Yes I don't like deflation. But that is not a complaint about debt as you projected here:
I've already educated you on why deflation is bad but you simply do not understand so I won't try again.
Chinese Economics Thread
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Yes I don't like deflation. But that is not a complaint about debt as you projected here:
I've already educated you on why deflation is bad but you simply do not understand so I won't try again.
You don't need to pay any government debt, government debt is private sector surplus.The more deficit the more growth.
If there is such low pension for some rural population clearly printing money and giving it to these people will result in high growth, because they will spend the given money
If there is such low pension for some rural population clearly printing money and giving it to these people will result in high growth, because they will spend the given money
I've never read a justification for why deflation is bad that didn't rely on invalid axioms.
People tend to confuse between personal finances, and monetary/fiscal policy of a nation.
For personal finances, a person can't print their own USD/RMB so stuff like "living within one's means", "saving", "low debt" etc make sense.
But a nation prints its own currency, so these concepts don't apply as long as inflation, exchange rates, and systemic stability are taken care of. The correct analogy would be if in my own family I use my own created fake currency to govern and incentivize my children. It doesn't matter how many of this fake currency I issue, as long as the incentivization or the "economy" is booming, children are working hard and productively etc.
China currently has an excess of savings, negative inflation, very low interest rates, and no external debt, specially no debt denominated in foreign currency. Ideally they should expand both the monetary and fiscal policy substantially.
They should be printing money and giving it to Universities for science, SOEs for tech development and upgrade, Startups/Companies as risk capital, and what not.
However, it almost appears that they are dealing with fiscal/monetary policy as if it is one's own personal finances.
This only applies to countries that are not net natural resource importers.
Countries that are not net natural resource exporters cannot simply get away with lighting money on fire.
This is Venezuela-tier logic.
Money is, at the end of the day, partially a claim on natural resources.
It's the same reason why Soviet currency was worthless, as they printed way more money than they had net natural resources flows to back it with.
This is despite the Soviet Union being chock full of natural resources.
They went bankrupt because they were importing natural resources since they were printing more money than their natural resource production rate would allow.
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You can clearly see that I have written, "as long as inflation, exchange rates, and systemic stability are taken care of."
In reality, in all 3 phases, it seems that there's a paucity of money supply rather than an excess. There's severe deflation, coupled with huge currency appreciation pressure, and the trust in RMB is increasing.
This should be the time to launch a massive stimulus.
Also, your claim should be net trade surplus/deficit. Money is a claim on all assets and resources, be they financial, housing, natural resources, land, and what not.
The Natural Resources bit is what is important, because that is what is finite. The rest is simply an accounting exercise. Also, global natural resources prices are absolutely skyrocketing due to the excessive global printing already.
Obviously finished goods prices have not followed, which means that huge net natural resources importers like China are totally screwed.
"Just print money bruh" is basically just propaganda that net natural resources exporters spout to get higher margin.
It should be noted that the U.S. is a net natural resource exporter, so this would mean that "just print money bruh" is literally diametrically against Chinese interests.
Natural Resources are not effectively finite. Do you even know how big this world is? Effective Natural resources are directly a result of technological progress. US was a huge net oil importer until it developed the tech for shale oil revolution. Hydrocarbons didn't exist as a natural resource category until oil was discovered, exploited, and its uses recognized. Rare Earths were not even known until the late 19th century.
With just the desert area in Northern China, China could generate so much green hydrogen, methanol, and ammonia that it can become an energy superpower, meet all its domestic demands for hydrocarbons, as well as be a net energy exporter.
Today, mining in deep sea or in earth's crust is mostly infeasible, but if the technology is in place, the amount of resources available below the earth's crust is incredibly vast.
If you have enough cheap electricity, you can literally create hydrocarbons from air. So nuclear fusion can possibly completely change the equation of hydrocarbon generation.
Beyond that natural resource prices are infact not increasing. Oil is at 60 usd per barrel, accounting for inflation, its the cheapest since Covid, and way lower that the height of 120 usd it reached earlier.
It is absolutely incorrect to state that money is primarily a claim on natural resources, if that was the case, natural resource rich countries would never have had a currency crisis. Think Argentina, Zimbabwe etc.
Oil is low because Trump ordered MBS to pump baby pump to get low gas prices at the pump and to screw putin.
Low hanging fruit get picked. Money supply is increasing way, way, faster than production of natural resources is ramping.
You are out of your depth.
I'll give you some LLM slop.
M2 growth vs Copper supply growth
M2 growth vs Tin supply growth
Copper and Tin is a good proxy for technology.
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