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China Faces Obstacles On Road To Consumer Society

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Yahoo/AP 30/1/14

'BEIJING (AP) -- Business should be picking up for Zhao Guoping, a Beijing shopkeeper, as Chinese leaders try to build a consumer society to replace a worn-out economic model based on trade and investment. But his financial struggle highlights the hurdles that ambitious effort faces. Squeezed by higher costs and weak sales to budget-minded shoppers, Zhao said the income from his neighborhood shop has fallen by half to 50,000 yuan ($6,000) a year.

"Prices are rocketing up. People's incomes can hardly catch up," said Zhao, 38. "Daily necessities, yes, I still have to buy them. But anything I don't necessarily need, then no."

The reluctance of Zhao and his customers to open their wallets wider is one of a thicket of obstacles facing communist leaders as they try to rebalance China's economy away from reliance on investment that is losing its ability to boost growth.

Combined with an export boom, a flood of spending on new factories, highways and other assets powered the past decade of explosive growth. That helped China rebound quickly from the 2008 global crisis. But it was paid for with a surge in borrowing that economists warn looks like debt booms in other developing countries that spiraled into financial crises.

As urgency for change mounts, so do potential hurdles. Consumer spending accounts for only about 35 percent of gross domestic product, well below neighboring India's 60 percent, and that percentage declined last year. Curbs on investment will mean less money flows to wages in construction and building materials industries such as steel and cement.

"It is a pretty narrow path that policymakers have to push the economy along," said Mark Williams, chief Asia economist for Capital Economics. "The risk is that if investment spending slows too much, then that starts to undermine consumer spending and you get a downward spiral."

Forecasts of this year's growth range from 7 to 8 percent, far ahead of the United States and Europe but down from China's double-digit rates of the past decade. Last year's 7.7 percent growth tied with 2012 for the weakest performance in two decades. And it hit that only after Beijing launched a mini-stimulus in mid-2013 with more spending on building new railways and other public works.

The impact of a government clampdown on lending and construction is showing in slower economic activity, raising the risk of politically difficult job losses.

A survey by HSBC Corp. found manufacturers cut jobs in January at their fastest rate in five years. Profits at China's biggest companies grew in December at their slowest rate in nine months. Growth in factory output and retail sales weakened, suggesting the quarter's headline growth of 7.7 percent might mask a deepening downturn.

Moves to encourage consumer spending are part of a marathon effort by the Communist Party to transform China from a low-wage factory into a high-income creator of technology with self-sustaining economic growth.

A broad-strokes plan issued by the party leadership in November promises to give entrepreneurs who generate most of China's new jobs and wealth more access to state-dominated industries.

Regulators announced this month they will allow the creation of five privately financed banks this year. Beijing has announced plans for a dozen new free-trade zones in Shanghai and other cities with promises of easier restrictions on business.

But such changes will take time to show results.

"Our expectation is that there isn't going to be any national-level substantive reform within 2014," said economist Brian Jackson of IHS Global Insight. "They're going to launch small experiments."

The biggest potential growth risk cited by many analysts: A rapid buildup of debt in China's government-owned banking system.

China's banks avoided mortgage-related turmoil that battered Western lenders but ramped up lending under orders from Beijing to help fend off the effects of the 2008 global slowdown.

The IMF and industry analysts warn they might be hit by a rise in defaults if toll roads and other projects approved in haste fail to earn enough.

The central bank says debt levels are manageable but economists say the speed of the increase is a warning sign. Outstanding bank loans have swelled by the equivalent of 70 percent of China's gross domestic product over the past five years. Analysts point to countries such as Thailand that have plunged into financial crises after seeing smaller debt increases of as little as 30 percent.

China "needs to contain the building of risks in the financial sector without excessively slowing growth," said the IMF chief economist, Olivier Blanchard, at a news conference this month. "This is always a very a delicate balancing act."

