The Road From Capitalism to Socialism ??
Posted by Wealth Wire - Monday, September 5th, 2011
It is perhaps the saddest story ever told and it has been told over and over again for millennia. It is the never-ending urge to dismantle capitalism after it has created great amounts of wealth.
This has been going on since Roman times as can be seen in this quote from Cicero circa 50 B.C.:
"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance."
Sounds a lot like what needs to happen in the US today, no? In Rome they had economic freedom and it created a massive amount of wealth and innovation. The Government that grew up around it, however, slowly drained and warped the economic climate to the point where people, as many in the US are today, were unproductive and dependent upon the state for their survival. Soon after, it completely collapsed... as will the US.
CHINA - FROM COMMUNISM TO CAPITALISM TO SOCIALISM AGAIN
China has been the most modern case-study of this reversion from communism, back to capitalism and again back to communism. Under Mao's "Great Leap Forward" (government program names never cease to amaze in how egregiously opposite they are to the stated goal) tens of millions of Chinese died of starvation and the once proud Chinese culture was decimated to the point of subsistence living.
Finally, by 1976, it collapsed. Since then the Chinese Government has had to allow some economic freedoms. Either that, or starve the entire country to death.
The magic of economic freedom did its work incredibly quickly in China just as it did with Japan and Germany after World War II where it rebuilt two completely destroyed nations into the powerhouses they became by the 1980s.
Within the span of a few decades China went from being a nation of rice farmers to being a global economic powerhouse and is now the biggest creditor to the US - who has been going in the exact opposite direction.
But, now that so many Chinese have become so rich comes the backlash. The outcry that they need to spread the wealth. How quickly they forget what "spreading the wealth" did during Mao's time.
According to this news article, too many of China's new rich are driving around in flashy cars and have nice things. This makes other people who have not been as productive "feel bad". So, once again, the Government has to come in and play Robin Hood. Steal from the rich and give to the poor.
The Chinese government has even announced plans to implement a "seniors' pension scheme" - along with improved social health care services - by the end of 2015.
If history is any indication, China will keep treading back to socialism until all the wealth has been shared and it will collapse yet again.
THE US - FROM CAPITALISM TO SOCIALISM
The US has been, by far, the most dynamic and productive country of the last century. Nothing comes close. The main reason being that more than any other country during the 20th century, the US railed against socialism. It wasn't perfect in this regard. Not at all. But it still held more true to capitalism in the 20th century than any other country.
The creation of the Federal Reserve in 1913 (central banks are one of the main tenets of communism) began the long, slow road down, however. By 1933 the US had already gone bankrupt and had to confiscate gold to survive. Then, again, by 1971 they were bankrupt again and broke off any link from gold in order to survive a few more decades.
Policies such as FDR's "New Deal" and LBJ's "Great Society" helped to bankrupt the nation along the way. And today easily the most socialist President in the history of the United States presides.
Not that it even matters that much. The following chart provided by GoldSwitzerland.com shows that things have been going in the wrong direction steadily for decades.
After decades of the government (which destroys wealth) becoming a larger part of the economy while the private sector (the one that creates wealth) shrinks, this graph is about to complete what dirty minded technical analysts refer to as a "phallic" chart pattern. The "shaft" part of the formation began in the 1960s and things turned even worse after the "head" formation began to be traced out after the 1990s.
Now with government spending about to cross over and become more of the economy than private spending it will complete the phallic formation. It's only fitting that this chart has drawn out the shape of a penis after all these decades because now, due to all this government involvement in the economy, the US is good and truly f**ked.
Post courtesy of Jeff Berwick, Chief Editor The Dollar Vigilante.
China’s newly rich are flaunting wealth — and giving Communist rulers a headache ....??? Who actually real headache....???
BEIJING — China’s newly rich love luxury products — imported French handbags, Italian sports cars — and even more, they love to show off their bling.
That seems to be creating headaches for China’s communist rulers, who after three decades of exhorting their subjects to get rich are facing growing discontent over a widening income gap. Officials now talk about making sure wealth is more evenly distributed, and how to get the rich to tone it down.
As the global economy deteriorates, and China tries to accelerate its shift to a more consumer-led growth model, Beijing’s leaders see luxury items as a lucrative revenue source. Many Chinese buy luxury products in Hong Kong or abroad to avoid China’s high taxes, so officials are debating a move to slash tariffs to encourage consumers to shop at home.
But the government is loath to be seen as taking any new measures to support the sliver of the population that can afford that pricey new Hermes bag or latest Ferrari, and has delayed any decision on cutting tariffs, according to Chinese media reports and industry analysts.
“The government is facing a conflict,” said Michael Ouyang, representative of the World Luxury Association in China. “They don’t want to promote luxury because they are worried people who cannot afford it will see the advertisements. But they don’t want to limit luxury products because it’s good for the economy. So they’re facing a dilemma.”
It doesn’t help the government’s case when the rich keep showing off their bling.
Exhibit A might be a 20-year-old woman calling herself “Guo Meimei Baby.”
Guo — whose name “Meimei” means “Pretty, pretty” — became a recent Internet sensation in China, and prompted a national scandal, when she posted photos of herself on her microblog posing with her collection of imported Hermes handbags and showing off her white Maserati sports car, called “little horse,” and her (married) boyfriend’s orange Lamborghini, called “little bull.”
The initial outrage was over suspicion that she was linked to China’s largest, government-run charity. But many here said the “Guo Meimei scandal,” as the story became known, exposed a common, and unflattering, aspect of China’s headlong rush to get rich: a tendency among China’s new super-rich to show off how much money they have.
“People like showing off their wealth,” said Yang Xu, who runs a shop called Vogue 2 that specializes in secondhand designer handbags. “The consumption of luxury products has grown too fast. It’s beyond anybody’s imagination.”
In his shop, for example, Hermes bags have become more popular than the Louis Vuitton brands for a simple reason: They are more expensive.
China’s rise in the world market
At a time when Europe and the United States are still struggling with stagnant economies, China has emerged as the premier long-term market for luxury products. Chinese bought $12 billion in luxury goods last year, according to Ministry of Commerce statistics. China will account for 20 percent of all worldwide luxury sales by 2015, according to the McKinsey and Co. management consulting firm.