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Guest Post: China 2.0 Is in Trouble

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Despite the many differences between China and the U.S., their basic problems are remarkably similiar: an economy that increasingly serves a tiny Elite, and a political/financial system that is incapable of meaningful reform.

 
Setting aside the latest bird flu outbreak and sagging indicators of growth, China 2.0 is in trouble (with 1.0 being the Communist era of 1949 -1977 and 2.0 being the modernization/globalization era of 1978 - 2013), for it remains overly reliant on unsustainable growth dynamics.
 
The following is my summary of the excellent talks given by Jim Chanos and Michael Pettis at Mish's insight-packed Wine Country Conference in Sonoma earlier this month. (Any errors in presenting the speakers' views are of course mine.)
 
Here are Chanos' lecture slides and interviews with Chanos and Pettis:
 
Michael Pettis observed that he'd spent time in Haiti earlier in his career, and pockets of poverty in China today equal those he'd witnessed in Haiti. Experienced China hands know the central government takes pains to limit media exposure of this level of poverty, as it reflects poorly on China's claim to being a superpower.
 
He then described in some detail how the Chinese leadership has created a "no-win" policy by encouraging a dependence on fixed investment to fuel rapid growth of GDP. If it shifts income to households to enable more consumer spending, GDP growth will decline. But if it continues borrowing and spending on increasingly marginal fixed investments, growth will also slow.
 
In effect, China has suppressed wages to fuel GDP growth. Financial repression (low interest rates) has further suppressed household income and encouraged misallocation of capital on a vast scale.
 
Pettis said the Chinese government is pushing a "go west" campaign. While "go west" worked in America's development, it failed miserably in Soviet Russia and Brazil. The difference, he said, is that in America, the private sector moved west and the government simply followed. In China, Russia and Brazil, the government pushed infrastructure west but without private-sector participation. Pettis reported that private sector contractors go west to build the infrastructure and then return east once the work is done.
 
In Pettis' view, the key metrics are debt and the ability to service debt: if debt is rising but the ability to service that debt (disposable income) is stagnant, then the system is unsustainable. He said this is the case in China: debt is rising but the ability to service that debt is not.
 
Given the political power of the state-owned enterprises (SOEs), China's political and financial systems do not have self-correcting mechanisms. Such mechanisms require transparency and feedback that is lacking in China.
 
Pettis flatly stated that the PBoC (China's central bank) is insolvent. Debt levels are high and much of the collateral is impaired.
 
He also noted that pollution is estimated to shave 3.5% off GDP annually, which means that if the 7% reported GDP growth rate is overstated, as many believe, then actual GDP growth after accounting for environmental damage might well be zero.
 
 
Jim Chanos addressed a number of financial and real estate issues. In the last downturn in the late 1990s, he noted, 40% of outstanding loans in China went sour. People in China only have 15 years' experience owning property, and so they have no experience of either a housing crash or long-term maintenance of housing.
 
One of the attendees asked: since China's population is ageing, doesn't the overbuilding of residential real estate make sense? That is, invest in housing now, anticipating that in 10 years more national income will have to be devoted to caring for the elderly?
 
Chanos' response was succinct: "Most of the buildings in China won't be livable in 10 years." His point was that the infrastructure required to maintain buildings is undeveloped in China: most highrise residential buildings do not have a functioning common-area expense/maintenance system in place. If the elevator breaks, there is rarely money set aside to fix it or a person responsible for making it happen.
 
The quality of construction in China, though greatly improved by some accounts, is still sketchy; Chanos said that when a bridge recently collapsed, inspectors found that the reinforcing bars that were supposed to be in the concrete were missing. This might be an extreme example, but the basic point is that much of the money poured into construction over the past decade has not produced a product that will last 50 or 100 years.
 
Wealthy Chinese people often visit him in New York, Chanos reported, and there is one striking blind spot in their grasp of real estate. None of the visitors are aware that uninhabited buildings decay. The average middle class household in China is sinking all their savings into investment flats, assuming real estate will be a durable store of value, without understanding that these vacant units degrade. At some tipping point, entire buildings could become unlivable as elevators break down, leaks feed mold, etc.
 
The store of value is a chimera unless the building is actively maintained, but maintenance is not yet part of the culture.
 
As for the "if we build it, they will come" narrative that underpins the China Bulls' case, Chanos said that there is already 15 square meters of empty space per capita in China, meaning that there is 135 sq. ft. of empty interior area per person in China, and another 10 billion square meters is under construction.
 
Housing is already astronomically high in terms of the average urban annual income-- the annual income/cost of a flat ratio is higher in China, even in 2nd and 3rd tier cities, than in high-cost locales such as London and New York.
 
Most of China's populace cannot possibly afford the tens of millions of flats being built or sitting empty.
 
Chanos also noted that repression is not just financial; China spends more on internal security than it does on its military.
 
An estimated $2.7 trillion in private wealth has left China in the last decade. This is roughly 22% of China's $12 trillion GDP. What does this say about the leadership's faith in their system?
 
As a matter of "face" and policy, China's leadership focuses almost exclusively on GDP growth; GDP is the tail wagging the dog, Chanos noted, and it leads to absurdly unproductive allocation of credit and capital to projects that will never earn the cost of that capital.
 
The easist way to boost GDP is to put a shovel in the ground--build something, anything. That has been China's strategy for 20 years, and it is now yielding diminishing returns.
 
Add all this up and you get a clear picture of a government and economy that is incapable of making the kind of structural reforms that are needed to make growth sustainable. My conclusion is that despite the many differences between China and the U.S., their basic problems are remarkably similiar: an economy that increasingly serves a tiny Elite, and a political/financial system that is incapable of meaningful reform.
 

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Fri, 04/26/2013 - 12:59 | 3502956 Lohn Jocke
Lohn Jocke's picture

But the U.S. is just fine.

Fri, 04/26/2013 - 13:03 | 3502968 Jam Akin
Jam Akin's picture

Always believe the guys who are talking their books.

Fri, 04/26/2013 - 13:05 | 3502981 ParkAveFlasher
ParkAveFlasher's picture

My father used to tell me, "eat your food.  People are starving in China."

30 years ago.

Fri, 04/26/2013 - 13:12 | 3503018 Dr. Engali
Dr. Engali's picture

Now a mother in China is telling her kids" eat your food. People are starving in America".