At the same time, Beijing's effort to clamp down on credit and tighten control over informal lending that support entrepreneurs has sent shock waves through financial markets. Markets in which banks lend to each other ran short of cash twice last year, causing interest rates to spike and fueling unease about the availability of credit.

"The uncertainty related to rate spikes and liquidity squeezes may affect business spending more broadly," said UBS economist Tao Wang in a report.

Wages in some areas such as the manufacturing-intensive southeast are forecast to rise this year by as much as 10 percent. But workers complain gains are eaten up by rising living costs — a bad sign for government hopes for higher consumer spending.

Lei Qiang, a logistics manager in Shanghai, said he and his wife have little left every month after paying for basics and save whatever they can. They plan to return to their hometown of Xi'an in western China with their 2-year-old daughter to escape Shanghai's high cost of living.

"Living in Shanghai for three years, my rent went up every year by 20 to 30 percent," said Lei, 38. "That was far more than my pay rose."'

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Yahoo/AP 30/1/14

'BEIJING (AP) -- Business should be picking up for Zhao Guoping, a Beijing shopkeeper, as Chinese leaders try to build a consumer society to replace a worn-out economic model based on trade and investment. But his financial struggle highlights the hurdles that ambitious effort faces. Squeezed by higher costs and weak sales to budget-minded shoppers, Zhao said the income from his neighborhood shop has fallen by half to 50,000 yuan ($6,000) a year.

"Prices are rocketing up. People's incomes can hardly catch up," said Zhao, 38. "Daily necessities, yes, I still have to buy them. But anything I don't necessarily need, then no."

The reluctance of Zhao and his customers to open their wallets wider is one of a thicket of obstacles facing communist leaders as they try to rebalance China's economy away from reliance on investment that is losing its ability to boost growth.

Combined with an export boom, a flood of spending on new factories, highways and other assets powered the past decade of explosive growth. That helped China rebound quickly from the 2008 global crisis. But it was paid for with a surge in borrowing that economists warn looks like debt booms in other developing countries that spiraled into financial crises.

As urgency for change mounts, so do potential hurdles. Consumer spending accounts for only about 35 percent of gross domestic product, well below neighboring India's 60 percent, and that percentage declined last year. Curbs on investment will mean less money flows to wages in construction and building materials industries such as steel and cement.

"It is a pretty narrow path that policymakers have to push the economy along," said Mark Williams, chief Asia economist for Capital Economics. "The risk is that if investment spending slows too much, then that starts to undermine consumer spending and you get a downward spiral."

Forecasts of this year's growth range from 7 to 8 percent, far ahead of the United States and Europe but down from China's double-digit rates of the past decade. Last year's 7.7 percent growth tied with 2012 for the weakest performance in two decades. And it hit that only after Beijing launched a mini-stimulus in mid-2013 with more spending on building new railways and other public works.

The impact of a government clampdown on lending and construction is showing in slower economic activity, raising the risk of politically difficult job losses.

A survey by HSBC Corp. found manufacturers cut jobs in January at their fastest rate in five years. Profits at China's biggest companies grew in December at their slowest rate in nine months. Growth in factory output and retail sales weakened, suggesting the quarter's headline growth of 7.7 percent might mask a deepening downturn.

Moves to encourage consumer spending are part of a marathon effort by the Communist Party to transform China from a low-wage factory into a high-income creator of technology with self-sustaining economic growth.

A broad-strokes plan issued by the party leadership in November promises to give entrepreneurs who generate most of China's new jobs and wealth more access to state-dominated industries.

Regulators announced this month they will allow the creation of five privately financed banks this year. Beijing has announced plans for a dozen new free-trade zones in Shanghai and other cities with promises of easier restrictions on business.

But such changes will take time to show results.

"Our expectation is that there isn't going to be any national-level substantive reform within 2014," said economist Brian Jackson of IHS Global Insight. "They're going to launch small experiments."

The biggest potential growth risk cited by many analysts: A rapid buildup of debt in China's government-owned banking system.

