China: Boom or bust? (2)

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#1
Moves to improve China's own infrastructure and standards of living would indeed seem to be consistent with the general ethos of the country and to provide greater benefits to its own populace rather than to the west.

Of course whether "democratic socialism" would be a step forward is debatable, especially if greater democracy leads to more short termism and instability rather than being able to take a long term view.

Of course if China were to do this and continue to export to the west at the same levels it would do little to help rebalance western economies; although the increased demand for raw materials could provide a welcome boost to many of the poor but resource rich nations of the world.

The pre-eminence and wealth of western economies is founded to a large part on exploiting advantages over much of the rest of the world, globalisation erodes these advantages for all but the richest, the owners of the "means of production", putting downward pressure on the potential wealth of much of the populace of western nations.

Surely if these apartments are being left empty they will deteriorate and therefore lose value? So thereby defeating the object of not renting. Indeed, if, as in the West, the apartment blocks are managed then the owners would be paying 'service costs' without any return. I don't think any well-off Chinese are that fiscally stupid. If then, these properties are to be allowed to fall into ruin, I presume this will encourage full employment of building/cement/wood etc workers to construct even more properties for which wealthy Chinese will pay even greater prices!?!?Doesn't make sense!Unless, of course, you're Chinese!

"...the inevitable consequence of a historically unprecedented mass movement of personal enrichment combined with severe restrictions on how and where the newly enriched can invest their cash."

This is at the crux of one of the many hurdles in the path of China's economic development. People are happy when they are becoming more prosperous, they don't care whether they are allowed to vote or not, but at some point they begin to feel a bit peeved that they are being prevented from becoming really rich by a government which restricts their spending, consuming and investment opportunities (a government consisting of career politicians that aren't themselves shy of enjoying whatever luxuries they can get for themselves - does that sound familiar?).

It's not only the poor oppressed masses that rise up when they're starving in the streets, the middle classes can be just as bolshy when, for example, their property portfolios go pear-shaped, even in a country of people who are historically accustomed to authoritarian rule, from the centuries of Emperors, through Mao, to the modern day CCP.

I don't think it's overly pessimistic to say that it's almost unthinkable that China could reach a level of development that the West has achieved whilst maintaining the current political system. Not because the system is economically unsuitable to continued growth, but because the people will come to expect a greater say in how decisions are made and how they run their life.

And as we saw in the Soviet Union in the late 80's it's very difficult to make such changes in a gradual and controlled way - once a trickle begins the floodgates very soon burst open. Of course, if they were to glance over here and see how much power people really have in our Western "democracies" they may decide that being told how they can spend their money is not so bad after all.

If Cameron comes back waiving a piece of paper in the air shouting "Deal, in our time" - DUCK!

Chinese buy to let?
Surely their view of the U.S. and U.K. bonds is more important.

Are the Chinese still in the market for U.S. and U.K. sovereign debt?
Given more QE in the U.S. & likely soon in the U.K.; will there be any overseas investors still in the market for U.S. and U.K. sovereign debt?

https://www.dagongcredit.com/dagongweb/uf/USARatingReport.pdf

I hope the Chinese poor get some benefit out of this wealth. Trickle down theory doesn't seem to be working any better over there than here.

So, many of these apartments were paid for in cash, were they? How and where did this cash come from? On a trip to Vietnam a few years ago, large payments for cars, houses and so on were paid for in small gold bars. I'm also pleased that you mention "market failure" - what, pray, do you consider a "successful" market?

China is one massive Enron of shady accounting, of course it's going to crash, and one massive crash at that, the biggest collapse in modern history, it's just a matter of time, a year or two at most.

#4. At 08:59am on 10 Nov 2010, davidbrent

Unfortunatley both sides of the Great Wall believe what they are told and the people can only make judgement based on the information made available to them. The grass isn't greener for either I'm afraid. China may be the envy of the world at the moment but the basic economic premise of "Product - Market - Manufacture - Price" has two potential problems that I can see as the world enters a downturn. This is why China is now looking inward for its market so its growth can be self sustained for a while in the hope it can ride out a potential global collapse. From, what I can see China is already making preparations for global downturn and reduced growth through tighter bank controls over lending, commercial expansion and property acquisition, in effect its trying to stop bubbles getting bigger. The US latest round of QE is playing into their hands really by devaluing the dollars they have reducing their bubbles for them, also the dollar will never devalue enough to compete because China can swallow all the cheap dollars up without inflating their current account too much.

Robert wrote:

"The pumping up of a residential property bubble"

Well at least the Chinese will have the pleasure of a property crash to look froward to and we will have the Schadenfreude of being able to say 'told you so'!

Property must remain affordable for the average earner or has we have found society shatters and so does the economy.

"the tension between growth and environmental protection," is a polite way of describing what is happening in China. Indeed it is debatable whether there is any tension when the goal of growth is absolute. China's strange hybrid system - command and control overseeing essentially a market if not a free enterprise economy may be able to deal with the inevitable major disturbances resulting from unsustainable development. Not so the possible effects of China's rise on the western economies through inflation and increasing unemployment which in some countries will lead to political instability.

QE will undermine the China currency, the only way to combat it is for China to create cash out of thin are, the US prints $1 trillion, so too will China, eventually the whole rotten structure of the global economy will collapse.

The US and Western Europe, of course, are currently mired in debt and in a credit squeeze caused by a long term episode of asset inflation. This will pass and both areas will return to strong growth in due course as part of the economic cycle.

Contrary to what appears to be widely accepted in Britain, China is not immune to this kind of economic cycle. Heresy to say it right now, but China too could end up in a major bust at some point. Remember Japan 20 years ago? There are similarities. In many ways China is far worse: no democracy, no human rights, no workable legal system, pandemic corruption, extreme inequality (to name just a few).

Robert

Are you suggesting that Lindsay_from_Hendon should move from Switzerland to Beijing as it sounds like her idea of paradise?

Might I suggest that these residential properties are soaking up cash that would otherwise slosh out into domestic inflation. Not so much a hedge but rather a sponge?

Sounds like a great place for WOTW to try out his 'advanced human' form of altruism. you know, "from each...to each..." sort of thing.

History has indicated to me that only poor societies experiment with socialism. As soon as a society becomes "affluent", it abandons the experiment. The alternative "self-interest" model (with which we are lumbered) only "trickles down" resources to those who can pay, rather than those in need.

It is often said that self-interest human nature. (According to most evolutionists it is the nature of nature itself. The driving force of all life.) But WOTW has apparently evolved beyond that.

Which appears to be why socialism has always had to be enforced on the population. And when the restraining hand is removed...

Anyway, to the point. If there is a repeat of the old "enclosures acts" process in China, and a subsequent urbanification, what will they do with the peasants?