Fri, 04/26/2013 - 13:23 | 3503055 The Abstraction...
The Abstraction of Justice's picture

Now a mother in England is telling her kids, 'WTF I don't have any kids'

Fri, 04/26/2013 - 13:21 | 3503061 Richard Chesler
Richard Chesler's picture

"an economy that increasingly serves a tiny Elite, and a political/financial system that is incapable of meaningful reform."

 

So what's the problem peasants?


Fri, 04/26/2013 - 17:22 | 3503928 Jack Napier
Jack Napier's picture

No problem. You are crunchy and taste good with ketchup.

Fri, 04/26/2013 - 18:35 | 3504141 ronaldawg
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an economy that increasingly serves a tiny Elite, and a political/financial system that is incapable of meaningful reform

I love it when an author repeats the EXACT same words twice because we are too stupid to get it the first time......

Fri, 04/26/2013 - 13:21 | 3503060 AlaricBalth
AlaricBalth's picture

The US has become a third world banana republic with a first world appetite.

Fri, 04/26/2013 - 13:25 | 3503081 JustObserving
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American workers are now three times more likely than Chinese workers to lack the means of feeding their families, according to a startling new report from the Gallup organization. The polling group found that 19 percent of Americans worried about being able to feed themselves or their families, compared to only 6 percent of Chinese.

http://www.wsws.org/en/articles/2011/10/hung-o17.html

Fri, 04/26/2013 - 14:21 | 3503304 IridiumRebel
IridiumRebel's picture

The Chinese can grow food whereas Americans have a tough time growing doritos.

Fri, 04/26/2013 - 14:50 | 3503429 ParkAveFlasher
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Bro, you ever try rinsing the dirt off a dorito?  NOT EASY.

Fri, 04/26/2013 - 17:26 | 3503941 akak
akak's picture

Plus, there's all those Dorito worms to contend with, and having to frequently fertilize them with crap, and make sure that the soil has the proper ratio of partially-hydrogenated oils, and the need to constantly replenish all the salt after a rain.  I say it's too much work.

Fri, 04/26/2013 - 18:37 | 3504145 ronaldawg
ronaldawg's picture

Sure right - there are more Chinese NOT WORKING than the entire population of the US.  I guess if everone ate rice and dirt than everyone would be able to eat like the Chinese in the US.

Fri, 04/26/2013 - 17:23 | 3503937 Tulpa
Tulpa's picture

You seem aware that the US is a massive food exporter.

Fri, 04/26/2013 - 14:26 | 3503310 prains
prains's picture

That's what happens when you let your corporate elite take your jobs to china, but hey you have to be free to do whatever is good for you right? fuck your neighbor

Fri, 04/26/2013 - 18:40 | 3504147 ronaldawg
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My neighbors are two Italian sisters: 19 and 20 years old.  Yes I want to fuck my neighbor(s).

Fri, 04/26/2013 - 18:43 | 3504156 akak
akak's picture

Better plan on doing some thatching first.

Fri, 04/26/2013 - 14:28 | 3503316 Tulpa
Tulpa's picture

Keep in mind that the average Chinese worker considers a daily diet of 2000 calories, 90% from rice, to be perfectly acceptable.  Most American workers would disagree.

Fri, 04/26/2013 - 14:19 | 3503280 IridiumRebel
IridiumRebel's picture

Few are starving in America. SNAP assures us so. Roughly 50 million starved in Mao's "Great Leap Forward". Give it time though. The Left are working hard to mimic Chairman Mao.

Fri, 04/26/2013 - 15:14 | 3503531 JebusKhrist
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“Every $5 in SNAP generates $9.20 for the local economy.”

http://www.washingtonpost.com/national/in-florida-a-food-stamp-recruiter...

Fri, 04/26/2013 - 13:09 | 3503004 Oh regional Indian
Oh regional Indian's picture

Some of us were this pre-scient in 2008 and before. This was me in 2008, note the china/india line please...

 China is staggering under its own curious set of circumstances of a large population set “herded” into rapid “development” mode, much like India.  Most of the “gains” are hype. Credit, cheap and plenty until recently (private equity had moved it into the right hands in preceding years), being the sole driver (flogger?) of growth.

 

v The sub prime mess (and all its attendant tentacles of cause and effect in the world financial systems) is scary with just the lit fuse sparking.  When it really goes off, all bets are off.  Talk of lack of understanding of higher order cause and effect.

v Energy prices are reset in the public mind at dizzying rate (12 dollars a barrel of Brent Sweet Crude is not such old memory), currently 130 dollars a barrel.  Associated inflationary impact is hitting the majority of the world’s population.

 

v On a similar somber note, a discussion on our world’s geo political situation. Every major war in history was a resource war as is every major conflict today. There is a relentlessly hawkish bias in the global dialogue, with too many vested interests in the war – pie.  Oil, minerals, territory / markets and now water. Also, in large theatre wars, multi-generational trauma creates multi-generational conflicts.  Grim but true.

 

v An increasingly nuclear world adds the requisite potential for a runaway reaction!  Our world is ever increasingly polarized with ever greater potential for conflict.

ori

World View on 24th June 2008

 

Fri, 04/26/2013 - 19:32 | 3504279 Seer
Seer's picture

"Every major war in history was a resource war as is every major conflict today."

Warms my heart when I spot someone who truly gets it.  It's a linchpin.  When viewed as such it informs us that we actually DO live on a finite planet: and I'd hope that this awareness would help us guard against the "growth hucksters."

Fri, 04/26/2013 - 13:17 | 3503044 BraveSirRobin
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The excess housing problem is nothing a good war couldn't fix. Blow it all up, then rebuild it.

Fri, 04/26/2013 - 18:44 | 3504160 ronaldawg
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WTF I said that two days ago about Europe and Japan and got down arrowed 10 times.

Fri, 04/26/2013 - 19:31 | 3504283 Seer
Seer's picture

People are fickle.  Surprised?

Fri, 04/26/2013 - 13:03 | 3502980 Schmuck Raker
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You didn't bother reading the first sentence, at least?

Fri, 04/26/2013 - 13:19 | 3503051 earleflorida
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for second there, i thought you were talking about america

Fri, 04/26/2013 - 13:01 | 3502970 kliguy38
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Yup China is cooked...but when the smoke clears, we'll just be green glass..........

Fri, 04/26/2013 - 13:04 | 3502972 de3de8
de3de8's picture

Kinda like here.