China's banks avoided mortgage-related turmoil that battered Western lenders but ramped up lending under orders from Beijing to help fend off the effects of the 2008 global slowdown.

The IMF and industry analysts warn they might be hit by a rise in defaults if toll roads and other projects approved in haste fail to earn enough.

The central bank says debt levels are manageable but economists say the speed of the increase is a warning sign. Outstanding bank loans have swelled by the equivalent of 70 percent of China's gross domestic product over the past five years. Analysts point to countries such as Thailand that have plunged into financial crises after seeing smaller debt increases of as little as 30 percent.

China "needs to contain the building of risks in the financial sector without excessively slowing growth," said the IMF chief economist, Olivier Blanchard, at a news conference this month. "This is always a very a delicate balancing act."

At the same time, Beijing's effort to clamp down on credit and tighten control over informal lending that support entrepreneurs has sent shock waves through financial markets. Markets in which banks lend to each other ran short of cash twice last year, causing interest rates to spike and fueling unease about the availability of credit.

"The uncertainty related to rate spikes and liquidity squeezes may affect business spending more broadly," said UBS economist Tao Wang in a report.

Wages in some areas such as the manufacturing-intensive southeast are forecast to rise this year by as much as 10 percent. But workers complain gains are eaten up by rising living costs — a bad sign for government hopes for higher consumer spending.

Lei Qiang, a logistics manager in Shanghai, said he and his wife have little left every month after paying for basics and save whatever they can. They plan to return to their hometown of Xi'an in western China with their 2-year-old daughter to escape Shanghai's high cost of living.

"Living in Shanghai for three years, my rent went up every year by 20 to 30 percent," said Lei, 38. "That was far more than my pay rose."'

It's pretty obvious what needs to happen. The elites need to take a smaller share of the cake and the masses more. The masses simply do not have the incomes to sustain the virtuous consumption-investment-production cycle. But it should not be a surprise, since the other 85% of the world economy is in exactly the same situation.

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It's pretty obvious what needs to happen. The elites need to take a smaller share of the cake and the masses more. The masses simply do not have the incomes to sustain the virtuous consumption-investment-production cycle. But it should not be a surprise, since the other 85% of the world economy is in exactly the same situation.

You sound like a commie to me...

;)

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It's pretty obvious what needs to happen. The elites need to take a smaller share of the cake and the masses more. The masses simply do not have the incomes to sustain the virtuous consumption-investment-production cycle. But it should not be a surprise, since the other 85% of the world economy is in exactly the same situation.

You sound like a commie to me...

;)

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You sound like a commie to me...

;)

I know I know wanting a functioning capitalistic system that works for everyone is so communistic.

In fact after I finish typing this I'm going to walk up and down the streets greeting everyone as 'comrade' while singing the union of socialist soviet republics national anthem.

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I know I know wanting a functioning capitalistic system that works for everyone is so communistic.

In fact after I finish typing this I'm going to walk up and down the streets greeting everyone as 'comrade' while singing the union of socialist soviet republics national anthem.

Many a true word spoken in jest!

Being in favor of a viable form of capitalism in which labor is able to fulfill it's role as a consumer as well as a producer of goods and services is likely to get you written off as a socialist these days.

Apparently the new definition of capitalism is a system in which speculators are supplied with endless cheap money by the central banks and then bailed out if their speculative ventures should incur a loss of any kind.

And if you don't agree with this new model then you must be a raving socialist nut job.

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Many a true word spoken in jest!

Being in favor of a viable form of capitalism in which labor is able to fulfill it's role as a consumer as well as a producer of goods and services is likely to get you written off as a socialist these days.

Apparently the new definition of capitalism is a system in which speculators are supplied with endless cheap money by the central banks and then bailed out if their speculative ventures should incur a loss of any kind.

And if you don't agree with this new model then you must be a raving socialist nut job.

I've noticed that as well.

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I've noticed that as well.

