Perhaps you read yesterday that the Communist dictatorship of China decided yet, again, to dump trillions of yuan into their fake economy to try to create the simulacrum of prosperity. As before, countless times, it popped the stock market higher and, as has always happened, it eroded almost immediately. As I type this, the majority of gains that trillions of new debt accomplished has been laid waste. Here is what the FXI has done over the past twenty-four hours:
I was amused to read that the dictatorship has multiple levels of monetary policy, which I am not making up: The central bank has outlined five policy stances – “loose”, “appropriately loose”, “prudent”, “appropriately tight” and “tight“. These sound more like bowel movement updates for Chairman Xi than it does an honest-to-God economy. In any case, “appropriately loose” is their latest utterly meaningless “stance”, in a country which hasn’t had its own invention since they dreamed up fireworks in 200 B.C.
Perhaps you’re curious to learn more about what a body of men who have never actually built a business or had a non-government job had to say about boosting their wheezing economy. Here we go:
In 2025, authorities must adhere to the principle of pursuing progress while maintaining stability. A more proactive fiscal policy and an appropriately loose monetary policy should be implemented, enhancing and refining the policy toolkit, strengthening extraordinary counter-cyclical adjustments.
Have you ever read such an unalloyed pile of dog crap in your life? That’s the government mind for you.
Anyhoo, the daily chart of the FXI, shown below, illustrates the last round of government hokum caused a huge increase in volume and an enormous boost in stock prices, only to see it wither away. Since then, each new, umm, loosening, has a more and more meager effect.
The only reality that counts is that the Chinese dictatorship is plunging itself evermore into debt that’ll never get repaid, until such time as they decided that stimulating isn’t working anymore, and they just have to launch a major war to set things right. In the meanwhile, let’s all pretend!
