This 6-pillar curriculum teaches the basic literacy we need to be personally and financially successful and to do so in a manner in which together we evolve a culture that supports the emergence of an advanced human civilization.
“Physics teaches us that momentum is a powerful force to arrest. Psychology tells us that it is hard to break old habits. And economic experience demonstrates that structural changes tend to be painful and glacial. But time and again, history has been altered by the unexpected….”
~ Stephen Roach, Unbalanced: The Codependency of America and China (2014)
They also need to consider that those w ‘xenophobic immigration’ policies might consider that many of the young migrants only need to work 5-7 years only to go back to their country to retire and live like a king. So, they’re not invested in the outcome, good, bad, or indifferent. The H1Bs I worked with proclaimed this loudly in their Armani suits and shoes.
So, I am confused by the Viking analogy. Are they hinting that given China’s economic situation they are more apt to go to war or spread militarily? Will have to listen to this more than once. Thanks for the amazing information.
I think that is exactly it. When I was in Beijing in 2019 our group was briefed that the deal Xi made to bring him into power was that he promised to take Taiwan. Then, every few years, there is a purge of all the top military leadership when they tell him the military is still not ready. There are cultural issues as well. Taiwan is really the only other country that speaks Chinese and communicates directly with the mainland in their language. The communist party stays in power by stating that they have the best system with the most prosperity. To have a Chinese neighbor with a better quality of life exposes the lie.
Finally . . .Finally some real talk on China.
I will do a second post to address other topics brought up in this interview.
As far as hitting the nail on the head, Catherine’s question about housing capital gains being the retirement package in China is it. And you see evidence of this because household family assets are nowhere else (except maybe those people rich enough to stash money overseas). The banks are unreliable, and the Chinese stock market has no regulation or reporting requirements, so real estate was one of the only places to stash cash. So with the collapse of the housing market goes nearly the entirety of many families’ entire nest egg.
But the big reason this is going to be so much worse is that China has no bankruptcy law. Even worse, they have a system where children and grandchildren are liable for their parents’ debt (interesting that a key part of the US Constitution addresses both of these).
This is important because real estate companies like Evergrand take money for a project in full before they even break ground. Also, the banks issue and start enforcing mortgages at the point the money is handed over, which is before the ground is even broken on a new build. So when a company like Evergrand goes down, there are tons of new projects that have not even started yet, people owed mortgages on – a mortgage that cannot be discharged in any way – a debt that your children will inherit. Even if a bank forcloses on a home, they only discharge the part they can sell, so in a down turn you also have many people losing their home but still owing the mortgage. This is a far different scenario than in the US, where you can walk away from a mortgage and take a credit hit, but you can then pick up the pieces of your life and go back to work without a debt hanging over your head.
So these real estate companies failed because the owner looted these prepayments or put them into riskier investments that return nothing. Since the money was prepaid and was how the construction was financed, there was no money to build the building that people already paid for and owed a mortgage on.
There was an initial response from the government to let all these real estate companies collapse but once they realized it could also take out all the banks because of massive amount of mortgages with no collateral and people who couldn’t or wouldn’t pay (you have trouble paying a mortgage while you also pay rent somewhere else). So the housing starts you see the last few years are just the government forcing the companies to build the projects they already had pre-sold. However, who would pre-pay one of these companies now? Like all bubbles, you could convince people to invest when the price always went up, but now it doesn’t go up, plus you may never even get the property. Then everyone now knows someone stuck with bad loans. There are parents who divorce and the wife gets kids and husband the unpayable mortgage to protect the kids from inheriting the debt.
The report doesn’t even address the “tofu dreg” construction methods or the “nail houses”. These new buildings are a.)on land that is only temporarily leased and sometimes gets handed back to the government in 40-50 years, but many of the buildings won’t even last that long, maybe 20 years, some don’t even make it 1 or 2. We are speaking about a country that speaks about its 5G leadership but has no municipal systems that can supply potable water.
I actually found this link that I put below after I wrote this, but it is two China expats with a compilation of the real estate issues they saw in China. You could see this just walking around. Even in downtown Beijing, the living conditions I saw firsthand in 2019 were often horrible and nothing close to Western standards.
Remarkable how they rocket ahead with important technologies where the society grids along and down in these ways.
However, when you look at the list of tech that rockets ahead, it is all the control grid. China was the prototype. The rocketing ahead is the one area where much of the US is happy to still collaborate. On my trip to Beijing they were big on saying how they were top on 5G, 4G was already fast enough and had better range. What productivity did 5G bring? They have been matching the US in AI but generative AI is still looking for a use case. If you go through the lists of these worlds top tech areas, which ones improve the everyday lives of people. They say the US is still the leader in vaccine tech. Is this something we want to be the leader in? The real tech areas, would be break through energy actual working cobots, public transit, healthier food systems, etc. I would love to see a Solari index of real tech for the people.
Excellent suggestion
Here is a timeline on China that gives some of this report more perspective. The primary economic change in China
In the 1980s while it was not uncommon American families to have a car for each parent, the people of Beijing mostly go around on bicycle and horseback. This was the result of the Communist party run amok with China closed to the rest of the world. I have an older friend who was there at the time and also said when alone with people, they would often tell him horror stories of the Cultural Revolution and Great Leap forward. This was the state China was in when it first opened up under Deng Xiaoping.
Fast forward to the early 2000s, China is experiencing its time of greatest openness and most rapid growth. It seems like China may open up.
2007 -The Chinese Great Firewall starts going into place. Google and other tech companies are being pressured to censor internet content in China. This is just the start of American companies, especially tech companies not being able to do business as usual in China.