The same question faces all modern societies...in an energy rich world, how do you extract useful labour out of the majority of humanity?

("Useful work", in thermodynamic terms, is energy that has an effect other than being dissipated as heat.)

In mushroom's economic dictionary "useful" means 'work that adds value to assets'.

(As an aside, "Consumerism" is dissipation of stored value, and can be considered the parallel of inefficiency in a thermodynamic cycle. Spend money, play, throw away!)

In the era when Britain had pots of money, people built "follies". In China they build cities. At least you can live in an apartment block.

Hey ho.

A property tax would provide a prod to rent these out, no?

Sounds a bit like Vietnam with lots of empty apartments, that "theoretically" are worth more than Joe Nguyen in the street could ever afford to pay in rent. I still dont understand it can be sustainable ie apartment price v GDP/capita. It is bad here in Vietnam too,.......maybe worse. But like China, the locals cant invest overseas - Note, it is not illegal per se, it is just that you Ministry of Finance approval, which you can immediately forget. Also a lot of tax evasion (it is the norm). Real estate is also a great way to bury away all those ill gotten gains / corruption, especially with / via big extended families.

Robert, I heard you last night on TV, as you shopped in a Beijing street market saying something about Chinese entrepeneurs taking your money. Was it really your money or will you be expensing that? I'm only teasing, I don't begrudge you a bag of sunflower seeds, although I do wonder why we didn't see you eating the fried locusts or various other exotic insects available from the street vendors. Although I have to admit I gave them a wide berth and headed straight for the noodle stall also - I don't mind trying something new but I draw the line at anything with more than 4 legs and/or hasn't had it's head removed.

1. At 08:18am on 10 Nov 2010, J__Hobson wrote:


The solution to dictatorial socialism is democratic socialism not capitalism.

- We don't need leaders whether they're dictatorial or democratically elected. In some ways the former is better as deomcratically elected leaders aren't really chosen by the people - it's just an illusion.

What we need is no government. I know the capitalists will be blogging that we need a government but that is only to keep them in their priviledged positions whilst others do all the work for them.

3. At 08:46am on 10 Nov 2010, Baz wrote:

I presume this will encourage full employment of building/cement/wood etc workers to construct even more properties for which wealthy Chinese will pay even greater prices!?!?Doesn't make sense!Unless, of course, you're Chinese!

- Looks like the Chinese are learning the worse of so called English society. Money for nothing, morally bankrupt (and soon to be finanically bankrupt) landlords. The value of a house is the shelter, nothing more.

# 11. At 09:26am on 10 Nov 2010, John_from_Hendon wrote:
"Robert wrote:

"The pumping up of a residential property bubble"

Well at least the Chinese will have the pleasure of a property crash to look froward to and we will have the Schadenfreude of being able to say 'told you so'!

Property must remain affordable for the average earner or has we have found society shatters and so does the economy."

That only applies John if the society you live in is preoccupied with home ownership. This is why continental Europe doesn't have anything like the UK and US housing bubble problems, we need to get away from the brainwashing that an "Englishman's home is his castle" and get used to being tenants again. After all it worked in an oppressive kind of way for hundreds of years, it just needs regulation regarding security of tenure to prevent the aforementioned abuse of tenants.

Home ownership for Joe Public is a late 20th Century con trick and a trick we all fell for in the illusion of an asset rich utopia. I for one will be getting out of the world of home ownership shortly and I won't be sorry to leave it behind.

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On reflection....I guess these affluent Chinese are not buying these apartments for investment or to eventually live in them. They are buying them because......they can! These are people who, in the main, for generations, have suffered terrible austerity and poverty. And now, all of sudden, a growing number can afford more than the rice on their plate and what better way to show off your new found wealth..buy your own little palace!But...it'll all end in tears!

5. At 09:03am on 10 Nov 2010, NorthSeaHalibut wrote:

If Cameron comes back waiving a piece of paper in the air shouting "Deal, in our time" - DUCK!

- If Cameron comes back at all!

... and while everybody's agonising about surpluses and balance sheets we hear (on the very same BBC front page) that the last wild tigers are being sliced up to supply the increasing numbers of rich Chinese with 'medicine'. Perhaps, in addition to his human rights advice, Cameron should be offering the Chinese some thoughts about respect for endangered animal species ... while there are a few left?

7. At 09:06am on 10 Nov 2010, PacketRat wrote:

I hope the Chinese poor get some benefit out of this wealth. Trickle down theory doesn't seem to be working any better over there than here.

- Capitalism only favours the rich. The means of production must be in then hands of everyone. I thought the Condems were promising fairness.

9. At 09:13am on 10 Nov 2010, Steve wrote:

China is one massive Enron of shady accounting, of course it's going to crash, and one massive crash at that, the biggest collapse in modern history, it's just a matter of time, a year or two at most.

- Typical jealous capitalist. What proof have you got to save a year or two? Glenn Beck offers more proof than you!

Boom or bust?

Well it is certainly booming, is the following bust inevitable? It would only take the US/UK to stop buying tat...

If China is growing at the tremendous pace you say it is, then I wouldn't read too much into the empty flats - the M1 was empty when it was first built. It’s just forward planning - they might be full in 5 years. Plus, a shortage of houses can also lead to a bubble.

However, I am afraid without some kind of trade agreement the future is bleak for all of us -including China.

I have a horrible feeling that if the transfer of wealth from west to east continues it will lead to war. The west is unlikely to go down without a fight. Maybe the war has already begun....

16. At 09:38am on 10 Nov 2010, stillpuzzled wrote:

It is often said that self-interest is human nature. (According to most evolutionists it is the nature of nature itself. The driving force of all life.) But WOTW has apparently evolved beyond that.

- Just because you've stopped evolving, don't attack others for developing!

The same question faces all modern societies...in an energy rich world, how do you extract useful labour out of the majority of humanity?

- Bankers do useful work do they?

18. At 09:44am on 10 Nov 2010, Tony Saigon wrote:

Sounds a bit like Vietnam with lots of empty apartments, that "theoretically" are worth more than Joe Nguyen in the street could ever afford to pay in rent. I still dont understand it can be sustainable ie apartment price v GDP/capita. It is bad here in Vietnam too,.......maybe worse. But like China, the locals cant invest overseas - Note, it is not illegal per se, it is just that you Ministry of Finance approval, which you can immediately forget. Also a lot of tax evasion (it is the norm). Real estate is also a great way to bury away all those ill gotten gains / corruption, especially with / via big extended families.

- You've risen up before against capitalism, why not do it again? It sounds like you're in the midst of a counter-revolution and who caused that I wonder? Foreign investment! The US couldn't beat you in the jungles so instead they beat you in the banks! Don't let them win.

