The Party is Over
If you are reading this article, you may think it is about the retail investors’ party that started during the spring of 2020. It is about another party that began in the early 1990s when developed countries decided to externalise all industrial production to China. But, fast forward 30 years, the project of a globalised efficient marketplace turns out to be unrealistic. China has a monopoly on the supply of goods, and its industry drives the commodity prices. What will happen next?
After thirty years of de-industrialisation and de-localisation of the means of production, Western developed countries are facing a double-edged sword dilemma. On the one hand, the last two crises pushed central banks to loose monetary policies, leading to a massive increase in the monetary mass. On the other hand, China has gradually become the world’s goods factory, and the pandemic outbreak reinforced its monopoly. The recent shortages in microchips, raw materials and other products speak for themselves.
Thus, one part of the world is producing physical goods, and another part is having a big party fueled by ephemeral services industries. The party will soon be over for the latter because money printed with no limit might not suffice to buy products. Let’s not forget that the initial role of currencies since ancient Babylon was to facilitate the trade of goods and services. In the current situation, one side has no goods to trade, only money.
China’s recent crackdown on cryptocurrencies is a statement in itself. Beijing leaders are clearly aware they have the upper hand in the relationship with the West and try to cut all leeways that could fragilise their strategy. China aims to play its role as a superpower by weakening all leading fiat currencies.
China is not a superpower, nor will she ever seek to be one. If one day China should change her colour and turn into a superpower, if she too should play the tyrant in the world, and everywhere subject others to her bullying, aggression and exploitation, the people of the world should identify her as social-imperialism, expose it, oppose it and work together with the Chinese people to overthrow it. Deng Xiaoping, a Chinese politician
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