It's simply a way to shut down debate. They don't want to answer your points, they don't want to debate, they don't want to be proven wrong. So what do they you do? They call you communist, throw around some insults. Try to marginalize you as someone not worth talking with or debating with.

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Many a true word spoken in jest!

Being in favor of a viable form of capitalism in which labor is able to fulfill it's role as a consumer as well as a producer of goods and services is likely to get you written off as a socialist these days.

Apparently the new definition of capitalism is a system in which speculators are supplied with endless cheap money by the central banks and then bailed out if their speculative ventures should incur a loss of any kind.

And if you don't agree with this new model then you must be a raving socialist nut job.

The trouble is, I think this is the first time that capitalism has had to cope with this dilemma, which flies in the face of many of the underlying assumptions.

(also "you sound like a commie" is a much shorter version of wot you said;) )

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Many a true word spoken in jest!

Being in favor of a viable form of capitalism in which labor is able to fulfill it's role as a consumer as well as a producer of goods and services is likely to get you written off as a socialist these days.

Apparently the new definition of capitalism is a system in which speculators are supplied with endless cheap money by the central banks and then bailed out if their speculative ventures should incur a loss of any kind.

And if you don't agree with this new model then you must be a raving socialist nut job.

The trouble is, I think this is the first time that capitalism has had to cope with this dilemma, which flies in the face of many of the underlying assumptions.

(also "you sound like a commie" is a much shorter version of wot you said;) )

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The trouble is, I think this is the first time that capitalism has had to cope with this dilemma, which flies in the face of many of the underlying assumptions.

(also "you sound like a commie" is a much shorter version of wot you said;) )

No it had to cope with it before. See the great depression in the 1920s and 30s. There were sound reasons as to why we in the west then engineered a system where the proceeds of the economy were widely distributed. Read the quote below and you will see that it exactly matches the situation now.

But then I'm supposedly a communist and probably a fascist too so what do I know. Do you have any babies I could eat?

Marriner S. Eccles, who served as Franklin D. Roosevelt's Chairman of the Federal Reserve from November 1934 to February 1948, detailed what he believed caused the Depression in his memoirs, Beckoning Frontiers (New York, Alfred A. Knopf, 1951).

As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. [Emphasis in original.]

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spend by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment.

Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population.

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No it had to cope with it before. See the great depression in the 1920s and 30s. There were sound reasons as to why we in the west then engineered a system where the proceeds of the economy were widely distributed. Read the quote below and you will see that it exactly matches the situation now.

But then I'm supposedly a communist and probably a fascist too so what do I know. Do you have any babies I could eat?

Thanks for that. A first-draft of my post included a comment about whether I was being naive, and whether the 1929 crash was a closer mirror than I thought. IMHO the main difference has been the response, which has further concentrated wealth, rather than redistributing it (as required).

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Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped

So this was written in 1951- and in 2007 Ben Bernanke thought the solution was to build a better, bigger pump? :lol:

It's true then- it's very hard to get a man to understand something if his job prospects depend on not understanding it.

Edited by wonderpup

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Many a true word spoken in jest!

Being in favor of a viable form of capitalism in which labor is able to fulfill it's role as a consumer as well as a producer of goods and services is likely to get you written off as a socialist these days.

Apparently the new definition of capitalism is a system in which speculators are supplied with endless cheap money by the central banks and then bailed out if their speculative ventures should incur a loss of any kind.

And if you don't agree with this new model then you must be a raving socialist nut job.

that's probably because the boundary between capitalism and corporatism has been so badly blurred.

what we really have now in effect is corporatism( where the big boys re-write all the legislation to suit their own ends and stifle competition)

capitalism DEMANDS those who make bad bets take their licks.

9of course the marxist-leninist gameplan is to play this one out to extremes and get everybody livid with capitalism that wasn't, hoping to get the knee-jerk pendulum swing the other way.

fantastic reverse-psychology. don't just create the problem, exacerbate it, and then play "he who smelt it dealt it"

pointing out the problems that have been artificially manufactured in a way the opposite effect will suppossedly make you look like the good guys.

