The Next Bubble in China’s Economy

We've battled this argument before, so we apologise if we repeat ourselves. But it needs to be said because the mainstream media continues to talk gibberish about China’s economy.

This is the argument: a falling inflation rate in China allows the authorities to ease monetary policy to avert a hard landing. Or, as today's Financial Review puts it:

China's government has been given room to ease credit policy further to bolster growth in the world's second largest economy after inflation fell to a yearly pace of 4.1 per cent in December.

The fall in the consumer price index from 4.2 per cent in November, down from a 37-month high of 6.5 per cent in July, is likely to increase Beijing's confidence that inflationary pressures are being brought under control while policymakers look to provide additional support to the economy as export demand slows and the housing market turns down.

This simplistic view fails to take into account complex monetary mechanisms of China's economy. Firstly, China pegs its currency, the yuan, to the US dollar. And because China’s economy runs a trade surplus with the US, it ends up with excess US dollars. To maintain the peg and stop the yuan from appreciating, the People's Bank of China (PBoC) must print yuan to buy these excess dollars. Read More

The Next War on Washington’s Agenda

Only the blind do not see that the US government is preparing to attack Iran. According to Professor Michel Chossudovsky, “Active war preparations directed against Iran (with the involvement of Israel and NATO) were initiated in May 2003.”

Washington has deployed missiles directed at Iran in its oil emirate puppet states, Oman and the UAE, and little doubt in the other US puppet states in the Middle East. Washington has beefed up Saudi Arabia’s jet fighter force. Most recently, Washington has deployed 9,000 US troops to Israel to participate in “war games” designed to test the US/Israeli air defense system. As Iran represents no threat unless attacked, Washington’s war preparations signal Washington’s intention to attack Iran.

Another signal that Washington has a new war on its agenda is the raised level of Washington’s rhetoric and demonization of Iran. Judging by polls Washington’s propaganda that Iran is threatening the US by developing a nuclear weapon has met with success. Half of the American public support a military attack on Iran in order to prevent Iran from acquiring nuclear capability. Those of us who are trying to awaken our fellow citizens start from a deficit that the minds of half of the US population are under Big Brother’s control. Read More

Independent Scotland would be 'humiliated' like Zimbabwe over pound

An independent Scotland would be humiliated like Zimbabwe by adopting a currency over which it has no control, a former Scottish Secretary warned yesterday.

Sir Malcolm Rifkind said Alex Salmond’s plan to keep the pound following separation would mean England having ultimate control over monetary policy, such as interest rates.

He compared the situation to the basket-case African nation of Zimbabwe, where the economy uses the US dollar as one of its currencies after its indigenous dollar was suspended three years ago.

Sir Malcolm, who also served as Foreign and Defence Secretaries, questioned whether Scotland would be truly independent. The EU could also force Scotland to join the euro as the UK’s opt-out from the single currency may no longer apply.

His intervention came after Alistair Darling, the former Chancellor, called the SNP’s proposals “ludicrous” as they would mean the Bank of England setting interest rates and borrowing limits in what would then be a “foreign” country with no reference to the needs of the Scottish economy. Read More

Isn’t it just as likely that Britain will hit the rocks and break up?

The Costa Concordia crew will no longer believe that stranger things happen at sea, writes Boris Johnson.

In the period immediately after the Costa Concordia hit a rock off the coast of Tuscany, the behaviour of the passengers and crew has given us all sorts of insights into the eternal glories and failings of human nature.

Perhaps the most symbolically pregnant gesture took place in the dining room. When the crockery started to slide from the tables, as the ship began to list, the waiters just picked it up and put it back. “It is nothing!” they said soothingly. “It is an electrical fault. Tutto va bene and what would madame like for the antipasto?”

It was less than an hour later, as the passengers have recounted, that the ship was like a scene from Titanic. There were people passing their babies to complete strangers. There were plates crashing from the shelves and people thudding into the walls and sliding down corridors suddenly slick with the incoming Tyrrhenian Sea. There were old men leaping into the cold and the dark, and women abseiling with firehoses, and elderly couples huddling in terror in their cabins. A hundred years after Titanic went down, we once again saw the spectacle of fit adult men apparently willing to inveigle themselves into lifeboats ahead of women and children. Some people probably behaved heroically, some disgracefully. As in that great 1912 disaster, there were hours in which the panic could ferment and the opportunities for moral weakness could become ever more abundant. It was a freeze-frame moment for the best and worst in our characters and, as with Titanic, there will no doubt be all kinds of myths and misrepresentations. Read More

Have We Reached Peak Stuff?

