pay out the winnings of the first entrants with what others later pay into it. As long as it keeps growing everything is fine. When it stops growing it collapses...
Command systems may be good at deciding where to direct economic effort in wartime but they are hopeless in peacetime at deciding when to stop... what you get is economic cancer, uncontrollable growth.
You don’t see it right away. Any Ponzi scheme looks just fine as long as more people can be found to put their money in. But the end is inevitable and the longer it is delayed the more resounding the collapse.
It has so long been delayed in the mainland that, when the end finally comes, I believe more than half of the loans and advances of the financial system will prove irrecoverable...
When will it happen?
I cannot tell you. No one has ever conducted so big a Ponzi scheme from so high a level of authority before.
(Excerpt) Read more at scmp.com ...
------------
Note that this article is two years old - but it looks like the theory is about to be tested.
At some point, the fraudulent house of cards that is the communist Chinese economy, is going to collapse.
The President is doing GOD'S work, by getting Americans to line up substitute suppliers before a collapse over there catches us flat-footed.
