Why China is Not Different

Posted this at an online blog recently, in their comments section.

Enjoy.

I think that one of the main reasons that “China is different”, is really, because the USA “was different” – in that the USA was (!) possibly the greatest economic machine ever (?), and China “works” only because the USA first existed…else, Chinese communism would and could never have done what it has done. It is only the stupid, short-sighted USA that enabled them to become what they have become, and are becoming, due to massive USA –> China wealth and productivity transfer.

ie. it took the USA to first legitimately “succeed” for Chinese Communism/centralised-market-weirdness (?) to ride on the back of the USA…else there simply would be now “Wow, China!” that we have today.

So, is China different? Sure, why not.

But i’m still uneasy about the whole “they are different in a way we don’t yet understand”.

And my problem is philosophical and psychological in nature. Read more of this post

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Do the Financial Actions of Central Banks Affect the Prices of Everyday Items?

I had a friendly exchange with a few economics acquaintances recently, where we were discussing the role (or not) that Central Banks actions had on prices of items in the “real world” (housing, food, energy, minerals, etc).

Particularly, we were discussing whether recent actions by Central banks around the world – to “bail out” various financial institutions, to directly stimulate, to “Quantitatively Ease”, etc, etc – would affect those aforementioned types of items – food, housing, etc…the sorts of things that people in the real world cared about, as opposed to the many varied financial assets and instruments that exist. Read more of this post

Measures of Affordability in Context. And Is This Chris Joye’s “Fischer Moment”? (Updated)

In case you didn’t know, my favourite property spruiker, Chris Joye (CJ), has recently posted this article in Business Spectator:

A Property Bubble Long Shot

More of the same: ‘we’re right, they’re wrong, Australia is different’:

In one corner we have journalists at The Economist newspaper, who in theirĀ latest survey make the extraordinary claim that Australian house prices are overvalued by 56 per cent using their preferred benchmark. In the other corner we have a crowd of the most respected economic minds in Australia, including the Reserve Bank of Australia, the Commonwealth Treasury, almost all market economists, and leading house price index providers, such as RP Data and Rismark.

In my opinion, this is not a goo start – it rings of an argument from authority, which I have little logical respect for. Anyhow, moving on… Read more of this post

Some Thoughts on Government Debts and Money Printing

An particular argument that urks me is when people assert that when inflation occurs due to more money being produced than goods to tie it to, that this is “just inflationary”. And, it is, sure.

But the implicit assumption here is one of near-instantaneous equilibrium of the money supply, as if “things pretty much just go up together, proportionally”; or at least, that and similar explanations are issued at moderators to contentions raised.

But the truth is that inflation, at least as I have perceived and experienced it, is rarely, if ever, uniform. Read more of this post

An Irishman Walks Into a Bar…

Recently read the following from the Delusional Economics blog (article here):

Mary is the proprietor of a bar in Dublin. She realises that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronise her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans). Read more of this post

Aussie Officials and The Aussie Housing Bubble (“not”)

I say “not”, because it would, in fact, be political, social and economic suicide for Government employed (or endorsed) officials to say that “there is a housing bubble”, even if they believe there is….

…So the moral here is: just because you don’t hear our officials saying things like “Hmm, yes…it does look bubbly, doesn’t it?”, does not mean there is not one. Read more of this post

Two Million Aussies in “Poverty”

I recently came across this article: LINK

It is simply a mainstream media recognition of what many, myself included, have seen in family, friends, acquaintances, and anecdotally: people are struggling under the weight of their financial obligations, particularly mortgage repayments, credit card interest payments, vehicle operational costs, and simply putting food on the table. Read more of this post