In England, new statistics show that its citizens have been using less and less of nearly every material good--even before the recession started. Are we starting to see a world where growth and consumption aren’t always inexorably linked?

The trajectory of modern civilization is essentially an exponential curve. Population, energy use, wealth, and a dozen other major indicators all follow a hockey stick of growth. After centuries of slow, mostly even growth, the curve appears to have gone vertical during the 20th century, doubling at an accelerating rate.

Yet could we finally start consuming less, not more, during this century? The British already seem to have achieved that milestone. Since 2001, material consumption, in categories from calories to aluminum, has steadily fallen. The statistics, reported by Chris Goodall, a former McKinsey & Company consultant and parliamentary candidate for Britain’s Green Party, are impressive, according to Yale Environment 360:

Since 2001, material consumption, in categories from calories to aluminum, has steadily fallen. Read More

The Rise And Fall Of Poverty Porn

It used to be that the best way to raise money for the developing world was to show the abject poverty that could be found there, but NGOs are finding that tactic no longer works. Instead, it’s time to focus on solutions.

The dramatic pseudo-orchestral music of '80s action-movie schlock begins. Arnold Schwarzenegger appears on the screen, and for the next three minutes gets progressively more bloodied, beaten, and battered as he fights to rescue his on-screen daughter. This isn’t a trailer for the movie Commando. It’s a narration by Alex, a precocious 9-year-old Tanzanian boy who is--as 9-year-old boys tend to be with violent movies--obsessed. The three-minute YouTube video cuts back and forth between Alex and clips from the movie, as he narrates every key plot twist, complete with action moments and sound effects. The irreverent joy of a child’s imagination is inescapable. Read More

Jilin City Beijing Liaison Office worker shows off wealth on Sina Weibo

January 12th, the displays of wealth on the verified Sina Weibo [microblog] account of “Jilin City Beijing Liaison Office worker Gao Yue’er” attracted netizens’ attention.

Gao Yue’er showed off the Chanel shoes, Cartier watch, Miu Miu purse, ’82 Lafite and other luxury items she had purchased while shopping. After this was exposed, Gao Yue’er quickly deleted her microblog posts as well as cancelled her verified identity status.

In response to this, the Jilin Municipal Party Committee Propaganda Department has stated that there is no such person at their Beijing Liaison Office.

Following Guo Meimei falling into the whirlpool of public opinion after showing off her wealth on her microblog, “Jilin City Beijing Liaison Office worker Gao Yue’er” also attracted the questioning of netizens for showing off luxury goods on her verified Weibo microblog.

January 12th, a netizen revealed on Weibo that “Gao Yue’er”, a “Jilin City Beijing Liaison Office staff member”, was at the moment showing off the results of her shopping in Macau, her luxury purchases including a 52,300 yuan diamond-encrusted Cartier watch, ’82 Lafite, Miu Miu purse, and Chanel shoes. After this netizens posted this, it immediately led to many netizens forwarding it. Many netizens jokingly called her “Gao Meimei”.

What was odd was that once she was exposed, “Gao Yue’er” quickly deleted all of her microblog posts that involved displays of wealth, changed the name of her microblog account, and cancelled her verified account status. In doing so, “Gao Yue’er” not only failed to quell the questioning, she attracted even more netizen attention to herself. Read More

4.6 Magnitude Earthquake LIBERTADOR O'HIGGINS, CHILE - 24th Jan 2012

A magnitude 4.6 earthquake has struck Libertador O'Higgins, Chile at a depth of 34 km (21.1 miles), the quake hit at 01:45:27 UTC Tuesday 24th January 2012
The epicenter was 78 km (48 miles) Northwest of Curico, Maule, Chile
No Reports of Damage or Injuries at this time.

4.5 Magnitude Earthquake KURIL ISLANDS - 24th Jan 2012

A magnitude 4.5 earthquake has struck the Kuril Islands at a depth of 60 km (37.2 miles), the quake hit at 01:40:22 UTC Tuesday 24th January 2012
The epicenter was 350 km (217 miles) Southeast of Vostok, Russia
No Tsunami Warning Issued - No Reports of Damage or Injuries at this time.

6.3 Magnitude Earthquake SOUTH OF THE FIJI ISLANDS - 24th Jan 2012

A magnitude 6.3 earthquake has struck South of the Fiji Islands at a depth of 582.8 km (362.2 miles), the quake hit at 00:52:06 UTC Tuesday 24th January 2012
The epicenter was 543 km (337 miles) Southeast of Ceva-i-Ra, Fiji
No Tsunami Warning Issued - No Reports of Damage or Injuries at this time.