Let's also remember that 1/ there are no "rates" taxes on cost of owning / holding property; and 2/ no Landlord-Tenant legislation ie tenant protection, so even less incentive to rent. Forget "An Englishman's Home is his Castle".......it should be Vietnameseman's,...or I guess Chinaman's.

Numerous home equity loans begin with interest rates approximately 6.675%. Many lenders as well charge lower interest rates, but for the most part, the borrower wont acknowledge the difference until he goes over the decrease of his monthly statements.
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4. At 08:59am on 10 Nov 2010, davidbrent wrote:

It's not only the poor oppressed masses that rise up when they're starving in the streets, the middle classes can be just as bolshy when, for example, their property portfolios go pear-shaped, even in a country of people who are historically accustomed to authoritarian rule, from the centuries of Emperors, through Mao, to the modern day CCP.

- If you get up and go to work, you're working class. You may hide behind the middle class badge because you know your claret from your beaujolais but you're still flipping peasants as far as I can see!

Of course, if they were to glance over here and see how much power people really have in our Western "democracies" they may decide that being told how they can spend their money is not so bad after all.

- Have you just realised that we aren't really free? They're the bad guys, we're the good guys - childish nonsense fed to you from an early age.

It never ceases to amaze me that those people who extol the regimes of countries which seem to hold the same ideals as them, have never lived in those countries and experienced those regimes first hand. I'm sure that National Socialists in the UK, during the 1930's did exactly the same regarding Germany and Italy.

Workers_Unite : you remind me of David Cameron. Plenty of hot air, meaningless rhetoric, but nothing factual. I suppose you are what you eat?

PS keep digging with that sickle of yours. You might end up in China yet ;-)

Well thats nice then.

And it was a trip.

Reading the comments from your regular contributors on this and your previous blog, I have to agree with Andrew Marr's recent comments when he said:

"Most citizen journalism strikes me as nothing to do with journalism at all. A lot of bloggers seem to be socially inadequate, pimpled, single, slightly seedy, bald, cauliflower-nosed young men sitting in their mother's basements and ranting. They are very angry people. OK – the country is full of very angry people. Many of us are angry people at times. Some of us are angry and drunk. But the so-called citizen journalism is the spewings and rantings of very drunk people late at night.

It is fantastic at times but it is not going to replace journalism. Most of the blogging is too angry and too abusive. Terrible things are said online because they are anonymous. People say things online that they wouldn't dream of saying in person.

Wonder which of your regular contributors he could be referring to?

If all of the buildings and the like are bought for cash what effect does that have on the banks? Are the investors only the ones exposed to the fall in value? Or because the cash has gone into builders pockets a problem?
I seem once agin to have missed the point, The borrowing is less so what is the problem with an internal money supply issue. We, the west give China work, materials and orders they spend the money in China on buildings Or am I being too simplistic?
Should we in the west just build and make stuff ourselves if this all a problem?

Too many questions here and no answers, just like life

Robert,

I disagree slightly.

The primary driver for the bubble bursting in the UK was the almost perverse use of leverage by our banks to offer fluidity to all, including those least likely to be able to pay. An egalitarian concept, yes, but that failure to pay led to the snowball and avalanche we have now all needed to endure.

If, however, property acquisition was based primarily from savings (rather than leverage), as alluded in China, then perhaps the biggest risk (even if biggest product) banks had is no longer applicable there.

The secondary driver for the bubble bursting in the UK was speculation. And specifically, the dependence leverage products (ie: mortgages) had with speculation (ie: housing prices rising). Business cases were written with this assumption, and business models were implemented with this constraint. This was a very British/American problem.

Thus, even if speculation were to enter the Chinese market, few of the caustic conditions are in place which lead to the events the UK has needed to suffer. In other words, mortgage products would need to be linked and dependant on housing prices rising.

But perhaps the bigger point is to do with speculation itself; this seems to be a marketing ploy primarily used in UK, US, Australia, and the like. This does not seem rampant in other like markets, such as Scandinavia, where housing prices are relatively static.

Thus, we are assuming that China will adopt a specific derivative of Anglo-Saxon thinking, as opposed to other solutions available. Or put another way, why would they copy us?

Ultimately, the current housing 'supply' is just that - supply. Free market thinking means that China possibly risks oversupply in relation to demand - but this means China adopts a free-market view of its world!!!

I remain sceptical!

This comment was removed because the moderators found it broke the house rules. Explain.

39. At 11:05am on 10 Nov 2010, Sam_From_Hendon wrote:
Reading the comments from your regular contributors on this and your previous blog, I have to agree with Andrew Marr's recent comments... Wonder which of your regular contributors he could be referring to?
----------------------------------------------------

Try looking at the comments posted on Daily Mail, Guido and many US blogs etc. if you are looking for ranting.

I have always felt that BBC blogs are well moderated (even when I fall foul of the moderators) and we therefore have very little spite coming through.

What would be the point of a blog if all comments came from a single perspective?

There are of course many blogs on the internet that cater for the blinkered who cannot handle reading anything that would challenge their thoughts. There is no point in anyone with an enquiring mind visiting these sites except very occasionally to be aware that they exist.

In the UK a bursting property bubble would have an enormous impact; in Ireland and the USA it did have an enormous impact. However, I don't see why it would be any like as important in China if the properties were bought for cash and no-one lives in them!

Oh, and #39, love the comment from Andrew Marr! I doubt if he had a particular 'citizen journalist' in mind as it is a common phenomenon.

#39 Sam_From_Hendon

I was going to complain about this comment, for being off topic, however as it could just as easily apply to you I changed my mind.
As you point out Mr Marr stated,

"But the so-called citizen journalism is the spewings and rantings of very drunk people late at night."

For someone who posted the following, the term "kettle calling pot black" comes to mind. As it was posted at 3.36pm it must have been one hell of a bender you were on the night before????


...ladies and gentlemen of this blog. I have one final thing I want you to consider. Ladies and gentlemen, think of Chewbacca. Chewbacca is a Wookiee from the planet Kashyyyk. But Chewbacca lives on the planet Endor. Now think about it; that does not make sense! [If you don't know who Chewbacca is then google him.]

Why would a Wookiee, an eight-foot tall Wookiee, want to live on Endor, with a bunch of two-foot tall Ewoks? That does not make sense! But more important, you have to ask yourself: What does this have to do with this response? Nothing. Ladies and gentlemen, it has nothing to do with this response! It does not make sense! Think about it, I'm a blogger (a professor in economics actually but also a blogger) replying to an idiotic blog calling for a revolution and I'm talkin' about Chewbacca! Does that make sense? Ladies and gentlemen, I am not making any sense! None of this makes sense! And so you have to remember, when you're in that read all these blogs, do they make sense? No! Ladies and gentlemen of this blogosphere, it does not make sense! If Chewbacca lives on Endor, you must accept that there will be no revolution!

