The Damage Is Just Unfolding
By Debbie Young
By rawf8 @ Shutterstock.com
Debbie Young, Cafe Bonaparte Terrace, Paris
In the Manhattan Contrarian, Francis Menton shows how China’s system has” enormous disadvantages, mostly self-inflicted by the ruling Communist Party, that show every prospect of greatly hindering and undermining its ongoing economic advance.”
China’s relative new-found wealth has allowed it to keep up the illusion of productiveness for years, issuing debt to support make-work projects even as its economy hollows out.
The United States, a far wealthier country, can keep up the illusion for much longer. But not forever, warns Mr. Menton.
In the last few months, China has been doubling down on the most “counter-productive aspects of its economic system.”
From the Epoch Times;
Be it e-commerce, entertainment, education, or gaming, few areas of Chinese society have been left unscathed amid Beijing’s torrent of regulatory activity in recent months. . . . The cascading crackdowns have been swift and puzzling, with some likening the Party’s attempts at social engineering to that which occurred during the Cultural Revolution, a decade-long period from 1966 when the regime’s first helmsman, Mao Zedong, sought to reassert his control within the Party by launching a mass campaign to destroy traditions, beliefs, and social mores.
A “profound revolution” is underway in China, declares nationalist essayist Li Guangman, a former editor for an obscure state newspaper. In a recent commentary quickly promoted on prominent Chinese state media websites, he hailed the regime’s campaign as a “return to the original intent of the Chinese Communist Party (CCP) … and the essence of socialism. . . .”
Debbie Young, Freddie’s Cafe, Paris
Is China Broken?
An article from the WSJ illustrates how China’s economic model took the country from “poverty to great-power status.” Everywhere, there are signs of distress.
With private investment weak and exports flagging, officials say they have little choice but to keep borrowing and building to stimulate their economies…
The outlook has darkened considerably in recent months. Manufacturing activity has contracted, exports have declined, and youth unemployment has reached record highs.
One of the country’s largest surviving property developers, Country Garden Holdings, is on the cusp of a possible default as the overall economy slips into deflation.
EVs, the Heavily Subsidized Rush
Mr. Menton focuses on an even bigger misdirection of capital by state command: the heavily-subsidized rush to produce electric cars:
A plethora of Chinese EV start-ups launched in the past decade, fueled by government support, including consumer incentives and direct financing. Auto makers churned out EVs to suck up subsidies.
About 400 Chinese electric-car makers have failed in the past several years as Beijing reduced industry subsidies while ramping up production mandates. Scrap-yards around China are littered with EVs whose technology has become outdated. . . . Chinese government support inflated EV investment and misallocated capital that could have been put to more productive uses. Now comes the destruction that invariably follows the government creation. . . .
The WSJ raises the issue of China’s EV industrial policy: Will China’s EV woes be a harbinger for the U.S. as the Biden Administration emulates China’s EV industrial policy?
One can only hope the Biden administration will learn from China’s state-directed commands to produce EVs.
In a dynamic economy, assures Mr. Menton, “business failures are inevitable.”
How about the additional trillions getting thrown into “green energy” more generally: solar arrays, wind farms, battery storage, massive new transmission lines, new heating systems for buildings, etc., etc., etc.?
All of this is unproductive, which at some point will be recognized. And all of it will need to get discarded, and the economic resources re-directed back into something useful.
Government will be mainly responsible for the destruction that results from its force-fed EV transition—and the damage may only just be starting.
Getting Older Isn’t for the Faint of Heart
By E.J. Smith – Your Survival Guy
By PeopleImages.com – Yuri A @ Shutterstock.com
“All I can tell you it that it’s hard,” my father-in-law Dick Young told me. “Getting older means pretty much everything is harder. It’s not easy. And you need a team to help you. I’ve been advising investors since 1971 and can tell you, you don’t know what it feels like until you’re actually living it.”
When I think about our conversations, it reminds me of the conversations I have with investors. They know how hard it is, too. They know what it feels like to live off their portfolio. We talk about ways to generate income. And yet, there’s always concern about the future. That’s natural. That’s part of this whole deal. The not knowing is the hardest part.
Thankfully, the readers who are attracted to Your Survival Guy have saved til it hurts and live within their means. They appreciate what it takes, what it took, and what they did without back then to get to where they are today. There’s a lot of life tucked inside your monthly statements. It’s human nature to look ahead, but it’s really more about looking back on how you made it happen. Nice work.
And yet, investors will read, and read, and read about the future. Areas they can’t control. “What will inflation do? Where are interest rates headed? Let’s throw some money at this,” they think.
But what matters most is; are you saving, and are you living within your means?
Action Line: I always hear, “We want preservation of principal and growth.” That’s not an objective. That’s a hope. Hope is not a strategy. When you’re ready for some help, let’s talk.
Originally posted on Your Survival Guy.
E.J. Smith – Your Survival Guy: Archive
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998.
E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention.
E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.
Sarah Huckabee Sanders – Trump’s VP Pick?
Governor Sarah Huckabee Sanders has worked with President Trump in the White House before as his press secretary. She’s also shown that she can win an election on her own by becoming the governor of Arkansas. As you can see in the video below, she’s also demonstrated that she will not be cowed by the establishment. Could she be Trump’s pick for running mate if he wins the Republican nomination?
As long as I’m Governor, Arkansas will not lock down.
We will not close schools, churches, or businesses.
And we will not have mask or COVID vaccine mandates. pic.twitter.com/nj4ONer122
— Sarah Huckabee Sanders (@SarahHuckabee) August 31, 2023
Won’t Get Fooled Again
Many Americans were duped by the Covid propaganda, but they won’t get fooled again.
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