...nothing about empty shelves, starving people and the brutal police-state created to hide/supress the f*** ups of central planning.

Edited by oracle

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No it had to cope with it before. See the great depression in the 1920s and 30s. There were sound reasons as to why we in the west then engineered a system where the proceeds of the economy were widely distributed. Read the quote below and you will see that it exactly matches the situation now.

But then I'm supposedly a communist and probably a fascist too so what do I know. Do you have any babies I could eat?

good link....and the analogy to the economy from y2k to present is quite frankly, frightening,

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that's probably because the boundary between capitalism and corporatism has been so badly blurred.

what we really have now in effect is corporatism( where the big boys re-write all the legislation to suit their own ends and stifle competition)

capitalism DEMANDS those who make bad bets take their licks.

9of course the marxist-leninist gameplan is to play this one out to extremes and get everybody livid with capitalism that wasn't, hoping to get the knee-jerk pendulum swing the other way.

fantastic reverse-psychology. don't just create the problem, exacerbate it, and then play "he who smelt it dealt it"

pointing out the problems that have been artificially manufactured in a way the opposite effect will suppossedly make you look like the good guys.

...nothing about empty shelves, starving people and the brutal police-state created to hide/supress the f*** ups of central planning

So the fact that the capitalists have transformed into a collection of corrupt crony fraudsters intent on looting the system by using their money to undermine the rule of law and the principles of genuine free markets is in fact a Marxist Leninist plot designed to blacken the name of true capitalism and pave the way for a new era of communist ascendancy?

Wow! those commies are far smarter than I ever imagined- to have conceived a plot so devilishly cunning and far sighted. No doubt the collapse of the soviet union was a deliberately engineered event designed to lull the capitalists into a false sense of security- because with their great ideological opponent gone they would no longer fear a backlash from the now voiceless proletariat as they no longer had an alternate model to which they could flock.

Brilliant.

Or, just maybe, the inevitable outcome of any capitalist system that has no opposing ideology to inhibit it's excesses is that it will, sooner or later, spawn a crony class at the top who will use their wealth to subvert rule of law and the principle of the free market?

After all if the first principle of the free market is self interest then self interest is best served by preventing that free market from operating against you. So it could be argued that the logical endpoint of any free market system is the evolution of a crony based cabal who will do all they can to ensure that the free market no longer operates- because that free market system represents a clear threat to their current dominance.

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So the fact that the capitalists have transformed into a collection of corrupt crony fraudsters intent on looting the system by using their money to undermine the rule of law and the principles of genuine free markets is in fact a Marxist Leninist plot designed to blacken the name of true capitalism and pave the way for a new era of communist ascendancy?

How could the EVIL CAPITALISTS use government to loot the country, if the government wasn't sucking up most of the country's income?

If you want to stop the EVIL CAPITALISTS, you need to massively reduce the amount of the national income that the government steals. Then they won't be able to give it to their mates in the business world.

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How could the EVIL CAPITALISTS use government to loot the country, if the government wasn't sucking up most of the country's income?

If you want to stop the EVIL CAPITALISTS, you need to massively reduce the amount of the national income that the government steals. Then they won't be able to give it to their mates in the business world.

I'm sorry but this is absolute nonsense.

The U.S. had a tiny government in the late 1800s and early 1900's. Yet the then titans of the business world were routinely looting the nation, and were perfectly capable of using the government to enforce their looting. For example at the behest of these titans US troops were routinely used to violently put down strikes.

The idea of shrinking the gov to reduce the power of the corporate sector is laughable. Why would the business friendly right promote something that would be inimical to their interests? The reality is you would simply create a power vacuum into which the corporates would flow. We would end up with a system many times worse than that we currently have. The gov at least to some extent has to listen to voters, no corporate has to, especially when no government would exist with the power to stand up to it.