Sam_From_Hendon and Kit Green....I couldn't agree more. Blogs should be about the subject matter NOT an opportunity for some 'Billy(Barbara?)-no-mates' to rant and rave and try to convince everybody else that their narrow minded opinions are the only opinion worth having. That having been said, my concern is that when the poor masses note that the 'neuvo rich' have denied them a decent roof over their heads, they may just try to take matters into their own hands. And with the enormous firepower that is in the hands of the ruling elite only mass pain and suffering can follow. Not a pretty prospect but one neverless.

# 47 "The primary driver for the bubble bursting in the UK was the almost perverse use of leverage by our banks to offer fluidity to all, including those least likely to be able to pay"

Complete rot. The bubble burst when Brown mortgaged the entire country to bail out, what, 3 near-bust banks? That was enough to scare the living daylights out of every UK company and individual who would otherwise buy things and thus keep the economy kindof alive - that's what's really burst the bubble. Now cue massive public sector job cuts, more terror.

GC

Sam_From_Hendon:

You forgot one notable point - renaming yourself to Sam_From_Daily_Mail!! ;-)

One day a salesman knocked on my neighbour’s door:
“Excuse me, madam, would you like to buy our newest products? Oh, by the way, you look so ugly today!”

FACT: China is NOW booming while US and UK (among others) have NOW busted!

3. At 08:46am on 10 Nov 2010, Baz

Wake up Baz - you're reading from the 'Free market Capitalism' manual which is full of holes.

If your ideas about empty properties being filled through falling rates - and that people are not 'fiscally stupid' - then why in our capitalist economy are there 500,000 empty homes?

They all have a cost to the owner(council tax, water rates, standing charges etc) - and yet they are in no rush to fill them.

...it's because the people that own them can 'afford' to allow them to sit empty - only the imbalance of wealth can produce this situation - they are subsidising the empty properties through 'other investments' - and since those other investments represent an environmental or labour surplus - then effectively some poor souls are working hard out there to actually subsidise a house staying empty!

...that is the reality of the situation - market theory is no good in the real world.

9. At 09:13am on 10 Nov 2010, Steve wrote:

"China is one massive Enron of shady accounting, of course it's going to crash, and one massive crash at that, the biggest collapse in modern history, it's just a matter of time, a year or two at most."


...so it's true - they are learning from the west!

39. At 11:05am on 10 Nov 2010, Sam_From_Hendon wrote:

"I have to agree with Andrew Marr's recent comments ..."

I find it interesting that you feel you have to agree with this and express your views in a blog of all places.

Given that you agree with ...

"Terrible things are said online because they are anonymous"

and ...

"A lot of bloggers seem to be socially inadequate, pimpled, single, slightly seedy, bald, cauliflower-nosed young men sitting in their mother's basements and ranting."

I would be led to infer that you agree anonymity prevails within online contributions to blogs such as this one. The one condition for this is that contributors have little or no evidence of the identities of other contributors, let alone their appearance, accomodation arrangements or actual social inclinations beyond those that they choose to reveal to others.

So, unless a lot of contributors to this blog have chosen to reveal all of these things to you - something that I certainly haven't been aware of - or you just happen to know them personally, then I would suggest that the only information you can authoritatively base your sentiments on is a knowledge of yourself (and your multiple 'personalities'), the only contributor(s) to this blog that you actually know.

Otherwise you just seem to have made wild, baseless and unfounded assumptions without offering any supporting evidence in order to take a cheap shot at other contributors.

Although on very rare occasions I find that I tend to agree with your sentiments, this second explanation sounds like it could describe the majority of your postings on here.

47. At 12:13pm on 10 Nov 2010, Guy Croft wrote:

# 47 "The primary driver for the bubble bursting in the UK was the almost perverse use of leverage by our banks to offer fluidity to all, including those least likely to be able to pay"

Complete rot. The bubble burst when Brown mortgaged the entire country to bail out, what, 3 near-bust banks? That was enough to scare the living daylights out of every UK company and individual who would otherwise buy things and thus keep the economy kindof alive - that's what's really burst the bubble. Now cue massive public sector job cuts, more terror

Guy Croft:
Think outside the political bubble. Brown did mostly what the Treasury recommend him do - and as distasteful as it may be, the action he took stopped a far more catastrophic collapse. Sorry to break it to you, but it is a fact.

The root cause of the mess was the bank themselves. Not the bailout.

The sheer paranoia that gripped the banking sector was impressive - akin to the Soviet Union in the 80s - most of which driven by the American decision to allow one of their banks to fail... That decision lead to some of the most surreal decisions and events I frankly have ever witnessed or experienced - it was run on pure emotion and fear - until Brown stepped in to halt the rot.

Perhaps one day you might dare stick you head above the parapet and thank him?

13. At 09:28am on 10 Nov 2010, Steve wrote:
QE will undermine the China currency, the only way to combat it is for China to create cash out of thin are, the US prints $1 trillion, so too will China, eventually the whole rotten structure of the global economy will collapse.
----------------------------

China will crash indeed but don't hold your breath yet.
It all depends how quickly they will adopt (or be forced to adopt) western LIBERALISM. Cameron has already started the rhetorics.

And even if/when they do, they'll have another 20 years at least before they go into DECADENCE, the phase we're in.

BUT culturally China is not the West, they are even a different race, so like I said, don't hold your breath yet!

The crash is first coming in the cinema near you ...

In a centrally planned economy you cant expect perfection. There are bound to be mistakes made. The difference is that they have all the levers to fix the problems. They will simply force through changes that sort the problem, in a national sense, if it provides a better result overall. The ability to make changes here is limited, and hindered by self interest of those at the top of the food chain. I wonder if the Chinese economic model still is based on Marx, however, there is a challenge.
https://www.debtdeflation.com/blogs/wp-content/uploads/papers/Keen_Marx_Thesis.
This is complicated. Perhaps WOTW could give us some feedback. Note: this is a P retty D,arned F.ine link.

20. At 09:56am on 10 Nov 2010, Workers_Unite wrote:

1. At 08:18am on 10 Nov 2010, J__Hobson wrote:

"The solution to dictatorial socialism is democratic socialism not capitalism.

- We don't need leaders whether they're dictatorial or democratically elected. In some ways the former is better as deomcratically elected leaders aren't really chosen by the people - it's just an illusion.

What we need is no government. I know the capitalists will be blogging that we need a government but that is only to keep them in their priviledged positions whilst others do all the work for them."

