from The Daily Bell:
Investors should focus on China’s economy, not stocks … there are some important reasons not to panic: China’s stock market reveals very little about the health of the country’s economy – it’s dominated by small savers who put more faith in speculative investing newsletters than economic fundamentals. – CNN
Dominant Social Theme: Don’t look at the problem. Think about the solution.
Free-Market Analysis: Oh, don’t look, don’t look at all! Just close your eyes and tap your heels together three times …
That’s what some of the coverage of China’s market failures reminds us of. Magical thinking.
We’ve been reporting on the hollowness of the Chinese Miracle for years. It became apparent to us long ago that China’s stated double-digit industrial growth year after year was bogus.
We wrote about it but few others did. Even when China began to build whole empty cities, most of the mainstream media was unconcerned.
There was a plan, we learned, to ship the rural poor to these empty urban environments. This was simply Chinese communist planning at its best. And this justification was trotted out even as the empty cities began to sprout mold.
We had a different idea. China’s growth, in our view, was a monetary phenomenon. Sure, China needed a lot of infrastructure and housing for its uneasily maintained population, but the driver of all this was the usual monetary madness.
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