Fri, 04/26/2013 - 13:07 | 3502978 Dr. Engali
Dr. Engali's picture

"This might be an extreme example, but the basic point is that much of the money poured into construction over the past decade has not produced a product that will last 50 or 100 years."

 

Tell me anything we build here that will last 50 or 100 years. Fuck we blow up a 20 year old football stadium to build a bigger and better one to blow up later.  

 

Speaking of blowing up..the twin towers sure didn't make it 50 years.

Fri, 04/26/2013 - 13:28 | 3503084 ParkAveFlasher
ParkAveFlasher's picture

Great point.  BTW all, the company I work for is moving into the Empire State Building.  Yeeeeaaa me.  The floors we will occupy have been converted to a minimalist, open workspace with strict restrictions on the allowable mass of polluting and/or flammable material.  No, really.

Do any ZHers have any recommendations regarding OTC products for surviving flames, falls, dirty bombs, JHP volleys, etc?

Fri, 04/26/2013 - 14:15 | 3503263 IridiumRebel
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Suggestion: move.

Fri, 04/26/2013 - 15:41 | 3503609 Jam Akin
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Don't move to China though.  

Fri, 04/26/2013 - 16:22 | 3503710 Cthonic
Cthonic's picture

Semtex and abseiling gear.

Fri, 04/26/2013 - 20:40 | 3504492 Seer
Seer's picture

You've gotten ahead of yourself.  You need to rewind back to the fundamentals: Food, Shelter and Water.  The path from there is much easier to decipher...

Fri, 04/26/2013 - 13:37 | 3503120 NotApplicable
NotApplicable's picture

Those football stadiums don't fall down, though. They are blown to smithereens via the magic of Keynes, financed by the magic of ZIRP.

Fri, 04/26/2013 - 14:32 | 3503190 JOYFUL
JOYFUL's picture

Tell me anything we build here that will last 50 or 100 years.

Xactly\;  these kind of chat sessions from guys who think their job is to deliver all the ' real bad news' are just hilarious...ly outta touch. The markers that they are using as yardsticks are imported from a set of cirumstances unique to a period of western*history now over a half century old - and as applicable to china in the following millenium as fur is to fish...

And the comparative spirit, it is interesting to note...always goes one way. Were we to look at ourselves through the lense of the other...several milleniums old cultural continuum, we would be amazed at would could learn about our own oddities, foibles, and serial errors of judgment & intent. But why bother...it's easier to turn the microscope around and look always the other way...at a subject where - conveniently - our target 'audience' knows so little, that one can pose as an informed 'expert'...without really trying...as in going out of one's way to incorporate perspectives more useable, and applicable, to the study at hand. Instead of talking like a C19th anthropologist mongst the Trobriand Islanders!

Are China's current challenges the result of

an economy that increasingly serves a tiny elite, and a political\financial system that is incapable of meaningful reform?

No...that was in fact the story of the so-called China1.0...when a western backed and educated "Communist" elite stole a  country already pillaged by pirates of the pinstripe persuasion...and turned it into a giant experiment in failed economic policies and thought control. The gradual liberation from that failed state...without bloodshed...is a minor modern miracle. And success story so underrated by those who stray into the zone with an urge to see nothing but either the 'failed state' legacy...or a new satrapy of the moneypower empire asto be almost impossible to evaluate objectively in the west.

The putative China 2.0 of this piece is unrecognizable in all this bafflegab done up as an 'analysis' - today's China is not in need of 'proving itself a superpower' lads...rather it is intent upon rolling up the residue of another, rapidly fading one...and supplanting it's hegemony with a regional base of trade and development which can workably provide a basis for a new multi-polar power structure that leaves the sionist hegemonist script out in the cold!

*and "eastern" and 'southern'...had to laugh at the SovietRussia go west reference...was he referring to the Warsaw Pact as a trade organization>|?

 

 

 

  

Fri, 04/26/2013 - 18:46 | 3504165 ronaldawg
ronaldawg's picture

LA Coliseum, Hollywood Bowl.  Only know that because there are pictures in the hallways at the office building I work in.

Fri, 04/26/2013 - 13:04 | 3502991 Atticus Finch
Atticus Finch's picture

Keep in mind that Zhou Xiaochuan, Beijing reports to the Bank of International Settlements just as Bernanke and William C. Dudley. See https://www.bis.org/about/board.htm

Especially read the Code of Conduct to clarify whether any of them are working in the interest of the home nation or the interest of the BIS.

Fri, 04/26/2013 - 13:05 | 3502995 LawsofPhysics
LawsofPhysics's picture

Let's see, what happened the last time a rising mercantilist/socialist country was in a similar situation?  Hhhmmmmm....

China will do anything to protect it's manufacturing power and competitive edge, they are a (forcibly) united people folks.

Fri, 04/26/2013 - 14:45 | 3503401 Tulpa
Tulpa's picture

It's easy to be united when the pie is growing.  Politics in the PRC is mostly done behind closed doors so outsiders like us don't see how many fractures there are in the facade of unity... when the pie stops growing you'll see they're just as disunited as we are, if not more.

Fri, 04/26/2013 - 15:24 | 3503550 LawsofPhysics
LawsofPhysics's picture

Yes, now finish your thought.  Whereas Americans blame each other, due to the "two-party" meme, who might the Chinese people blame? What would the propoganda tell them to do?  The are a of single mind when it come to accepting instructions from the state.  Go ahead, finish your analysis.

Fri, 04/26/2013 - 16:13 | 3503696 Tulpa
Tulpa's picture

The government isn't even united, and that's while the pie is growing.  It's a short trip from up and coming political player in the PRC to being under house arrest facing murder charges.  We've seen that already.

I don't share your faith in the Chinese people continuing to unquestioningly accept instructions when the going gets rough.  They've tasted 21st century living and they aren't going to give it up so easily.  And of course that's assuming the govt itself is united; hard to predict with no charismatic leader really available.

Fri, 04/26/2013 - 19:27 | 3504244 i-dog
i-dog's picture

 

"The[y] are a of single mind when it come to accepting instructions from the state."

LOL ... project much? A more untrue assessment of the Chinese could not be made! I suspect it could well have been a chinaman who coined the phrase: "You pretend to pay us, and we'll pretend to work".

The Chinese have been successful and peaceful traders - ie. entrepreneurs and free agents - for hundreds of years before western Europeans broke the chains of feudal serfdom ... and they haven't changed their basic nature, notwithstanding their subjugation under Khazarian-instigated communist rule since 1948 (and earlier during the Ching dynasty - another Khazarian-instigated takeover that [coincidentally] began just across the water from Japan and just 5 years after the Jesuits had been expelled from Japan in 1639).