*****************************************
If only the real life was that simple we could all dream up the most wonderful ideas on the way the society could conduct itself (though guess what - amazing as it sounds no idea would be identical...How do you reconcile that? You don't implement anything as there is no consensus?).

Sadly, even the best intentioned ideas whenever implemented in practice tend to be hijacked by populists with only one concern in their mind - how to retain power for themselves. Those who ignore human weaknesses are no different to all those flawed economists (oft criticised here) who ignore the underlying facts that do not fit their theories.

For examples of well intentioned ideas going down the pan -just look at the history and present times in Latin America. Go figure.

16. At 09:38am on 10 Nov 2010, stillpuzzled wrote:

"Sounds like a great place for WOTW to try out his 'advanced human' form of altruism. you know, "from each...to each..." sort of thing."

...as opposed to the very fair and sustainable "I do squat and you run around like a minion serving the debt I have generously advanced to you"

"It is often said that self-interest is human nature."

...only by religion and fools.

"(According to most evolutionists it is the nature of nature itself. The driving force of all life.) But WOTW has apparently evolved beyond that."

Which evolutionists? - can you name 'them'? I can't help it if you participate in the "world is flat" community - it's not me that's advanced - it is you that is backward!

"Which appears to be why socialism has always had to be enforced on the population. And when the restraining hand is removed..."

...well do you think the ruling class are going to 'hand over the dough to the poor'? - I mean that's what's supposed to be happening now in the 'trickle down' economy - not going so well is it?

"Anyway, to the point."

...there's a point? - I thought you were merely telling us that you're some sort of god fearing peasant!

"If there is a repeat of the old "enclosures acts" process in China, and a subsequent urbanification, what will they do with the peasants?"

...probably the same as they do here - leave them starving on the streets.

"The same question faces all modern societies...in an energy rich world, how do you extract useful labour out of the majority of humanity?"

You don't - you extract what you NEED and then we all go on a nice holiday.

"("Useful work", in thermodynamic terms, is energy that has an effect other than being dissipated as heat.)

In mushroom's economic dictionary "useful" means 'work that adds value to assets'.

(As an aside, "Consumerism" is dissipation of stored value, and can be considered the parallel of inefficiency in a thermodynamic cycle. Spend money, play, throw away!)

In the era when Britain had pots of money, people built "follies". In China they build cities. At least you can live in an apartment block."

...that's centralised control for you - everyone in East Germany had an apartment block to live in - now the homeless litter the streets so that the 'super wealthy' can adorn themselves in trinkets bought with unearned wealth.

47. At 12:13pm on 10 Nov 2010, Guy Croft wrote:
# 47 "The primary driver for the bubble bursting in the UK was the almost perverse use of leverage by our banks to offer fluidity to all, including those least likely to be able to pay"

Complete rot. The bubble burst when Brown mortgaged the entire country to bail out, what, 3 near-bust banks? That was enough to scare the living daylights out of every UK company and individual who would otherwise buy things and thus keep the economy kindof alive - that's what's really burst the bubble. Now cue massive public sector job cuts, more terror.

GC

>>>>>>>>>>>

Guy, what evidence do you have to prove this? The credit bubble burst and then Gordon had to bail out the banks to prevent them going bust. Why would he bail out sound banks? Your not making sense.

34. At 10:32am on 10 Nov 2010, Workers_Unite wrote:

"- If you get up and go to work, you're working class. You may hide behind the middle class badge because you know your claret from your beaujolais but you're still flipping peasants as far as I can see!"

I always say - if you're worried about getting sacked at the moment - then you're working class.
The middle class does not exists, it's just a way of pretending that you are somehow 'favoured by the master more than the others' - but the reality is you'll be gone like the rest if the owner decides that's what's best for profit.

47. At 12:13pm on 10 Nov 2010, Guy Croft wrote:

'The bubble burst when Brown mortgaged the entire country to bail out, what, 3 near-bust banks? That was enough to scare the living daylights out of every UK company and individual who would otherwise buy things and thus keep the economy kindof alive - that's what's really burst the bubble. '

I think you have your cause and affect backwards.

1There was a credit bubble.
2When the sub-prime bomb went off (due to energy price inflation and rising interest rates) the banks became illiquid/insolvent/bankrupt.
3Credit bubble well and truely burst!

It was after this that the banker bailout happened.

Even without the banker bailout (Lehman collapsed) confidence would have been lost...

22. At 09:59am on 10 Nov 2010, NorthSeaHalibut wrote:

"That only applies John if the society you live in is preoccupied with home ownership"

Spain's and to a lesser extent France's property bust has obviously passed you by then?

I understand what you are trying to say but I think you'll find that property is well overpriced in most of Western Europe not just here - and has boomed in much of Eastern Europe too. Interest rates too low for too long were just too much of a good thing. The decision to give control of rates to the BoE and have them set them against CPI we go down in history as one of the worse economic decisions made. Europe made the same mistake too - and as for the Fed...........

Good luck with selling up btw.

35. At 10:38am on 10 Nov 2010, Baz wrote:

"It never ceases to amaze me that those people who extol the regimes of countries which seem to hold the same ideals as them, have never lived in those countries and experienced those regimes first hand. I'm sure that National Socialists in the UK, during the 1930's did exactly the same regarding Germany and Italy."


...and they probably look back across here and say "but these people actually believe they are influencing Government (through voting) when they clearly aren't
...at least they know where they stand - the human rights record of the west is no better than that of the chinese in most cases. They know they're prisoners of the state - you don't....yet.

I didn't visit the Eastern Bloc - but many of my friends have - and the stories they tell are not as exaggerated as the stories that are told on their behalf. They can't even make up their mind which regime is better - prisoners of socialist nationalists or prisoners of capitalist debt.

...come back in 5 years and tell me how much better a system of Government we run...

39. At 11:05am on 10 Nov 2010, Sam_From_Hendon wrote:

"Wonder which of your regular contributors he could be referring to?"

Sam - I already brought this up 2 weeks ago! clearly you're not as 'ahead of the curve as you think you are (or it's just the wrong curve)

As I said at the time, Andrew is just a little scared because all that university time and debt appears to be wasted as most people have stopped listening to the media since they found out they're all owned by the same people and they only regurgitate press releases anyway.

...still - that's what you like to hear isn't it? - not investigative journalism - but soothing words of recovery from your corporate masters.

Can't see any though - could it all be Jackanory?

41. At 11:27am on 10 Nov 2010, rowerdave1 wrote:

"The primary driver for the bubble bursting in the UK was the almost perverse use of leverage by our banks to offer fluidity to all, including those least likely to be able to pay. An egalitarian concept, yes, but that failure to pay led to the snowball and avalanche we have now all needed to endure. "

Talk about wrong end of the stick!

