China fights against its deflationary spiral
463 sats \ 8 comments \ @TomK 13 May econ
The years-long decline of the Chinese real estate sector has once again exposed the weaknesses of a centrally planned economy. The artificial real estate bubble has burst, driving the Chinese economy into deflationary spirals. No fiat monet system in the world can survive these trends, as credit growth is required to roll over the debt into the future.
Now the central planners are planning the next step in the fight against deflation: the issue of long-dated government bonds with a volume of around 140 billion dollars to help the crippled economy get back on its feet with government demand. A principle that we have known from the keynesian economies of the west for decades and that leads to nothing other than shrinking productivity and private sector and higher government debt. Good luck with that crap!
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43 sats \ 0 replies \ @Coinsreporter 13 May
Is that a joke? Are they even eligible to hold their positions. A high school graduate can provide a Mich better solution.
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42 sats \ 0 replies \ @FRNdisrespector 13 May
On the other hand, keeping their currency weak against the dollar has helped them force low wages for factory workers and a trade surplus against the US. They successfully captured most of our manufacturing in just 30 years. Our global free trade zone with USA as the elite consumers in constant trade deficit works very well when we have unmitigated force projection. The Chinese may build fake condos, but we print fake money.
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42 sats \ 5 replies \ @Satosora 13 May
Yes, it is very bad. Do you know what they will do with those ghost cities? They should have invested their money wisely, and build as close to the main city as possible. At least that way the houses would actually be used!
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60 sats \ 1 reply \ @TomK OP 13 May
Demolish and build back better
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0 sats \ 0 replies \ @Satosora 13 May
Is it even worth wasting the resources to demolish those ghost cities?
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84 sats \ 1 reply \ @machuPikacchu 13 May
Their central planners have been buying up gold, bitcoin hashrate, and investing in nuclear power so long term there is little risk to their power structure. The average person on the other hand might have problems.
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0 sats \ 0 replies \ @Satosora 14 May
There will be risks when stuff starts to collapse. Their economy is really shaky a the moment.
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0 sats \ 0 replies \ @486DX2 13 May
It's all topsy-turvy, there's so many people in the world who need a place to live and here's a load of nearly completed places to live that will just crumble to nothing. Madness.
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