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How could the EVIL CAPITALISTS use government to loot the country, if the government wasn't sucking up most of the country's income?

If you want to stop the EVIL CAPITALISTS, you need to massively reduce the amount of the national income that the government steals. Then they won't be able to give it to their mates in the business world.

I need to do this? What about the people I elected- do they have any responsibility?

Oh wait- I forgot about this;

Revealed: 50% of Tory funds come from City

Donations from the financial sector have risen steeply since David Cameron became leader of the Conservative party

Financiers in the City of London provided more than 50% of the funding for the Tories last year, new research has revealed, prompting claims that the party is in thrall to the banks.

A study by the Bureau for Investigative Journalism has found that the City accounted for £11.4m of Tory funding – 50.79% of its total haul

http://www.theguardian.com/politics/2011/feb/08/tory-funds-half-city-banks-financial-sector

The reality is that the capitalists don't want a free market- they want a rigged market- and they achieve this by purchasing the political power to make sure it stays rigged.

And this is entirely consistent with the idea of a market driven by self interest- because self interest demands that the most efficient way to succeed in a free market is to ensure that it does not work by bribing the people responsible for it's oversight.

The issue is not about state funds being siphoned off as payoffs to the private sector- the issue is private sector money being used to purchase influence.

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Many a true word spoken in jest!

Being in favor of a viable form of capitalism in which labor is able to fulfill it's role as a consumer as well as a producer of goods and services is likely to get you written off as a socialist these days.

Apparently the new definition of capitalism is a system in which speculators are supplied with endless cheap money by the central banks and then bailed out if their speculative ventures should incur a loss of any kind.

And if you don't agree with this new model then you must be a raving socialist nut job.

The establishment use state force to rig the game, while pretending it is free market trading. The MSM just repeats this line and most people are too blind to see it.

This isn't new though. Those with power have been trying similar tricks since time began. If only there was a way for the masses to communicate without going through gate keepers... Oh wait...

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So the fact that the capitalists have transformed into a collection of corrupt crony fraudsters intent on looting the system by using their money to undermine the rule of law and the principles of genuine free markets is in fact a Marxist Leninist plot designed to blacken the name of true capitalism and pave the way for a new era of communist ascendancy?

Wow! those commies are far smarter than I ever imagined- to have conceived a plot so devilishly cunning and far sighted. No doubt the collapse of the soviet union was a deliberately engineered event designed to lull the capitalists into a false sense of security- because with their great ideological opponent gone they would no longer fear a backlash from the now voiceless proletariat as they no longer had an alternate model to which they could flock.

Brilliant.

Or, just maybe, the inevitable outcome of any capitalist system that has no opposing ideology to inhibit it's excesses is that it will, sooner or later, spawn a crony class at the top who will use their wealth to subvert rule of law and the principle of the free market?

After all if the first principle of the free market is self interest then self interest is best served by preventing that free market from operating against you. So it could be argued that the logical endpoint of any free market system is the evolution of a crony based cabal who will do all they can to ensure that the free market no longer operates- because that free market system represents a clear threat to their current dominance.

All you can do is oppose centralisation and deny legitimacy to those who try to use violence to get their way.

There is no magic bullet to stop people from using violence. All you can do is disperse and defame those who attempt to profit from it.

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I'm sorry but this is absolute nonsense.

The U.S. had a tiny government in the late 1800s and early 1900's. Yet the then titans of the business world were routinely looting the nation, and were perfectly capable of using the government to enforce their looting. For example at the behest of these titans US troops were routinely used to violently put down strikes.

The idea of shrinking the gov to reduce the power of the corporate sector is laughable. Why would the business friendly right promote something that would be inimical to their interests? The reality is you would simply create a power vacuum into which the corporates would flow. We would end up with a system many times worse than that we currently have. The gov at least to some extent has to listen to voters, no corporate has to, especially when no government would exist with the power to stand up to it.

You can't rely on just voting every few years either, hoping that they will turn out to be strong, good, guys.