How can issuance of debt be 'egalitarian'? - clearly you don't understand debt at all. It doesn't equalise - it does the opposite - or did you think it was a coincidence that uneven wealth distribution has moved to an all time record during the time of greatest debt issuance.

..next you'll be telling us the banks did it in order to 'set us free'!

So China has massive problems too - whatever the end game it is unlikely that China will become as dominant as people seem to think - important for sure but not dominant in the way the US once was.

On many levels it's incredibly dysfunctional - as Robert outlines in his blog.

We in Britain may be happy to sit back and China grow in some cases at our expense - the same will not be true of Russia, Japan and India - who will not want China to become the over dominant power in Asia - intra Asia tensions will be more likely than China vs the West.

47. At 12:13pm on 10 Nov 2010, Guy Croft wrote:

"Complete rot. The bubble burst when Brown mortgaged the entire country to bail out, what, 3 near-bust banks? That was enough to scare the living daylights out of every UK company and individual who would otherwise buy things and thus keep the economy kindof alive - that's what's really burst the bubble. Now cue massive public sector job cuts, more terror."

Guy, conpared to what the EU take every year, and the myriad of restrictions placed on the UK because of our membership, I would rather bail out the banks any day.

Anyway, back on topic.

The chinese culture is vastly different to ours, as is the Indian and even some European cultures - just look at some of the HSBC adverts that show this - and so it will be difficult to try and impose our ways on them. The question is, do we want to? We had the Japanese manufacturing ways put on us and, whilst a success in a few places, the overall culture that is needed for those ways to be successful do not exist and that is why we have never got things like Just In Time processes correct.

However, for successful trading with the West, they will need to look at compromises such as not jailing someone for exposing a milk scandal, not accepting bribes at all levels of local and national government, not constantly threatening Taiwan with invasion etc

43. At 11:39am on 10 Nov 2010, Kit Green wrote:

"What would be the point of a blog if all comments came from a single perspective?"

Why not - the news already is.

I'll give it a go.

"Clearly Merv is a star and knows exactly what he's doing, my buy to let property was going to fail - but fortunately the interest rates have been lowered and now I'm making a huge profit - and all with free money and no consequences - these bankers shoudl all get a massive pay ris....."

Sorry, I just can't do it - I cannot conform with the nonsense that is spouted by some on here. At least I tried though.

Is Robert really in China or is he in a warehouse (moon landing)?

35. At 10:38am on 10 Nov 2010, Baz wrote:

It never ceases to amaze me that those people who extol the regimes of countries which seem to hold the same ideals as them, have never lived in those countries and experienced those regimes first hand. I'm sure that National Socialists in the UK, during the 1930's did exactly the same regarding Germany and Italy.

Baz:

Cannot agree more.

PS Don't forget to include those regimes practising Orwellian Animal Farm...

45. At 11:57am on 10 Nov 2010, creditunionhero

Classic - at least I'm not a star wars freak living in my 1 bed flat in Hendon with posters of the Swiss alps all around me!

If Andrew Marr thinks he's bad - I'll go on his boring Sunday morning show and demonstrate to him why journalists are virtually worthless.

I listened to (I think John Humphries) get walked all over by the representative of ATOC on the radio - it was pathetic to see all the 'mis-truths' the rep said and John didn't pick up on one of them.

...had he done his research then he might have asked this pertinent question in response.

"..you say that 'experts in rail' are better placed than Beaurocrats to make decisions about the railways - but how can they make long term strategic decisions which are good for the country when all the rolling stock is owned by the BANKS in an oligopoly designed to fix prices?"

https://en.wikipedia.org/wiki/ROSCO

...now I wouldn't have missed an opportunity like that - what a shame the experienced JH did.

This is why they get away with it - the journalism is about as threatening as a 2 year old with a foam stick!

46. At 11:58am on 10 Nov 2010, Baz wrote:

"Sam_From_Hendon and Kit Green....I couldn't agree more. Blogs should be about the subject matter NOT an opportunity for some 'Billy(Barbara?)-no-mates' to rant and rave and try to convince everybody else that their narrow minded opinions are the only opinion worth having. "

...are you referring to your misunderstanding of markets in 3? I think that fits nicely into that category.

I was in China about eight years ago and there was a big corruption trial involving a top govt. official going on, needless to say it hadn't been reported much in the West. I arrived on the Monday, they stopped the trial on the Tuesday, found him guilty and shot him on the Wednesday.I was then told by a local that his family would be charged for the cost of the bullet which killed him. It kinda makes you wonder what the Chinese governments' attitude towards bankers who make unwise investments will be, maybe that's why China is doing so well as there's nothing like fear of failure to motivate. I got the impression that the Chinese weren't all that interested in the rest of the world, whether that was censorship or dogma I couldn't fathom. What I did see was buildings going up 24/7 and virtually no health and safety regs. on site. Mind you you have to admire them as in 5 weeks they completely rebuilt a street much to the embarrassment of our guide who admitted it had been completely different from his visit 5 weeks before and he didn't recognise it. What we were told was not to mention human rights or Tibet as as far as the Chinese are concerned no matter what anyone may say Tibet belongs to them and is classified as an autonomous region. As for mentioning human rights that was a complete no no as activists were portrayed in the media as ant- Chinese. Thing is in a country where the govt. owns all the land you can move people off it when you feel like, case in point the Three Gorges Dam project and the bulldozing of areas of Beijing to make way for the Olympic bid. I've still got some govt. pamphlets I picked up which say that both these projects were good things and nobody objected to them. I don't think they'll be remotely interested in anything our Dave has to say about their human rights record, though they'll make all the right noises. Anyway Dave won't rock the boat too much as lets face it we need them more than they need us.

...and Andrew Marr wants to hold his tongue....

"A lot of bloggers seem to be socially inadequate, pimpled, single, slightly seedy, bald, cauliflower-nosed young men sitting in their mother's basements and ranting."

...the only one that's nearly true is bald - although not yet - all the rest of these claims couldn't be more wrong.
I reckon he's just jealous because he knows I get paid more than him - and I do half of his job (properly) on my lunch break!

57. At 12:44pm on 10 Nov 2010, Ian

Are you still here?

I would have thought you would be banging rocks together trying to work out if it's "nature or nurture" - and of course whether thunder means "god is angry with you Ian"

61. At 12:51pm on 10 Nov 2010, newblogger wrote:

"I think you have your cause and affect backwards."

...must be a monetarist!

#53 ScepticalMonkey

I agree with most of what you say with this post.

Whilst researching your earlier posts I found this:

on 09 Jul 2010, ScepticalMonkey wrote:

- the most ethical bank in the world -

How about one that actually gives you a choice whether you want to take part in the giant ponzi scheme or not?

