A friend of mine just got back from that country: he tells me Christmas is an incredibly big deal in Beijing, with Santas everywhere, Christmas carols, decorations, lights, shopping, trees … everything.
Ebeneezer Scrooge? It seems that decades of making cheesy decorations for the USA have given China an incentive to absorb some of that shabby holiday cheer. I wonder if they (‘They’) have eggnog?
Do ‘We’ have eggnog, anymore? What about Yule logs, Father Christmas, Black Peter? Remember Zwarte Piet, the Moorish accomplice of Sinterklaas who went around beating bad kids with a stick? How about Krampus, the Christmas demon? Straight out of Germany, everything you need to know about the sadistic German national character is embodied in Krampus, who stuffs children into a sack and takes them to hell.
Stuffs Jews into boxcars and sends them to Treblinka … Merry Christmas, you Christ- killing sub-humans! Christmas is all about authority run completely, absolutely amok: it’s about corruption, conformity and punishment. If you are ‘good’ according to some bureaucratic shitfist with a ‘paper’ you are given a bribe and required to offer one at the same time. If you are bad you are cast into a pit.
Dear ol’ Dad used to bring eggnog home every Christmas in a milk- carton-ish affair. It tasted like mud with sugar added. I suspect the adults added booze. Real eggnog is about the booze as is Christmas in general. Christmas in the US really didn’t take off until the Roaring Twenties, radio and mass marketing arrived along with Prohibition, stock swindling and gangsters. Prohibition made booze risque and wildly fashionable along with the Frank Nitti’s and Johnny Torrio’s who supplied it. Christmas became a fabulous marketing opportunity, not just for little kids. Fashion and merchandising joined sex which became the foundation- stone of advertising. Whoring for big business hollowed out the Fat Man, demons and Jesus and reduced them to wraith- like shills. Like everything else in perverse post- Warhol America, Christmas has been strip mined for every sales angle leaving what little substance remains to be used as fill dirt.
Boomers must remember those booze- soaked Christmas parties leading to sex @ the office? This was the ‘Fred MacMurray’ ‘Man in a Gray Flannel Suit’ era. Shoveling some ‘Made- in- China’ train sets and plastic horses @ the kids then racing back to that ‘hot tamale’ in accounting and having drunken sex on the top of a desk.
People with the good luck to have a desk today will not consider sexing about on it. Real unemployment @ 20% and 42 millions on food stamps tends to focus the mind. Christmas 2010 is all about desperation … while favored finance parties like like it’s 2004, the good cheer is not felt elsewhere. The tremulous public sits in front of cold fireplaces in unheated houses sweating with anxiety over what will come down the chimney.
Organizing Christmas @ our house was on a par with the Normandy invasion. The perfect tree had to be found which often meant sitting in a cold car for hours over a period of several days. The tree was then screwed around with endlessly then spray- painted silvery white. All this took place under the watchful direction of Obersturmbannfuhrer Mom. Errors with tree, spray paint or decorations were not permitted. Wrapping was to be just so and gift arrangement under the tree a science not far from arranging magnets in a cyclotron. All wrapping was recycled from previous years: Mom was a child of the Great Depression, after all.
This was done to add luster to packages of socks and underwear. We got clothes we would then wear to school. Most didn’t fit because they were bought on sale the year before; growth was ‘estimated’ as is the case now of GDP ‘growth’ by the Department of Commerce.
Christmas was a time where the requirement was to be nice to everyone even as they were being insufferable to you! The Gestapo was always watching and beatings administered to those not toeing the line. I learned early- on the world is without pity when good morale is enforced with the knout. Meanwhile, the endless array of pointless tasks extended into the school days: cutting paper outlines and giving Christmas cards to the lout that sat next to you in class. This was the same lout who would wait between classes to fight you.
Did Ezzard Charles have to give a Christmas card to Rocky Marciano? (He probably did, actually, they were friends.)
Back at the ranch, the supremacy of Catholic ritual was set in stone. There was the endless Advent nonsense; creches and cardboard punch out Jesus’s needed tending and nevermind not doing the job properly. Christmas @ my family’s house was an Americana version of the Spanish Inquisition with all the baroque tendencies and dark, heavy furniture. When I read Poe’s ‘Pit and the Pendulum’ with the seven guttering candles and dark judges I knew that story was all about Christmas. Caught between the rock of spam on one hand, the hard place of religiosity on the other, Poe’s character gave an inappropriately tinted snow-flake shaped Christmas card to his enemy. Into a torture chamber with him!
By age 12 I absolutely detested Christmas with the same soul wrenching passion Captain Ahab reserved for white whales. Over the years, Christmas has not improved: A friend and I would go out looking for bars open on Christmas day. Most places were closed save where cops and newspaper reporters hung out. Cast in shades of depression blue on Christmas day, there were always more drunks than usual. When I lived in New York, I would go to Chinatown because the rest of the world city was shut down. Later, I became an instant Moslem on December, 25th. I’d go to the Afghani restaurant that taxi drivers and delivery men went to in order to find something to eat.