People must take responsibility. It cannot be left to others.

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that's probably because the boundary between capitalism and corporatism has been so badly blurred.

what we really have now in effect is corporatism( where the big boys re-write all the legislation to suit their own ends and stifle competition)

capitalism DEMANDS those who make bad bets take their licks.

9of course the marxist-leninist gameplan is to play this one out to extremes and get everybody livid with capitalism that wasn't, hoping to get the knee-jerk pendulum swing the other way.

fantastic reverse-psychology. don't just create the problem, exacerbate it, and then play "he who smelt it dealt it"

pointing out the problems that have been artificially manufactured in a way the opposite effect will suppossedly make you look like the good guys.

...nothing about empty shelves, starving people and the brutal police-state created to hide/supress the f*** ups of central planning.

Shall we say this is the problem of capitalism, those with capital will seek to keep it and rewrite the rules to ensure they get to keep it.

How you fix this dilemma I have no idea, because winners like being winners. No one likes to be a loser and people will seek to avoid that at all costs!

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China currency crisis threatens global meltdown.

Currency crisis at Chinese banks 'could trigger global meltdown’

A rise in foreign funding at China's banks poses a threat for international lenders

By Harry Wilson

9:30PM GMT 01 Feb 2014

The growing problems in the Chinese banking system could spill over into a wider financial crisis, one of the most respected analysts of China’s lenders has warned.

Charlene Chu, a former senior analyst at Fitch in Beijing and now the head of Asian research at Autonomous Research, said the rapid expansion of foreign-currency borrowing meant a crisis in China’s financial system was becoming a bigger risk for international banks.

“One of the reasons why the situation in China has been so stable up to this point is that, unlike many emerging markets, there is very, very little reliance on foreign funding. As that changes, it obviously increases their vulnerability to swings in foreign investor appetite,” said Ms Chu in an interview with The Telegraph.

Ms Chu has been warning since 2009 about the growth of a shadow banking system in China that has helped fuel the credit expansion seen in the country in the wake of the Western financial crisis.

However, fears are growing that the build-up of foreign borrowing by the Chinese, particularly in US dollars, is creating an even greater build-up of risk than that seen before the crisis of 2008.

Figures published by the Bank for International Settlements (BIS) in October showed foreign currency loans booked in China, as well as cross-border borrowing by Chinese companies, had reached $880bn (£535bn) as of March 2013, from $270bn in 2009.

Analysts say this figure is now likely to exceed $1 trillion and is continuing to grow, raising the prospect of the potentially dangerous vulnerability of the Chinese financial system to a rising dollar.

“It is very hard to work out the exposures of individual banks to the Chinese financial system, but it seems to us there are some very large numbers on some of the bank’s balance sheets,” said the analyst.

“Without a doubt, that has been on the rise [foreign currency borrowing] and was really starting to grow fast in the latter half of last year and it’s only going to continue. For the time being, it is only a fraction compared to the massive size of the financial sector, but still we’re talking about a growing amount of funding coming from offshore sources,” she said.

“You look at the exposure numbers from the BIS and the Hong Kong banks . .. you’re going to encounter a few [foreign] institutions that are going to have a sizeable exposure to China.”

George Magnus, senior independent economist at UBS, said the Chinese banking system resembled that of Japan during the 1980s in the years leading up to the country’s financial crash.

“If the dollar were to appreciate it could cause problems for those banks that have borrowed in dollars. Anywhere you have a banking system that uses a non-domestic currency, there is a possibility of a mismatch that could cause issues when the value of your liabilities runs away from you,” said Mr Magnus.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10612451/Currency-crisis-at-Chinese-banks-could-trigger-global-meltdown.html

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It's quite possible that the circa 1929 period is being used as a model to follow for the current economic crisis on the basis that those currently pulling the levers will know the outcomes and so will profit from that knowledge.

Of course the story being published and for general consumption is that they've learnt the lessons of the 1929 period to avoid the same things happening again

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