Give me a 'bank' where I can pay a small sum monthly for the administration/management but have the option of (any combinations of the following) ...

(1) leaving my deposit dormant in my account earning no interest, but under no circumstances being lent out by the bank to increase the money supply, increase their profits (and bonuses) and decrease the real value of my deposit - so basically a risk free holding account that I can use to pay for my day-to-day outgoings that is legally seperate from the rest of the business, 100% guaranteed by the government

(2) getting paid a low risk premium for allowing my money to be invested in 'low risk' instruments such as government bonds (implicitly 100% guaranteed by the government)

(3) getting paid a reasonable risk premium for allowing my money to be lent out through simple, low risk savings and loan operations, but with transparency/visibility of the profit and loss of this side of the business and the payroll/salaries/bonuses of those that manage this, so I can move everything back to (1) if I consider I am getting fleeced - guaranteed up to £35k by the government
----------------------------------------------------------------------
Although off post, if I have not suggested before you could look at a Credit Union account. It would fulfill most of the above requirements.
Most Credit unions do not charge for membership and all are "not for profit".

Just a thaught.

65. At 1:02pm on 10 Nov 2010, writingsonthewall wrote:

Talk about wrong end of the stick!

How can issuance of debt be 'egalitarian'? - clearly you don't understand debt at all. It doesn't equalise - it does the opposite - or did you think it was a coincidence that uneven wealth distribution has moved to an all time record during the time of greatest debt issuance.

..next you'll be telling us the banks did it in order to 'set us free'!

writingsonthewall:

Egalitarian does not mean good - it means equal - and the banks offered credit to all, even those with dire credit ratings. Please do not take out of context. I doubt you would be the only person in Britain not to have been offered credit, in one form or another?

Your issue is of morality - and from that context many would agree with you, I am no fan of bankers either. But capital is a necessary function in present society until a better system is thought of.

67. At 1:06pm on 10 Nov 2010, yam yzf wrote:

"The chinese culture is vastly different to ours, as is the Indian and even some European cultures - just look at some of the HSBC adverts that show this"


...oh so that's the source of your insights - that explains everything..

70. At 1:12pm on 10 Nov 2010, rowerdave1 wrote:

"PS Don't forget to include those regimes practising Orwellian Animal Farm..."

...oh jeez - it's another cartoon ideologist. I hope you haven't watched Ice age and think global warming is a myth!

63. At 12:56pm on 10 Nov 2010, writingsonthewall wrote:

“I didn't visit the Eastern Bloc - but many of my friends have - and the stories they tell are not as exaggerated as the stories that are told on their behalf. They can't even make up their mind which regime is better - prisoners of socialist nationalists or prisoners of capitalist debt.”

My point throughout. Unless you lived in there you have absolutely no idea. Visiting inside the comfortable air-conditioned coach, with meals brought to you by the waiters at foreigners-only hotels, priority entrance everywhere and being shown only the best bits by well trained-in-propaganda guides tend to cloud your perspective a little. The only inconvenience – your “fiat” money forcibly exchanged at vastly inflated rates into the “real socialist currency”.

But please - don’t just rely on my opinion on this here; as some people already mentioned that is “only an opinion of a blogger". What do I know about real life after all? Go to North Korea yourself (the only remaining “true socialism” country in the world) and try to explore that place by yourself. Just don’t send out desperate pleas to our "enslaving" Capitalist government to extricate you from a grimy prison somewhere near Pyongyang...

Anyway Robert.

Why waste your time following that Arsenal/Newcastle rubbish.
Get youself over to Eastlands for the kick off and watch a proper game of football, MCFC v MUFC. [Personal details removed by Moderator]

Before anyone complains RP started it, not me!

58. At 12:45pm on 10 Nov 2010, writingsonthewall wrote:

"...that's centralised control for you - everyone in East Germany had an apartment block to live in - now the homeless litter the streets so that the 'super wealthy' can adorn themselves in trinkets bought with unearned wealth."

Ah, that is why some million East Germans (total population = 17m) swamped the Austro-Hungarian border in 1989 to get to West Germany as soon as it was opened? The only reason the whole East Germany did not decamp there was they pulled down the Wall...

Silly me, so logical! Mystery of communism answered!

Could anyone at the BBC please explain how a Boeing 767-200 airbus came to be flying at 550mph (NIST) at 700 feet altitude? Boeing insists the wings fall off at 420mph at this altitude. The assistant director of NASSA recently commented 'that is the elephant in the room that nobody is speaking about'.Thank you.

I tell you what they don't have in China - failures that go unpunished!

https://bbc.kongjiang.org/www.bbc.co.uk/news/uk-11726734

...and people actually think they're free - HA - you're all expendable for profit, if you haven't worked that out by now then you never will...

78. At 1:24pm on 10 Nov 2010, rowerdave1 wrote:

"Egalitarian does not mean good - it means equal"

I know what it means you banana!

You said:
"The primary driver for the bubble bursting in the UK was the almost perverse use of leverage by our banks to offer fluidity to all, including those least likely to be able to pay. An egalitarian concept, yes, but that failure to pay led to the snowball and avalanche we have now all needed to endure. "

...which implies that banks lending was with the view of ensuring equality of wealth....which is not what debt does.

"- and the banks offered credit to all, even those with dire credit ratings. Please do not take out of context. I doubt you would be the only person in Britain not to have been offered credit, in one form or another?"

They're falling over themselves to lend me money (or they were until the credit crunch came along) - lending has nothing to do with equality - it's all about inequality - BASIC's dear boy, BASICS.

"Your issue is of morality - and from that context many would agree with you, I am no fan of bankers either. But capital is a necessary function in present society until a better system is thought of."

I have no issue with morality - my issue is that you seem to think that banks lending to everyone is in an effort to equalise wealth, like some sort of noble bank gesture (egalitarian) - but actually it does the opposite.

"...that's centralised control for you - everyone in East Germany had an apartment block to live in - now the homeless litter the streets so that the 'super wealthy' can adorn themselves in trinkets bought with unearned wealth."

Having travelled to the former East Germany I know this to be true. If you ask the people whether they preferred the socialist or capitalist model they generally fall into two categories:

1) Those people over 40 who recall the old communist East Germany with fondness and remember it as being a good place to live, where the basic commodities were plentiful and cheap although luxuries (and occasionally freedom) was scarce.

2) Those under 40. After the fall of the Berlin Wall, most younger people seem to have left to find well paid jobs in West Germany, so it is very noticeable that there are not too many young people living in East Germany right now. However, this is likely to change as people lose their jobs in the West and return to their roots. (Contrary to popular belief, East Germany is an extremely beautiful place.)

In short, my gut feeling is that many people really do miss the old socialist way of life and regret changing over to the capitalist model, despite its many benefits.