Ruling the Chinese is somewhat akin to herding cats.

Fri, 04/26/2013 - 20:47 | 3504504 Seer
Seer's picture

Yup!  It all works as long as there's growth, when there's treasure to split up.

Capitalism, communism, whatever-ism, if it's predicated on pushing perpetual growth on this here finite planet then it is nothing but FAIL!

Fri, 04/26/2013 - 20:50 | 3504515 Seer
Seer's picture

"China will do anything to protect it's manufacturing power and competitive edge"

Can there be competition when there are no customers?  Can't push on a string...  That's why they've turned inward to internal consumption (now then, where have we seen this story play out?); and when they're energy poor this is surely going to turn out to be a very short run.

Fri, 04/26/2013 - 13:05 | 3502999 maskone909
maskone909's picture

been to detroit lately?

Fri, 04/26/2013 - 13:13 | 3503032 Dr. Engali
Dr. Engali's picture

I don't need to go to Detroit. The degredation around here has been astounding over the last four year. This city used to do a great job maintaining the roads. Now some of them are like driving through a field. There are  houses in nice neighborhoods that have been vacant for years, and the well manicured lawns aren't what they used to be.

Fri, 04/26/2013 - 13:45 | 3503143 NotApplicable
NotApplicable's picture

Meanwhile, I see thousands upon thousands of apts. being built to house the stupids coming to town to get in on the student loan lifetime impoverishment program.

Fri, 04/26/2013 - 20:53 | 3504530 Seer
Seer's picture

"roads. Now some of them are like driving through a field."

Hope they're not like my fields.  I've got ruts from skidders that nearly go up to my knees; from time to time my small tractor even struggles with them.

It's entropy's way of telling us it's time to slow down...

Fri, 04/26/2013 - 13:17 | 3503035 BanksterSlayer
BanksterSlayer's picture

Difference: China and Russia have the new Gold-Backed Central Bank, er, I mean, the "BRICS Development Fund."

Fri, 04/26/2013 - 13:18 | 3503045 The Abstraction...
The Abstraction of Justice's picture

'People in China only have 15 years' experience owning property, and so they have no experience of either a housing crash or long-term maintenance of housing.'

 

While we wise men in the West have 45 years worth of experience, we make the same mistakes (well some of us do), as those Chinese newbies.

 

Free market economics + fiat, applied to housing, seems to inevitably lead to a housing bubble and gross government corruption. The old way of dealing with people who owned too much land was to invade and steal it. Time to revist the past.

Fri, 04/26/2013 - 13:24 | 3503075 SmittyinLA
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'People in China only have 15 years' experience owning property, and so they have no experience of either a housing crash or long-term maintenance of housing.'

There are hundreds of millions of people living in family homes in China for hundreds of years. 

 

Fri, 04/26/2013 - 13:40 | 3503129 NotApplicable
NotApplicable's picture

Not in any skyscrapers. Especially ones lying on their side.

http://gizmodo.com/5304233/entire-new-13%2Bstory-building-tips-over-in-s...

Fri, 04/26/2013 - 13:49 | 3503155 IMACOINNUT
IMACOINNUT's picture

True, but those homes have the running water, kitchens, bathrooms outside the main structure. The home is primarily for sleeping and protection from the elements. No elevators, toilets, etc inside to maintain. Plenty of outhouses and outside charcoal heated floors and for cooking. A big world of difference.

Fri, 04/26/2013 - 20:53 | 3504536 Seer
Seer's picture

The Amish live there?

Fri, 04/26/2013 - 13:23 | 3503059 SmittyinLA
SmittyinLA's picture

They don't need structural reforms, they can loot Africa for another 50 years

Fri, 04/26/2013 - 14:47 | 3503410 Tulpa
Tulpa's picture

Not without support/indifference of the US military...  PRC has very ltd force projection capability.  They can't even win a face-off with the Phillippines in their own backyard.

Fri, 04/26/2013 - 20:57 | 3504542 Seer
Seer's picture

AFRICOM

Because, when you absolutely, positively have to keep killing people in the name of "democracy" there's no greater proven entity than the US military.

Fri, 04/26/2013 - 13:25 | 3503062 williambanzai7
williambanzai7's picture

The efficient market hypothesis says this statement is a fallacy:

"if debt is rising but the ability to service that debt (disposable income) is stagnant, then the system is unsustainable."

Fri, 04/26/2013 - 13:25 | 3503078 SmittyinLA
SmittyinLA's picture

ya but .......income is rising in China, dramatically 

Fri, 04/26/2013 - 20:57 | 3504549 Seer
Seer's picture

Eventually the wall is met- the planet is finite.  Here's a toast to growth!  Bubble up!

Fri, 04/26/2013 - 13:22 | 3503064 Fuku Ben
Fuku Ben's picture

The US, Asia and EU are all in the same boat. It is like a giant global shell game with the NWO running it and we're all the suckers playing it. We lose no matter which way they run it.

If we can't unite globally and stop this sheit its our own damned fault. The sheeple are just starting to figure this out as the end game is accelerating.

 

Who will reach the finish line first and survive freedom or tyranny?

 

Maybe its not just a shell game but also a game of chicken thrown in for added excitement.

 

http://www.youtube.com/watch?v=u7hZ9jKrwvo

Fri, 04/26/2013 - 14:00 | 3503202 Anusocracy
Anusocracy's picture

The only thing the sheeple are starting to understand is that they might have to tighten their 46 inch belts one notch.

Other than that, they are still picket fences.

Fri, 04/26/2013 - 20:58 | 3504555 Seer
Seer's picture

Well... maybe not:

Nation Starting To Realize New Era Of American Innovation Never Gonna Happen

http://www.theonion.com/articles/nation-starting-to-realize-new-era-of-a...

Fri, 04/26/2013 - 13:30 | 3503097 williambanzai7
williambanzai7's picture

I have asked many different Chinese people from many different strata of Chinese society and in rural and urban locales, are you better off today than you were 20 years ago, and the answer is always yes.

I always manage to slip this question in when I meet a Mainlander. 

Does that mean China is a utopia like the USA and its puppets? Obviously not.

Nowadays, you hear them complaining about things like powdered milk and bird flu. In the good old days you went straight to a re-education camp for such behavior.

