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China’s Farmers Being Forced Into Cities
China’s Farmers Being Forced Into Cities
By Phil Davis of Phil's Stock World (originally published on Monday, 3-18)
The indexes were bouncing yesterday (Monday) morning!
Things didn't look too interesting earlier but now we've got our expected and predicted 0.5% weak bounce thanks to CHINA!!! unveiling their plan to push another 100M people into the cities by 2020. Did I say plan? More like insane scheme, actually.
While 100M may not seem like a lot to China, it's still 8% of their population – that would be like the US moving 8M families to the cities in 6 years. Imagine the chaos and upheaval, the strain on urban resources and the collapse of the rural areas they leave behind.
Still, only the good side is being seen by the markets and copper shot up from our bottom call at $2.925 to $2.975 (5%) in the 3 hours following the 3am announcement and global markets jumped 0.5% as computer programs that still think copper is a major indicator began BUYBUYBUYing on what must be some good news somewhere.
So that's the nature of the WEAK bounce we're seeing this morning. We'll take it more seriously when it's a 1% strong bounce and, if that holds – THEN we'll consider getting on board but a weak bounce off news that China is going insane with infrastructure spending doesn't give us a whole lot of confidence in the market having any real strength:
The plan repeated previous government statements on allowing farmers more freedom in selling or leasing their land. It gave no timetable or specific targets.
Some smaller cities have already eased their hukou controls, which also tie benefits to a family's residential status, to attract more rural laborers. But these efforts have only been partially successful because many people prefer to move to large cities for better job opportunities and public services.
The government would expand the coverage of social welfare, including pension and medical insurance, and reduce the costs of paying social insurance, the plan said without giving specifics.
The authorities would also allow local governments to issue municipal bonds and push ahead with a property tax law that would be aimed at boosting revenue to help cover the cost of increased urbanization. The plan also calls for expanding resource taxes to top up local government budgets. There were no specifics on any of these revenue measures, however.
Pretty horrific video, right? The CHINA growth story is really a story about Government officials making a land grab in the breadbasket while feeding more wage slaves to the factory owners in the city by forcibly growing the labor pool and depressing wages. Meanwhile, fat infrastructure projects are doled out to Party favorites and the debt is shoved off to local Governments, which are forced to hit goals and, in turn, borrow money from banks or issue bonds.
Like any Ponzi scheme, China growth has topped out and now it's all the runners of the con (Chinese Government) can do to keep investors from trying to pull out of the game. Past performance keeps people optimistic for quite some time but how many times in a row can China say "INFRASTRUCTURE" to keep the plates spinning for another 6 months?
Speaking of land grabs – let's not forget about Crimea, which has proclaimed itself to be independent – but only long enough to formally seek Russia's "permission" to rejoing the country as a republic. Western leaders have already declared the results of the referendum illegal. Crimea's parliament has also voted to nationalize state property on the territory of the peninsula following the announcement of Crimea's independence. This is the flaw in Democracy – they did "vote" for it, didn't they?
Since we've had a 2.5% drop, our 5% Rule™ demands a 0.5% bounce from these levels. Since China made a big announcement (yesterday), we're not going to be impressed with a weak 20% retrace so we'll demand a strong 40% retrace (1% bounce) by the end of the week, otherwise we'll be back to bearish in our short-term bets. Any failure of the weak bounce levels, of course, is also a reason to get bearish and already this morning – I put up a note to our Members to short the Futures at 16,100 on /YM (Dow) and 1,185 on /TF (Russell), watching 1,845 on /ES (S&P) to confirm weakness.
The Fed has a Rate Decision on Wednesday (2pm), followed by a Yellen Press Conference (2:30), so no other Fed Speak this week, but Real Estate Data is likely to be weak and all this political uncertaintly leads us to only one course of action.
Be careful out there!
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Kalifornia is the test bed for the Elite's herding experiments. I'm glad I'm almost out of there. Any other like minded freedom lovers should consider developing a viable exit plan also. I'd recommend start researching the north and northwest portion of the country for your next move. Cheers Bitchez!!!
America is doing the same thing but they're more subtle about it. Is this Agenda 21?