Life on the streets in the big, dirty city is hard enough. Those without families or houses, trees, Santas, carz or other accoutrements of modernity are losers whose anger becomes magnified on Christmas. Gifts and warm nights are not for them, only alcohol, dope or suicide. I have been robbed on Christmas and stabbed. Last year my father died two days before Christmas. It is a holiday filled with dread.
Now, the Chinese have imported Christmas. What respect I had for the Chinese people is evaporating fast. A worse example of slick modernity and consumption/waste in the repressive American- gangster style cannot be imagined. The sad beauty of some dude being born in a shit house in Roman Judea with self-sacrificial purpose of redeeming humanoids from … what, exactly? … is purged by a tsunami of endless and inexorable merchant ‘obligations’ stuffed into SUVs and Giant pickup trucks. Nothing but waste from Sea to shining Sea. From Gobi Desert and Siberia to the Himalayas to the Korean Peninsula and the Yellow … shining Sea.
Andy Xie looks toward China and doesn’t see much to like, either:
Good Tidings in 2011One could describe the global economy as a race between the U.S. and China, to see who goes down first
The global economy may be coming up for a breath of fresh air in 2011. Fiscal and monetary policies around the world have been highly stimulated for three years. The additional monetary and fiscal stimulus measures by the U.S. could generate an upside surprise to its 2011 growth rate. Most emerging economies continue to grow rapidly. By the middle of 2011, most analysts may declare that the world has finally put the financial crisis behind.
The reality is quite different. The global economy is kept afloat by massive monetary and fiscal stimulus around the world. The main problem in the global economy – high costs and declining competitiveness in the developed world, and inflation plus asset bubbles in the developing world continue unabated. Either inflation in the developing world or unsustainable sovereign debt in the developed world will spark the next crisis.
Xie admits stimulus is a failure in the US as well as in China:
I have argued several times before why the U.S.’s stimulus won’t bring lasting growth. I’m not sure that the stimulus advocates in the U.S. believe what they say. The real intention for the new Obama tax cut is to get him re-elected in 2012. The mid-term election this year shows that, unless the U.S.’s unemployment rate drops significantly, he will lose his re-election bid then.The Fed’s intention, I think, is to inflate away the U.S.’s debts. The U.S.’s household sector needs to cut its leverage by half to become normal again. If it is done through saving more, the U.S. economy will be weak for a long time, which would keep the fiscal revenue low and the government deficit out of control. The U.S. could slide into a vicious spiral. If the Fed manages to bring it down through inflation, the U.S. economy may escape such a fate.
Inflation is good for the U.S., because foreigners own nearly 100 percent of its GDP in financial assets. With its massive U.S. debt holdings, China will suffer especially hard. Indeed, if China’s foreign exchange reserves evaporate in value, it becomes very vulnerable, unless its structural problems are solved.
Regardless of how one views the intentions and effectiveness of the U.S.’s policies, they lead to a good environment in 2011 for China to tackle its inflation problem without worrying about a big growth slowdown.
Stability, not fast growth, is China’s priority.
China’s nominal GDP may reach US$ 6 trillion in 2010. If it rises at 10 percent per annum in the next decade, half as much as in the past decade, it would reach US$ 15.6 trillion by 2020, rivaling the U.S.’s GDP today. Stable growth, rather maximum growth at high risk is now in China’s best interest.
Some analysts argue that a developing country must go through a period of breakneck and unbalanced growth for it to jump out of poverty. I share this view. For most developing countries, they need to spend as much on infrastructure and increasing manufacturing capacity as possible. The conventional view on investment efficiency doesn’t apply to developing countries. But, China has jumped through already. “Steady as she goes,” can bring China into the developed world in the foreseeable future.
Now is not the time for China to take on too much risk for maintaining growth. Even a six percent growth rate is good enough for China. China should err on the conservative side in the trade off between growth and stability.
Growth … grifters and grasping for the way of life that once seemed so easy but has turned into a pocket full of spears. The hands are out for the money from whomever it can be had:
The U.S. is dealing with its consequences of its financial crisis by running up government debt. It is doing what some European countries have been doing. Of course, the Fed can monetize the government debt, i.e., the U.S. doesn’t have to beg for help to deal with its public debt in the future. But, printing money on such a scale will likely lead to the total collapse of the dollar’s value, like the Russian ruble in 1998, and result in hyperinflation. While hyperinflation is beneficial to the U.S. by wiping clean its foreign debt, the dollar will forever lose its reserve currency status that might be worth three percent of GDP per annum and over half of GDP in present value. The U.S. may not gain from such a solution.
Xie puts a value on dollar seigniorage, the only thing the US has left to sell the rest of the world. Of course, Xie is wrong about monetizing: the central banks’ owner/clients would not allow it, China and America are flip sides of the same Christmas coin. The American establishment cannot allow monetization as the wealthy own the loans and gain the vigorish. The Chinese establishment cannot allow deflation as the political elites have borrowed too much and the borrowings are pegged to a foreign currency: the dollar.