@78. At 1:24pm on 10 Nov 2010, rowerdave1 wrote:
"I doubt you would be the only person in Britain not to have been offered credit, in one form or another?"
During a period of redundancy some years back I remember NatWest sending me some junk mail asking me if I wanted a special NatWest black credit card (APR ~50% I believe), compared to my existing credit card of ~25% APR. Looking through the T&Cs of NatWest's Black it seemed I would've been paying for something resembling what could be considered a status symbol, rather than anything practical, and that I could fearlessly wield it like Del Boy's filofax (though perhaps without the comedy factor).
Needless to say I declined their offer for many valid reasons. During my time subsequently in full-time professional employment (design engineer) I haven't been offered one. I wonder why.
The way credit is offered in this country can at times be somewhat skewed.

#73 Mailman

The Chinese solution to someone found guilty of corruption seems pretty fair to me!

Just give it a bit more time and we might be able to legislate for the same thing here and put the bankers against the wall, although the way things are going in Ireland at the moment I think that they may well beat us to it!

80. At 1:28pm on 10 Nov 2010, writingsonthewall wrote:

...oh jeez - it's another cartoon ideologist. I hope you haven't watched Ice age and think global warming is a myth!

writingsonthewall:

The book written in 1945. Not the 80s movie. Otherwise, it's not clear what outcome you're getting at here?!

Credit to Brown for 'stopping the rot'? Bailing out failing businesses? Where was this 'herald of macroeconomics' when MG Rover went down? Took advice from the Chancellor? He WAS the Chancellor when all this was building up and we've all been told on TV that he knew that it was coming!

He just didn't HAVE the money to prop up those banks, he borrowed it - that was his fatal error.

GC

" 79. At 1:24pm on 10 Nov 2010, writingsonthewall wrote:
67. At 1:06pm on 10 Nov 2010, yam yzf wrote:

"The chinese culture is vastly different to ours, as is the Indian and even some European cultures - just look at some of the HSBC adverts that show this"


...oh so that's the source of your insights - that explains everything.."

Top quality comment with well reasoned response to the entire posting.

We do not all have time to read the web everyday so, as most people see adverts on TV/Posters/newspapers, this is probably something that most readers of this blog have seen and can relate to

Wow, must be great to spend all day doing nothing but research links....

...and if you put on the TV you'll see the coverage of the 'not revolution' live at Millbank.

I'm on a half day today to go and join them - it's much better to be on the streets fighting for freedom than sitting at a desk working for slavery!

So the wealthy Chinese are buying their properties with cash and the bubble might burst.

Too bad but at least it is they who will lose their own money and leave a whole load of cheap properties for the government to take over and house the poorer peasants so they have somewhere to live and more scope then to build more factories with a ready made labour force on the doorstep.

Isn't that what our philanthropists did in the nineteenth century.

Better than leaving the threat of trillions of debt hanging over the next generation who are too busy at the moment protesting about student fees that won't even affect them.

Ten trillion pounds was mentioned on one popular programme last night.

Does that not put it all into perspective?

#82

This post can only have been removed due to BBC bias against a well known (to me at least)football team from Manchester that play in Blue.

RP stated it with his reference to " Flappyarmski v Andy Carroll" at the top of this blog.

I can't be identified from the description of the location of my seat in the ground and I wasn't trying to bribe said journalist by inviting him to watch a "proper" game of football, he would not make kick-off in time anyway.

People had to actually have money to purchase housing. I am sure the financial services and banking industry will want to go to China and "teach" them modern banking methods. Capitalism will not tolerate honest lending and collateral. Where will the millions in fees come from? Actually this report shows that free market investments are in place in China...it is the investors and not the taxpayers who must deal with the empty housing..The Chinese have had a corrupt business/political model for thousands of years and do not need lessons in corruption from the West. As the failure of the Western model is evident there just might be a better way to conduct business and banking. It is remarkable that the Western governments go to Asia and pretend that the economic collapse they caused should not be considered.

92. At 1:58pm on 10 Nov 2010, yam yzf wrote:

"Wow, must be great to spend all day doing nothing but research links...."

Knowledge is power my fiend.

97. At 2:33pm on 10 Nov 2010, writingsonthewall wrote...

Still at work, WOTW? While your fellow revolutionaries smash windows and set fire to things elsewhere? Shameful.

86. At 1:45pm on 10 Nov 2010, writingsonthewall wrote:

"Egalitarian does not mean good - it means equal"

I know what it means you banana!

writingsonthewall:

Is that a yes?? (or should I be reassured that I am not a vegetable? Clarity, man, clarity. You're sounding like a cheap Cameron...)

Let's get back to the point and issues highlighted in recent contributions:


1/ Our foray in China is an interesting one; smacks of desperation more than strategy or intelligent thought. Please re-read some of my earlier contributions as to why.


2/ The conditions for maintaining and running a business in the UK are akin to the class based system (which itself is unacceptable, what constitutes a second class business, let alone a second class human?) - many small businesses are literally to the wall, yet many big businesses pay little tax, are allegedly caught up in highly illegal activities, and directly influence government policy - why?


3/ The last 100 years have taught us political dogma and economics do not mix well - either left or right.


4/ Adam Smith seems to be interestingly prophetic in linking morality with economics - for reasons we have all experienced recently. Why, and where to from here in this case?



So the critical question - at least from my perspective - is best for big business also best for Britain? If not, then why are we tolerating the same mistakes over the past 30 years to be repeated once again? What have we done in China to correct a dogma gone wrong? How does this help small business? Why are we risking IP and future revenue streams?

PS. I never ever recalled saying anything to the effect that banks create wealth, let alone apply it uniformly across the populace - Save the twisted rubbish for the local university communist rag...

The point made with egalitarism is something to do with irony - please re-read article!

And apply brain liberally if required!

77. At 1:24pm on 10 Nov 2010, creditunionhero wrote:

"Although off post, if I have not suggested before you could look at a Credit Union account. It would fulfill most of the above requirements.
Most Credit unions do not charge for membership and all are 'not for profit'"

Thanks creditunionhero.

You have indeed mentioned credit unions in previous blogs and I have since looked into these a little more. I have also since happened to take a look at Zopa (www.zopa.com) as previously mentioned by WOTW which appears to deal with points 5 and 6 of the particular blog entry to which you refer.

Incidentally it seems like most of the pieces of my original suggestion (irrespective of whether you consider the suggestion to be useful or not) are all out there in different places. Of course I am free to choose to use these services individually for the time being, but I guess it would just need someone to tie that all together into a single convenient and managable account in an online format, providing a link to the bookies to cover point (4) regarding casino banking, together with a decent framework for transparency for such a solution to be realised.