Fri, 04/26/2013 - 13:43 | 3503136 NotApplicable
NotApplicable's picture

I'd say that's the result of the facade of an all-controlling paternal state being replaced by a facade of freedom and prosperity.

I bet you won't get the same answer 20 years from now.

Fri, 04/26/2013 - 13:46 | 3503151 williambanzai7
williambanzai7's picture

You may be right, because helium is helium in the final analysis.

But at least  for the time being, Joe Chan, is busy being a busy entrepreneur and/or crony. It runs in his blood.

Fri, 04/26/2013 - 14:05 | 3503230 azzhatter
azzhatter's picture

This is true William. I lived in China for 6 years from 2004-2010. One of my employees said to me that when she was a child she was very poor but she didn't know it because everyone was poor. Now they see the difference.

I lived in other 3rd world shit holes in my life too. But the shocking thing about this banana republic is that we are moving toward what they are striving to get away from. The latin american countries have been plagued by corrupt governments and corrupt banksters for a century. We are rapidly heading there and seemingly no one is willing to fight it.

 

China has serious problems. The real estate overbuild is real. I've seen it. 5-6 year old buildings never occupied, newer apartments falling apart within months after moving in. The sheer amount of empty real estate is astonishing. But this country has just as many problems and just as weak of resolve to fix anything.

Fri, 04/26/2013 - 21:08 | 3504580 Seer
Seer's picture

It all turns out the same.  We're seeing different shades of lipstick on the pig and thinking it's not the same.  Everything is run on top of a Ponzi- perpetual growth!

Fri, 04/26/2013 - 14:40 | 3503364 Tulpa
Tulpa's picture

They were probably living on dirt floors and 1500 calories a day 20 years ago.  Talk about cherry picking data.  Do you ask them if they're better off than they were 5 years ago?  Might not get such a clear answer.

BTW, 20 years ago America had no Internet and much higher crime rates.  So you might get the same "yes" answer from an American.

Fri, 04/26/2013 - 15:33 | 3503582 azzhatter
azzhatter's picture

better off has always been subjective. They told the slaves they were better off here than in africa too because they didn't sleep in grass huts

Fri, 04/26/2013 - 13:51 | 3503169 Son of Loki
Son of Loki's picture

China gave most of their bailout money to banks and RE (sound familiar?).....true, there are fewer "peasants" but most of the people there saw zero benefit from the Trillion $$$ PRC bailout, I'm afraid. However, China is not alone in its trouble.....look at the EU, USA, Argentina, and so on....we're all in 'trouble' looks like, some worse then others.

Fri, 04/26/2013 - 13:57 | 3503196 pragmatic hobo
pragmatic hobo's picture

I'll say this ... if China and USA are in similar trouble, chances of China getting out of it by doing the right thing is far higher than that of USA because their government/elites fear their people far more than the government/elites of USA fear the bottom 99%.

Fri, 04/26/2013 - 14:10 | 3503240 IMACOINNUT
IMACOINNUT's picture

Prag hobo

 

I Don't agree, China elites spend more money on internal security than the military, therefore, they're more likely to force the peasants to do as they're told. In other words they wont appease the people, it would run against established policy. 

Fri, 04/26/2013 - 15:11 | 3503513 pragmatic hobo
pragmatic hobo's picture

when it comes to "appeasing" people, Chinese communist party is a motley crew of amateurs compared to the USA. Shit like recent lock-down of entire city of Boston will never happen in China.

Fri, 04/26/2013 - 15:18 | 3503539 LawsofPhysics
LawsofPhysics's picture

"Shit like recent lock-down of entire city of Boston will never happen in China." - Only because the people of China obey, the state would simply say, go in your house and stay there until further notice and the people would do it.  The best sheep on the planet.  China has a very clear history on how they handle any citizens who get out of line.

Fri, 04/26/2013 - 15:32 | 3503583 Radical Marijuana
Radical Marijuana's picture

Go to a day care with primarily oriental children.

Then compare a day care with western children.

Enough thousands of years of history becomes genetic predisposition.

Fri, 04/26/2013 - 21:12 | 3504600 Seer
Seer's picture

NO ONE will be getting out of anything as long as the drive is for growth.

While China in the past has been able to use internal force to "adjust" things I'm thinking that after they've been exposed to US marketing BS they're not going to be so readily corralled: the marketing BS programs everyone to feel a sense of entitlement- pretty tough habit to crack.

Fri, 04/26/2013 - 14:08 | 3503208 kito
kito's picture

Chuckie you left out the fact that china is a large creditor nation with a population that actually saves because there is no snap program, section 8, Medicaid, Medicare, disability, social security.....that the Chinese population isn't whacked out on psychotropic drugs....the family structure in China is still intact....the Chinese don't live off of credit cards.....aren't obese......no chuckie.....China is not that similar to the u.s......

Fri, 04/26/2013 - 14:15 | 3503264 azzhatter
azzhatter's picture

Chinese have an expression "Chi Ku" which translates to "eat bitter or eat bitterness" . It means to endure hard times. We have SNAP cards

Fri, 04/26/2013 - 14:51 | 3503434 Tulpa
Tulpa's picture

And you left out the fact that they have 116 men for every 100 women in the coming of age generation... and their own obesity problem (one kid for each wealthy family tends to do that)... few institutions independent of the state.... and they're saving because the PRC doesn't allow them to invest outside the PRC or in anything that doesn't help the government.

Fri, 04/26/2013 - 15:39 | 3503600 smartstrike
smartstrike's picture

I see, that's the root of global economic collapse according to your thinking? There is no SNAP and no section 8 housing either in Haiti and Somalia: they live in tents and on bags of rice delivered by some NGO. I bet that their standard of living is very high and the future very rosy?

Sat, 04/27/2013 - 10:32 | 3505375 kito
kito's picture

No smartstrike, its not the root, its the fabric....and the fabric is the ability of its people to brave a collapse, which most Americans are woefully unprepared for....our govt has much more to worry about when there are over 50 percent of households relying on the govt in one form or another....

Fri, 04/26/2013 - 21:17 | 3504614 Seer
Seer's picture

"China is not that similar to the u.s"

I beg to differ.  As long as they are pushing growth (WTF were their goals, 10% for ten years or so?) they're going to slam into the same fucking wall.

Again, people are confusing the color of the lipstick on the pig thinking that this creates a significant difference.