In this way, China is up a similar creek as Ireland but on a mind- bogglingly larger scale. Xie wonders why the Chinese do not take effective steps against inflation that is beginning to rampage:
The government has been targeting credit expansion for the past year. But, the credit expansion outside of the system has made up for the slowdown within. For example, banks can sell corporate loans to their depositors directly, shrinking its balance sheet to meet the government’s target. But, nothing has changed in reality. Fitch documented this phenomenon in its recent report.The ineffectiveness of the recent measures casts doubts on the government’s sincerity in fighting inflation. The constant and marginal policy announcements could be interpreted that the inflation fighting is now largely a propaganda job. Such perceptions could spark popular panic, which would cause the household sector to hoard goods like rice and cooking oil. When the masses flee from holding money, a full blown crisis will unfold.
I have been arguing for increasing interest rates. That won’t cure inflation either. It is meant to compensate depositors to sustain the value of their wealth. It can prevent social unrest. To cure inflation, China must deal with government expenditures. Unless it is restrained, inflation will continue and keep rising.
There are two ways to limit local government expenditure. One is to cut their funding source. Their main revenue sources are land sales, property taxes, and bank loans. The last source is drying up a bit, as banks are saddled with high exposure to the sector already and are trying to decrease it. This change isn’t biting yet because local governments haven’t spent all the money they borrowed before.
Deflating the property bubble will have a bigger effect on local government funding. Last year, new property sales reached 14 percent of GDP. The money went one way or another into the government’s coffers. Considering the pace of the property market growth local governments expect much more from it in the future. They have planned their expenditures accordingly.
The property under contraction may be worth half of China’s 2010 GDP. The land banks that the property developers hold and local governments have prepared could build properties worth considerably more. If all these properties are sold at the current prices, the money supply needs to expand rapidly, at least continuing the 20 percent per annum pace of the past eight years, i.e., money supply doubling every four years. Runaway inflation is inevitable in such a scenario.
China is probably already past the point of no return. “When” says Xie, not, “if”. China buys oil with dollars or euros (in addition to bilateral exchanges with Russia). Spending dollar reserves rather than yuan overseas on resource inputs is massively inflationary in China. China is living Steve From Virginia’s First Law of Economics: the cost of China’s dollar surplus in the form of Chinese hyperinflation is far greater than the value of the surplus itself. The cost emerges as destruction of the Chinese economy by the need to ‘support’ the value of the surplus. Trading dollars for resources overseas appears gain something of value for them, even as the high dollar prices for the resources feed back and accelerate yuan inflation in China. The more dollars the Chinese spend the higher the rate!
Desperate Chinese mercantilism sucks in more and more dollars so the spending cycle never ends. The vicious cycle is constantly amplified. Both China and the US central bank and its finance clients are locked together in a deadly embrace that neither knows how to break. Not only is China trapped by its F/X surplus, the effect is a yuan revaluation. Fighting inflation with high rates is counterproductive in the face of the dollar carry trade. Capital controls would make the yuan more valuable which would reward the hot money ‘investors’ with spectacular profits at the expense of both the Chinese people and its establishment.
Rising fuel prices in the US are deflationary as funds allocated toward fuel spending is diverted from wages. Rising fuel prices in manufacturing- centric China are inflationary as labor wage demands cannot be waved off. Inflation is a wage- price spiral. High prices in the US without increased wages are simply unaffordably high prices. In China, the high prices cause a demand for more money which workers need to keep pace. In the US, money is marooned behind structure that directs it toward finance. Labor is left with diminishing leverage and diminishing individual purchasing power along with declining aggregate demand.
China’s establishment provides the appearance of purchasing power yet it has no other choice as its own actions are responsible for the price rises in the first place. The losers in China are its savers. In America the losers are ironically its businesses whose customers continue to vanish.
China money market rates jump, may delay tighteningBy Lu Jianxin and Jason Subler
China’s benchmark money market rate jumped 149 basis points to a fresh more than two-year high on Thursday, as traders cited an acute shortage of funds after a slew of official tightening steps.
The weighted average seven-day government bond repurchase rate rose to 5.6789 percent at 0400 GMT from 4.1868 percent at the close on Wednesday, after having repeatedly hit more than two-year highs since late November.
Traders said the money market squeeze was unprecedented since the seven-day repo rate became China’s benchmark for short-term liquidity conditions in the early 2000s, except on a few occasions during mega equity initial public offerings (IPOs).
Such a crunch might force the People’s Bank of China to delay its much anticipated further tightening steps until at least early February when a cash demand peak during the Lunar New Year is over, traders said.
It’s not just the demons of US Christmas the Chinese have imported from the US empire, it is its excess money and credit. Every bit of moral hazard ‘printed’ by Kraken- Bernanke from his ZIRP policy is on its way to feed the furnace of Chinese hyperinflation. Damned if Lord Kraken does or doesn’t. Raise rates and China’s property bubble goes the way of the Tyrannosaurus Rex along with the high- end borrowers in the China Nomenklatura into the bottom of the pit. Raise rates and the US Potemkin economy is revealed as a cardboard Santa and the charade ends with blood in US and Chinese streets.
Revealed along with Potemkin Christmas of 2010 itself: a fest of flogging Moors, mad markets and hubristic policies gone awry. Stay home, children, do not open the doors, clean and load your revolvers and be fearful on this dreadful night of what will come down the chimney.