People think that Agenda 21 is a conspiracy but here in rural California the California Department of Forestry just levied a $150 tax on rural property owners and called it a "fee". The money doesn't go to the fire service it goes into the black hole of a general fund. So basically if they can just start charging fees with no representation it's obvious that they can tax people out of the rural areas and that is exactly what they plan to do. Another thing they do is cut services (e.g. Hospitals- obummercare) to make it impossible to live in a rural area. Regulations are another big one. Most rural areas have volunteer fire departments but the state is regulating that all the old trucks must go because of the pollution restrictions. Most rural fire departments can barely afford their old trucks let alone new trucks.
China's problem is not urbanization, its wealth creation. Its the race to become a middle-income country before the demographic trap door opens from beneath them.
Hampered by wealth extraction by elites, misapplied investments, and immigration/money flight of 3% of GNP per year, the likely result is, no, China comes up short.
The Plan does not want too big megalopolises. The Plan calls for more medium-sized cities spread more around
meanwhile individuals generally prefer to head for the biggest city, which is like participating to a lottery where the jackpot is bigger
what China is trying is to force economic preferences on individuals, and this involves... pain
this is real central planning, and it sucks to be in it. think about this reality, before you use the term central planning as hyperbolic gesture
EVERY nation on Earth that has transitioned from a rural economy to a manufacturing one has seen a similar exodus of surplus rural workers leaving for cities - usually in an unplanned and somewhat chaotic manner. The transition period is marked by increased numbers of slums in cities and poverty for those trying to find new work in cities.
IF China manages this transition in a more 'orderly' manner, they will have suicceeded where no other nation has. It makes sense for China to TRY and manage this demographic shift but how successful they may be....???
Let's be blunt - many in the west predicted far larger population growth, mass starvation and chaos in China by now. They've managed things fare better than predicted and werw BRILLIANT in the way they industrialized. Instead of BORROWING to build factories they had the West GIVE them and industrial base in exchange for the promise of cheap labor (which China already had). Solved China's need to find employment for a growing population and let them jump ahead by decades in industrialization. They played hardball with technology sharing as well.
You may not agree wiuth how thigns are done in China but they've been doing pretty good lately - even with the corrruption and all else. Compare China to the rest of the developing world like India - or the crapholes in Africa rich in resources but nothign else.
And what is the transition that occurs after farming to manufacturing ? Detroit?
Subsistence farming is obsolete. But instead of letting the market sort things out, the Chicoms think they can manage the transition better from above. So they build cities no one can afford to live in with capital that could have been spent on housing the factory workers can afford. Why? To line the Party apparatchicks' pockets, of course.
I don't know enough about the country to be able to predict anything, but growing instability wouldn't surprise me. Bears watching. Unlike what the central banksters want everybody to believe, there only so much real capital in any given economy to go around. Misallocate enough of it and you're f***ed.
Family farming is still a viable endeavor. Just don't get into monoculture, gmo's, hybrid wheat, or buy into Monsanto's world vision.
Brilliant.
They're going to do what the U.S. did; get rid of family farms, replace with corporate farms dependent on petroleum/machinery/GMO's and chemicals - then have a house of cards food system and cities with a 3-4 day food supply.
It's almost like they're herding cattle into a slaughter pen.
"To Serve Man" or something like that.
And wait for the flood of "illegals" from Japan to work those corporate farms. Double bonus: China then buys up farms in Japan.
China's buying up far better farmland in Africa. Japan.... radioactive and not very efficient when it comes to food production.
Mao would be amazed and proud! It's now only a matter of whose economy crashes first! And ripple-effects.
Mao was but a piker...
In the US they just crank up the property taxes. Win win for Govt + Big Business: tax revenues + profiting off of new development (see also "tax revenues")
"Killing Fields" has a lot more meaning to it than many might think... it's always a battle to control the land.
Long moving companies?
Hot pussy is always a commdity that is in demand and so is a man's brawn and intelligence. People will always need their shit moved. Robots can't manage the complexities involved in moving nor will they in the next 10 years. Large national moving companies have poor busines models becoming to computerizd and automated with workers of ill-repute. Take some of these limp wristed nellys studying gender queer marxist theory thinking a career making a 100k a year is waiting on them to graduate and teach them what man is, was, and can be with his brain and his stength and then you will have something worth investing in. Long real men and hot pussy.
Poor fellas, Agenda 21 comes to grab their lands