The John Batchelor Show

VIDEO: Market Leninism

August 25, 2015

Monday  24 August 2015 / Hour 1, Block C:  Gordon G. Chang,, in re:   Beijing invited PM Abe to the Chinese "Victory over Japan" parade in commemoration of the end of WWII.  He declined.  Meanwhile the market has been parachuting downward; today was a rout. Chinese economy falling precipitously, Beijing doesn't have the juice to stop it. "Market Leninism."  Stats from China have been opaque, unlikely; now, the curtain is being drawn back.  That 7% growth that Beijing touted is now seen to be 5%, which itself is bogus. Try 2% or maybe flat, at zero.  Can the PBoC buoy the RMB?  In Vietnam, two formal devaluations of the dong; also the Korean won has gone down.  Economics mtg at Jackson Hole next week; Yelling can't raise rates yet in view of China's turbulence.  This makes the world economy more dangerous and prone to collapse – we ought to see banks' doing the opposite. Because of the China factor, we'll see a lot of bad decisions.  Acceleration of massive [humongous] Chinese capital flight – outrageous prices in London, West End - this week, faster even than last week. Chinese capital controls are fierce on paper but don't work. Chinese people are geniuses in avoiding regulation.   Shanghai has just opened down 6.41%; Nikkei eke dow.  Look for civil unrest – a Shanghai crowd detained a metals ___ and turned him over to the police; a sort of citizens's arrest.  There could be no PRC by the end of this year, as Anne Stevenson-Yang said on this program last week.   A theory for Beijing's seemingly inexplicable devaluation of the renminbi: &   The Korea Parlor Games.