When it comes to China’s economy, it’s important to note that all the recent stimulus announcements are just that…announcements. They are not actual plans to do anything. The city of Changsha recently declared spending plans approaching $1 trillion. That, along with a lot of other completing plans, got the China bulls fired up.
‘This is a vision, not a investment plan… most of these projects… will be funded by corporate investments. Whether these companies will or will not invest in these projects is determined by market. Only a small numbers of projects will be funded by government’s investment…
‘… We are only making a list of things we wish to achieve, so that companies and bankers can choose some of the projects from the list which they see opportunities. If we do not make such list public, companies will have no idea what the government wish to achieve, and people with money to invest will have no idea what to invest.’
Still bullish on China?
The government must make a list of suggested investments, otherwise private capital will have no idea where the government wants it to go!
If that’s China’s mindset, it’s going to be some Asian Century we’re heading into.
But let’s not finish on a downer. It’s Friday after all. Despite all of this meddling, human ingenuity does occasionally break through the dark clouds of bureaucracy. You have to look hard to find it, because the narcissists dominate the headlines, but innovation is out there. It’s people getting on with their lives and doing things without the hype.
It’s the sort of thing Diggers and Drillers editor Alex Cowie is interested in. He then goes a step further and finds out what sort of minerals go into these revolutionary new processes. And then he shows you how you can make money from ignoring the narcissists and following the trail of innovation.
If we don’t have innovation, we don’t have economic progress. If you support the Greens, you might think economic progress is inherently evil and that a lack of it is not such a bad thing.
But innovation and progress is all about increasing a society’s standard of living. It’s not about being materially wealthier — debt can buy you ‘wealth’ (for a certain amount of time) if that’s what you want.
Innovation is the result of setting minds free, removing barriers and encouraging people to think for themselves. And as the saying goes, innovation — or actually invention — is also the result of necessity. This is why many great ideas come from the pressure of war. When an external force threatens the freedoms of ALL of society, that society bands together to show what it’s really made of.
Why does it take a war to achieve such innovation? We humans have some evolving to do.
for The Daily Reckoning Australia
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