Monday, July 13, 2015

Regime Failure In China Is A Real Possibility.....ANOTHER PESKY FACT!

Regime Failure In China Is A Real Possibility

The firestorm now engulfing the China's stock market will shake the regime itself.
China's current maximum ruler, Xi Jinping, is self-evidently an economically illiterate thug. Accordingly, there is no measure he will not try in order to arrest the current meltdown.

He has put the entire regime on the line. When the current desperate measures finally fail, China will descend into social and economic chaos.

By urging households to buy stocks, Xi has put his credibility—as well as that of the Communist Party—on the line. The stimulus measures' failure may incite outrage among those very mom-and-pop investors who have lost everything. Though it's impossible to tell what might ignite it, mass social unrest in China would shake the entire world.

The downside of that wager is profound indeed. The government's creation of the Chinese bull market has disproportionately benefitted state-owned companies—and therefore the Communist Party—by replacing government-guaranteed debt with equity. That equity, of course, has been funded by the little guy—the second, and much bigger, part of the problem. When the state press and government officials began pumping stocks about a year ago, they essentially made a promise to protect the savings of tens of millions of households.

The ramifications of regime failure in China are surely inestimable. 

But one thing is certain. The present worldwide faith preached by Goldman and its imitators in the ability of governments and their central banking branches to keep the bubble expanding will suffer a fatal rebuke.  !!!!!!!!

No comments:

Post a Comment