GLORIOUS TO BE RICH IN CHINA AND TO BORROW MONEY IN AMERICA The second spell of phony prosperity was also owing to Nixon’s 1971 blow to global financial discipline. During Greenspan’s first thirteen years at the Fed (1987–2000), the S&P 500 index rose from 300 to nearly 1,500. This humongous fivefold gain has been celebrated by Republican orators as the unfolding of the Reagan prosperity, but it actually measured the arrival of central bank–driven bubble finance: a false prosperity purchased with debt, speculation, and the offshoring of the tradable goods core of the American economy. In 1994, Deng Xiaoping, the Chinese leader who was the driving force behind his country’s radical economic transformation in the late twentieth century, declared it was “glorious to be rich.” His government would therefore ensure that much glory came to the new export factories of China’s Guangdong Province. To that end, the People’s Printing Press of China flooded the economy with newly minted renminbi (RMB) and lowered its exchange rate against the dollar by 60 percent. Not surprisingly, millions of Chinese teenagers, trapped in the hopeless poverty created by Mao Zedong’s disastrous experiments in farm collectivization and backyard industrialization, flocked to Mr. Deng’s bright new factories in the east. Whether they came to get rich or just eat, they constituted the greatest migration of quasi-slave labor in human history. {riosmauricio/wp-content/uploads/2013/07/The-Great-Deformation_David-A.-Stockman.pdf}
Posted on: Mon, 06 Oct 2014 01:05:40 +0000
Trending Topics
Recently Viewed Topics
© 2015