Just watch as China's external markets continue to dry up.  Let's see how long they'll be able to burn their cash on energy and other resource imports WHILE STILL promoting high growth targets!

What you're saying was said about the Japanese.  I suspect that basic human nature will ultimately win out and that people will start cracking.

Fri, 04/26/2013 - 15:59 | 3503618 Jam Akin
Jam Akin's picture

It is true that Chinese typically don't do maintenance but in the end that might prove to be a "broken window benefit" to local employment in manufacturing and construction. /s

Fri, 04/26/2013 - 16:24 | 3503726 TheMonetaryRed
TheMonetaryRed's picture

THE ONLY STORY THAT MATTERS in China is WMPs (Wealth Management Products), their utter fraudulence and the coming collapse of that fraud. 

Fri, 04/26/2013 - 18:50 | 3503746 Radical Marijuana
Radical Marijuana's picture

The plainly obvious point "should" be that it is IMPOSSIBLE for "structural reforms ... to make growth sustainable."

Of course, the collective groups of stupid little monkeys in civilizations are not able to think about anything that they "should" think about, like the basic mathematics of exponential growth, since their "economics" is based on bizarre ways that the best liars trick others who want to be tricked by the best lies.

Ancient Chinese civilization evolved a sort of village ecology system that was sustainable for dozens of generations. However, they were forced by Western conquests of them to imitate the West, by attempting to do what we did better than we did. However, the Western powers were only able to do that because we had a fresh planet to rape, and high-grade to hell.

The whole world's economy is based on the maximization of the short-term, by those who have evolved to be able rationalize taking advantage of being able to do that. Everything we are doing is based on turning natural resources into garbage and pollution as fast as possible, while we call that "economic growth."

The profound problems we face are that what we NEED, and will evolve, the hard way, is better human ecology and industrial ecology, in order to save enough of the natural ecology, which imperatives will come about, (as the previous article in this line stated) when the status quo is finally forced to change, due to their systems collapsing around them, but probably not before.

The even more profound problems are that we ALREADY DO operate a human ecology, as an energy system which is controlled by the most labile component, which are the people who are the best at lying about what they are doing. The double whammy we are being hit with is that our real human ecology operates through the biggest bullies' bullshit being able to get away with lying as much as possible about how our real human ecology actually operates.

It is IMPOSSIBLE "to make growth sustainable."  Instead, what we are actually doing is overshooting our exponential growth, by deferring the debts and deaths onto future generations. The debt slavery numbers transforming into debt insanities are going to drive the murder systems mad too!

It is extremely surreal to attempt to cope with living inside of a civilization which is almost totally based on the power of force to back up frauds, so that everything continues to be controlled by huge lies. Those doing that, in the short-term, have every advantage to continue to do that ... while anyone who thinks more deeply about that trajectory can easily imagine the exponential rates at which we going to overshoot whatever might have been "sustainable," and then collapse into chaos beyond comprehension!

Through enough of those spirals of social insanities, we maybe will eventually evolve the mechanisms to have a more sustainable set of ecological systems. However, for now, our path is a rush towards the future, where each doubling time of the past exponential growth gets more unsustainable ...

Nobody within our systems are able to have successful careers by promoting the idea that the goal of endless growth is absolutely impossible. Instead, each individual is successful to the degree that they maximize their own local growth, which all leads towards collective collapse into chaos and mass murders beyond imagination.

The irony of Oriental civilizations is that they were forced to adopt Western science and technology. However, those Western sciences and technologies are themselves profoundly unscientific when it comes to economics and political science in general, since they are based on deliberate denials of the fundamental role of fraud throughout all of politics and economics!

China is like the USA now, and even overtaking the USA to the degree that they are making more money out of nothing than the USA! The whole world is being pumped up by technologies which are trillions of times more powerful, BUT, that is making their established systems of FRAUD, BACKED BY FORCE, become amplified by many orders of magnitude.

It continues to be utterly astonishing and astounding how human understanding of energy systems in general have advanced so much, while the basic understanding of human civilization as an energy system is so deliberately denied, due to human civilizations necessarily being controlled by their murder systems, which developed through the history of militarism enabling the triumphs of deceits.

The WHOLE WORLD is inside of a globalized Neolithic civilization: "an economy that increasingly serves a tiny Elite, and a political/financial system that is incapable of meaningful reform!"

However, EVERYONE is inside that system, including the masses of Zombie Sheeple, being controlled by the tiny elites of the Vicious Wolves. Indeed, in my view the Sheeple are even more of a problem than the Wolves, since the Sheeple have been more successfully brainwashed to believe in the bullshit promoted by the Wolves, than the Wolves themselves.

The best theoretical solutions are still to enable a greater use of information, through a democratic republic, BUT that has got to be based on doing the necessary death controls, or else nothing else is possible, than runway growth, resulting in collapse into chaos. The practical problems are that the tiny ruling classes have been too successful in brainwashing the vast majority to believe in bullshit, and to admire and approve that bullshit, which they applaud when it is performed before them!

Thus, we have the Wolves in Sheep's clothing, having successful taught the Sheep to bleat their moralities. Those Sheeple, all over the world, both in the USA, as well as in China, are proud of their stupid moralities, and always promote those bullshit moralities as somehow being the basis for solving their social problems. It is quite surreal to comprehend the degree to which the Wolves are tiny elites that have made and maintained the current political/financial systems by persuading the vast majority of people to agree with their bullshit social stories.

China is an ancient Neolithic civilization, which was relatively recently forced to adopt Western science and technologies. The USA is Neolithic civilization that was able to invade North America, and there find a fresh continent to turn into garbage and pollution as fast as possible, using its advancing science and technology (guided by an economic system based on the social pyramid systems of fraud, backed by force, or legalized lies, backed by legalized violence.)

Both DO share basic problems, and both are NOT coming remotely close to resolving those problems, since everything they do is within the basic Neolithic style of civilization, which is based on deceits and destruction by the ruling classes, in order to keep the masses ignorant and afraid. Within both the public spaces of China and the USA, FRAUD IS TRIUMPHANT!  (... at least, in the short-term.)

ALL of economics has deliberately been developed in ways which ignored its surrounding ecology, because the real human ecology was based on triumphantly backing up deceits with destruction, and therefore, it was impossible for socially successful "economics" to face those facts. That is the SAME in China as in the USA, and indeed, EVERYWHERE! Hence, there are no sane public debates, and there are now no reasonable ways that we can expect any to emerge, until that is too little, too late, because that appears like it could only happen AFTER the status quo is finally uncontrollably collapsing into chaos ...

