That was the title of Chapter 15, page 39, of a book I wrote (started in 1985), before, but finished and published in 1992, after it happened, and that was when the Soviets went bust, and communism was dead. “I Hold These Truths,” is the book’s title, and here is paragraph one. “Anything written about Europe, promises to be outdated pretty quickly, but one thing seems to be unarguable, and that is that the Soviets, simply went broke before we did, and as a result of this, millions of Hungarians, Czechs, Poles, Ukrainians, and East Germans, have freed themselves from their decades old yoke of slavery. TV cameras recorded hundreds of thousands of rejoicing people, rattling keys, and burning torches, reveling in their newly found freedom.”
The situation, seems to have changed now, with China arming itself to the hilt, threatening us, Taiwan, and the free world, just as the Russians did, and still do to the Ukrainians. We, like we did 60 years ago, felt threatened by the Soviets, and now China. As I said in several previous columns, I believe that China, eventually, will go the way of the Soviets. Why? Because, like the communist Soviets, communist China, has hundreds of state-owned factories, farms, and huge governments, both local and nation-wide. China’s debt to GDP, is 303%, highest in the world, 20% of their populace is unemployed, and even then, China’s labor costs have out-passed productivity.
China, has a population larger than North and South America, Australia, New Zealand and Western Europe combined, and they are all subservient to many central governments locally, as well as XI’s nation-wide theocracy. Here’s how China’s GDP is spent: 48.1% – government, 9.2% agriculture, and 42.7% industry. Retail sales and industrial production, have sharply declined, and former laws allowing only one child per family, has resulted on an aging labor force.
Endless articles in the Wall Street Journal, all point out China’s economic, on-going disasters. Here are a few sentences from a five- column article in the August 4th Journal: “China’s domestic growth trend is its weakest since final days of Mao Zedong. Chinese developers are defaulting on debts at record levels. Chinese are fleeing urban centers. Sellers far outnumber buyers. Developers’ deteriorating finances have led to construction delays, setting off a mortgage boycott. Bankers too, are being arrested on corruption charges. The highly respected president of China Merchants Bank, was recently locked up. Crushing corruption seems to equal containing capitalism in Mr. Xi’s mind. His ideology places the entire Chinese miracle at risk.” And a final sentence from the last paragraph: “China’s economic turmoil, might trigger a global debt crisis.”
The real estate sector, has defaulted on both interest and principal, on dozens of developers. $8.7 trillion for one, and Chinese debt to local governments are $8.2 trillion. Missed debt payments, un-inhabited cities, empty housing and apartments, all loaded with debt, which buyers are refusing to make continuing payments on, simply cannot be glossed over much longer. In China, when you sign a contract to buy a home or rent an apartment, your rent payments or mortgage payments start, even if the property hasn’t been built!
State owned factories, state-controlled economy, state-owned banks, and state-owned everything, is what killed the Soviets, and is now killing China, and not according to me, but reputable news sources. Can anyone believe the statistics emanating from China, about anything? Few governments tell their citizens the honest truth about a lot of things, and China seems to head the list. Hong Kong, used to be a profitable place, and made lots of money for the Brits, and when their 50-year lease ran out, it was very profitable for China as well, till Xi decided to make Hong Kong, an un-friendly place, hostile to anything not communist, and that has cost China trillions.
Misdirected spending, is always common, when governments direct the spending, rather than the capitalist system, allowing freedom to buy, sell, manufacture, and invent. When hundreds of millions of people are held virtual hostage in Russia and China by two rulers, who haven’t the slightest idea of business or economics, we have Joe Biden, who is destroying America, Like Xi and Putin are doing, only we can vote him out. Russia and China can’t, and they control the media, and press, so the populace is in constant ignorance, as Russians are about Putin’s Ukraine war. Russia spent trillions in its east, building huge coal fields, plus oil and gas works, and all are, and always have been, in the red. To show you how stupid Putin is, he has shut off gas to those who want it, because of their hatred of his actions in Ukraine, making them even less profitable. Cutting off your nose to spite your face? Russian forces, are pitifully un-trained, as opposed to Ukraine’s, and if it ever came to blows, I imagine the Chinese military, would be comparable to Russia’s.
Practically anything China has, in the areas of intellectual and technical knowledge and know-how, have been stolen from us and others, who are free to innovate and invent. Neither Russia nor China, have yet to invent or manufacture cars, trucks, or airplanes, which are in anyway reliable or safe. Un-free people, are in literal straight-jackets, as far as virtually anything is concerned, be it traveling, speaking, investing, writing, broadcasting, printing, and even living. Communist systems, are doomed to fail, just as did the Soviets in December of 1991, after a long life of 67 years, 1922 -1991. China, in 1978, was a rigidly enforced bankrupt, slave nation, which had murdered starving millions, and controlled everything. How much longer can it last? I’ll be a lot less than the Soviet’s 67.
Paper based economies, which are universal, including ours, has, in 100% of the time, gone to absolute zero. I have a client in Virginia, who is proud to tell me that he has $50,000 buried, and his kids know where to find it if they need it after his death. I told him that if he lives any length of time, when they dig it up, it may not buy very much. Why not bury gold or silver? They hold their value. Paper money, is absurd, and should only be used to purchase things needed immediately. Store your surplus assets in real money, and if you bury it, give a map to your kids! Throughout history, in all nations, and in all years of history, universal money, has been and still is, gold and silver, which cannot be debased by politicians and governments.
Don Stott –don@coloradogold.com