Fri, 04/26/2013 - 21:23 | 3504626 Seer
Seer's picture

I'd like to print out your comment on a stone tablet and smack Hugh-Smith over the head with it.  Somehow SOMETHING has got to reach through the thickheaded idiots out there that "sustainable growth" is a fucking oxymoron!

You're like a fresh glass of water in the desert...

Fri, 04/26/2013 - 16:42 | 3503777 omi
omi's picture

I've been in China for a month now, and I think most of his points are either irellevant nitpicking or just talking his book.

Many buildings are managed by someone such as local gov't. even if elevator will break down, it will not stop Chinese from living there. There is an incredable fix-it-yourself culture here.

Another hilarious point from Chanos' presentation was that equity markets haven't risen (rewarded investors as he calls it) I seriously don't understand this. His claim is essentially this "other places have tradable bubbles, why don't you?".

At least in China they make an attempt to deliberately pop bubbles in real estate.

Back to infrastructure. I have no idea what Chanos is smoking, infrastructure here is in great condition. Any US city would be jealous. Can you find something that broke or wasn't build properly, maybe, but so can be anywhere else. Look at overall.

On housing overbuilding. Recent example, I went to Beijing zoo. China needed an extra highway there. Polar bears pavilion got moved and rebuilt and on the old place a highway gets put in over the zoo. When China needs to expand infrastructure it ges done. Unfortunately, this also displaces people from their homes. People get replacement appartments. On edges of cities, there are massive constructions underway to accomodate displaced people as well as shitload of farmers that moved into the cities after strong (and somewhat valid) criticism that Chinese people could not go to different cities and needed something like a visa to visit larger cities. Result is large increase the population of major cities. In fact, I don't think there's enough buildings to accomodate people that came in.

On debt rise. When cost of debt-financing is so damn cheap, why would you not take on huge loans? We know inflation is way larger than most interest rates that can be financed in debt issues.

Some other clown mentioned that PBOC is insolvent. You can't respond to every dribble of insanity.

 

Come see for yourself and then have a good cup of tea and a great laugh at self-serving promotion of Mr. Chanos.

Fri, 04/26/2013 - 17:29 | 3503949 Tulpa
Tulpa's picture

Where did you move to PRC from? 

Fri, 04/26/2013 - 19:20 | 3504254 Seer
Seer's picture

Do you REALLY understand simple math?

The targeted growth rates are utterly suicidal.  If the Chinese think that their due diligence in managing growth is going to come to any other end than tragedy then there really is mass stupidity/ignorance (willful) occurring there.  Everyone likes to get on the ride when it's going.

"Result is large increase the population of major cities. In fact, I don't think there's enough buildings to accommodate people that came in."

Cities, by definition, are NOT sustainable.

"I tell you that the great cities rest upon these broad and fertile prairies. Burn down your cities and leave our farms, and your cities will spring up again as if by magic. But destroy our farms and the grass will grow in the streets of every city in this country?."

- William Jennings Bryant

Maybe China 2.0 is neo-commie (like neocons and neolibs in the US).  Pushing folks out of the country means people can be controlled and made to work for some master.  The glitter that you're seeing is the shimmer off of the sword of Damocles.

Fri, 04/26/2013 - 16:51 | 3503825 Kirk2NCC1701
Kirk2NCC1701's picture

There is just ONE Party:  The Feudal Party.  And they party on and on.

There is just ONE Economy:  The Feudalconomy.  All else is futile.

Thus it has always been, with minor variations while the feudal lords were down-sized 6 feet under.  They are now coming back via their heirs, stronger than ever.  Prepare thyself, serf! /s

Fri, 04/26/2013 - 18:37 | 3504146 Seer
Seer's picture

Here we fucking go again!

"Sustainable growth."  It's NOT fucking possible!  Mr, Smith, you're either a complete idiot or you're being deceptive.

Perpetual growth on a finite planet is not possible.  This is mathematical FACT.  If you, someone purporting to be keen on economics, can't manage simple math then why the fuck should anyone listen to you?

Anything can be made to look/sound good if folks ignore the premise... it's then in the realm of fairytales, all basis in fact is not there, kind of like our monetary system being based on virtual crap.

If you're not an idiot then that means you're just looking to promote some new bubble that you can ride up on.  If something cannot continue forever then it means that it WILL stop/cease.

Pensions and savings are being destroyed because there's no real growth left and in order to keep things from instantly collapsing they have to, like vampires, such that blood in order to continue.  Clearly, when all our blood is removed it's done, for us as well as them.

Economies of scale in reverse.  This too is simple math.  It'll unwind in a hurry.

As Dr. Albert Bartlett (someone who understands simple math) put it:

"'Smart growth' destroys the environment. 'Dumb growth' destroys the environment. The only difference is that 'smart growth' does it with good taste. It's like booking passage on the Titanic. Whether you go first-class or steerage, the result is the same."

Fri, 04/26/2013 - 20:06 | 3504386 Radical Marijuana
Radical Marijuana's picture

Of course, I agree, Seer, as my previous comment just above stated!

I also agree that Bartlett provided a good analysis of the basic problem that people deliberately ignore the mathematics of exponential growth. However, that deliberate ignorance is merely one facet of the ways that our society is almost totally dominated by runaway triumphant frauds, throughout everything that we are doing!

Clearly, nature has ceaselessly evolved ecologies, to deal with the perpetual problems which are inherent in the nature of life. It only takes a relatively short while for any system that can reproduce to run into its limits, since it does that at an exponentially accelerating rate. There are always selection pressures at work to first allow the exponential growth, for a while, then to channel it into dynamic equilibria of systems of limitation.

Human beings are the most unusual that we know about, since the human experiment was to build a big enough brain so that its neural networks could sustain a culture, which became another new platform for cultural evolution to take place. That enabled the mental models of the world to become self-selecting systems. Human beings are relatively aware that they are alive, and relatively able to change their behaviour on the basis of that awareness. Therefore, human beings approach the limits to their lives with a relative self-awareness. Human beings were able to build much better models of the world, within which were models of themselves. The whole of science and technology was built on that ability. When that broke through to the industrial revolution (i.e., steam engines and debt engines), we suddenly had another quantum leap.

China was stultified by its overbearing bureaucracy, so that its potential to do things that West later did were present before in China, but were not developed further. Instead, it was the Western powers that sailed steam boats up the Chinese rivers, and blew everything out of the water there, forcing China to accept Western powers, and eventually forcing China to adopt Western technologies.

The progress in science and technologies have provide a quantum leap to human civilization, only to then run into new systems of limits. Thus, harnessing inanimate energy sources enabled the total human population to grow exponentially, for a while longer, but STILL the mathematics of exponential growth makes that absolutely impossible to continue indefinitely, and indeed, difficult to imagine how it could keep on doubling even once more ...

Therefore, we are faced with developing a new human and industrial ecology, within the infinite natural ecologies of our universe as a whole. Obviously, it IS theoretically possible to do those things. However, the obstacles are that everything we actually do now is the result the the past triumphs of deceits, backed by destruction, actually controlling what happened. Therefore, our current real human ecology was set up by murder systems operating on the basis of the maximum possible deceits about themselves, while our monetary systems are also set up to become the maximum possible runaway triumphant systems of frauds.

Attempting to come to terms with the limits of the environment in those circumstances appears to be almost impossible, other than some serious degrees of overshooting, then collapse into chaos. The longer that people can get away with talking about "sustainable growth," the further we are going to overshoot into a condition of unsustainable growth, which necessarily collapses into chaos.

Both China, and the USA, are symbolic leaders of the kinds of social insanities that are prevalent everywhere around the world now ... We are STUCK inside of the profound dilemmas that our real ecology is based upon a murder/money system which are based on the past triumphs of deceits. Thus, the War Kings segued into the Fraud Kings. China was forced to go through Westernization, but NOBODY anywhere has apparently adapted to going through social adaptations to our science and technologies making us become trillions of times more powerful. So far, the ONLY thing those powers have done is enable us to become trillions of times more deceitful, and more able to back up those deceits with the threat of destruction.

Therefore, while there are plenty of possible creative alternatives, and theoretical ways we could develop human and industrial ecologies, those are practically impossible within the established social pyramid systems, which are based on being controlled by the best professional liars and immaculate hypocrites. Thus, the bullshit debates featured so much on Zero Hedge are about how we are supposed to return to "sustainable growth," and whether making more money out of nothing, as debts, will somehow enable us to do that, or not ... Only a few articles here, while almost none in the mainstream, address the issues about "sustainable growth" being absolutely impossible. Furthermore, I am completely unaware of anyone who is paid any public attention who addresses the deeper issues that the only limits to growth are necessarily some systems of death controls.

Therefore, we are building towards having our deceits careen out of control, until the runaway debt insanities cause runaway death insanities ... while there are apparently not the slightest chances of any sane public debates about adapting to the limits to growth, before that becomes too little, too late. The foundations of both the Chinese and American economic accounting systems are BOTH fundamentally fraudulent, and so, it is IMPOSSIBLE for such systems to be reformed, so that they were not insanely self-destructive. Moreover, since everyone who benefits from those systems have every social advantage to continue to promote their lies, we continue towards our fate, of final failure from too much success at controlling civilization with huge lies. Amongst those huge lies is the ability of the vast majority of people to continue to deliberately ignore the plainly obvious scientific fact that endless exponential growth is absolutely impossible, and therefore, "sustainable growth" is an absurd oxymoron. Meanwhile, the opinions about more money made out of nothing, in order to stimulate the economy to continue to grow, is the dominant mainstream moron hope, which has become psychotic addiction to "hopium."

However, there is practically no change, in any sufficient way, to go through the kinds of paradigm shifts that we would need to go through, in order to adapt to the realities which emerge when we finally hit the real limits to exponential growth ... We have not quite done that yet ... but we are getting closer to that tipping point, faster ... Meanwhile, it is mostly business as usual, with our "leaders" being the biggest bullies, spouting the same old bullshit, and, so far, getting way with continuing to do that ... Hence, I find it extremely frustrating that the established systems of legalized lies, backed by legalized violence, continue to be so advantageous to those operating them, that it continues to be almost a complete waste of time to bother to point out any of the factual evidence, or logical arguments, with respect to economic issues, since the established force backed frauds continue generating billions of dollars in bonuses for those taking advantage of those systems.

That "REALITY" has become the exponential growth of money made out of nothing, as debts, which is STILL being promoted by those who are dominant and controlling the mainstream, as something which IS going to resolve our problems, by enabling us get back to continuing to have more economic growth. Both in China, as well as in the USA, and everywhere else, it is almost impossible to wrap one's head around how totally INSANE the runaway triumph of fraudulent accounting systems has become. What that fraudulent accounting system is doing is enabling us to continue exponential growth towards overshooting ... which then MUST result in catastrophic collapses into chaos, triggering more genocidal wars, along with democidal martial law ...

However, after worrying about that, and working on those problems as best I could for several decades, I have come to the conclusion that doing that was apparently a total waste of my time. The only thing that makes personal sense to become more "successful" within our social system is to maximize one's short-term opportunities, while deliberately ignoring the longer term consequences of doing that as much as possible, since the people who actually do that continue to be, by far, the most overwhelmingly "successful" people within our established social systems.

Facing the fact that endless exponential growth is absolutely impossible, from a practical point of view, is a totally useless thing to do. Pretending that we can continue, a while longer, is a far more profitable thing to pretend. Thus, the banksters continue to make more money out of nothing, and are able to take a big slice of that home, or to buy their yacths, or whatever else, while those who point out that that is insane are the ones who look like they are insane, since they are not nearly so successful within the established social systems. The selection pressures which have favoured those who were the best at frauds to become the most successful and wealthy people are already now runaway social insanities ... so much so that those who criticize that are the ones who end up looking crazy instead ...

Fri, 04/26/2013 - 21:43 | 3504690 Seer
Seer's picture

I completely agree with you on all the fundamentals.  I think that I'm still not ready to accept that all "leaders" are necessarily bad, I just think that many have got caught up in the Big Lie and are so entrenched in it that they can't get away from it: like being married to the Mob; ex-CIA; start saying anything that goes against/contradicts the racket and you're not going to be around for very long.

For sure, the Big Liars are sociopaths that are perfectly fine with the notion of violence in order to maintain their positions of "doing God's work."

People fail to look at things in the proper dimensional space.  A way to confront the Big Lie is to always ask for a time reference- HOW LONG is that "sustainable growth" supposed to go for?

The game has been going on for quite some time.  And in all that time the rules really haven't changed: Mother Nature STILL bats last.

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