2009 – Establishment of the BRICS. China, among others, began to assert independence from Western hegemony.
I believe this is where it really changes. It is the primary pivot. This is after it has become apparent that US companies are increasingly having trouble actually doing any kind of business in China. I also suspect intelligence see the planning of the Belt and Road (as this was likely in the works years before the announcement). Some support for this comes from numbers of foreign direct investment as seen in the chart here:
In the chart, if you take Covid times as an anomaly, then foreign investment instead of continuing to increase halts and declines.
2013- Xi comes to power and announces the Belt and Road initiative. Now, if I were on the Council of Foreign Relations and found out China has taken all the foreign investment and instead of opening up is using the money to circumvent sea lanes and colonize Africa, I would be kind of pissed.
2015 – When we see China GDP stagnate.
2016 – Uber, like many other Western companies before, was forced out. This has been going on with Western companies for years before and will for years after, but there is a good article on Uber and we can see the Washington think tanks are taking note.
Also, in 2016, Trump was elected and came in openly hostile to China’s trade policy, but it is a continuation of the Pivot to Asia.
2019 – My personal visit to Beijing on a trip led by one of the lead economists to the ECB, Richard Portes. We are briefed by the lead economist at Peking University that China’s economy is going into stagnation. Also met many of the communist party leaders heading Companies like Tencent. I was very unimpressed. The Chinese tech sector is having massive layoffs, and hordes of young engineers are finding themselves unemployed. Tecent headquarters on our tour seemed like a ghost town, but hard to know as it was so much theater. Tons of empty shopping malls in downtown Beijing. Also tour guides were saying the party was purposely shutting down many of the independent market districts.
2020-2022 Covid in China – While it was recommended in the west for people to stay at home, people in China were literally locked in their homes for weeks and months on end. Like the US, many small businesses were shut down, but more so in China, and they did not reopen. Foriegners were all forced out by the draconian measures and did not and would not return. A video of the people screaming in Shanghai because they are locked in their apartments and starving.
I can also say at the time, I was doing manufacturing work and trying to source from China. It became near impossible to ship in and out. It caused us to look for alternative sources outside China.
Today – I am running a different manufacturing company. I started trying to source some of my packaging from China. A lot has been shut down. We do see an impact from tariffs. I now source all my packing domestically. I would like to think of it as patriotic, but a lot is due to uncertainty. I would also say I know many other similar manufacturers that moved out of China.
They also need to consider that those w ‘xenophobic immigration’ policies might consider that many of the young migrants only need to work 5-7 years only to go back to their country to retire and live like a king. So, they’re not invested in the outcome, good, bad, or indifferent. The H1Bs I worked with proclaimed this loudly in their Armani suits and shoes.
So, I am confused by the Viking analogy. Are they hinting that given China’s economic situation they are more apt to go to war or spread militarily? Will have to listen to this more than once. Thanks for the amazing information.
I think that is exactly it. When I was in Beijing in 2019 our group was briefed that the deal Xi made to bring him into power was that he promised to take Taiwan. Then, every few years, there is a purge of all the top military leadership when they tell him the military is still not ready. There are cultural issues as well. Taiwan is really the only other country that speaks Chinese and communicates directly with the mainland in their language. The communist party stays in power by stating that they have the best system with the most prosperity. To have a Chinese neighbor with a better quality of life exposes the lie.
Finally . . .Finally some real talk on China.
I will do a second post to address other topics brought up in this interview.
As far as hitting the nail on the head, Catherine’s question about housing capital gains being the retirement package in China is it. And you see evidence of this because household family assets are nowhere else (except maybe those people rich enough to stash money overseas). The banks are unreliable, and the Chinese stock market has no regulation or reporting requirements, so real estate was one of the only places to stash cash. So with the collapse of the housing market goes nearly the entirety of many families’ entire nest egg.
But the big reason this is going to be so much worse is that China has no bankruptcy law. Even worse, they have a system where children and grandchildren are liable for their parents’ debt (interesting that a key part of the US Constitution addresses both of these).
This is important because real estate companies like Evergrand take money for a project in full before they even break ground. Also, the banks issue and start enforcing mortgages at the point the money is handed over, which is before the ground is even broken on a new build. So when a company like Evergrand goes down, there are tons of new projects that have not even started yet, people owed mortgages on – a mortgage that cannot be discharged in any way – a debt that your children will inherit. Even if a bank forcloses on a home, they only discharge the part they can sell, so in a down turn you also have many people losing their home but still owing the mortgage. This is a far different scenario than in the US, where you can walk away from a mortgage and take a credit hit, but you can then pick up the pieces of your life and go back to work without a debt hanging over your head.
So these real estate companies failed because the owner looted these prepayments or put them into riskier investments that return nothing. Since the money was prepaid and was how the construction was financed, there was no money to build the building that people already paid for and owed a mortgage on.
There was an initial response from the government to let all these real estate companies collapse but once they realized it could also take out all the banks because of massive amount of mortgages with no collateral and people who couldn’t or wouldn’t pay (you have trouble paying a mortgage while you also pay rent somewhere else). So the housing starts you see the last few years are just the government forcing the companies to build the projects they already had pre-sold. However, who would pre-pay one of these companies now? Like all bubbles, you could convince people to invest when the price always went up, but now it doesn’t go up, plus you may never even get the property. Then everyone now knows someone stuck with bad loans. There are parents who divorce and the wife gets kids and husband the unpayable mortgage to protect the kids from inheriting the debt.
The report doesn’t even address the “tofu dreg” construction methods or the “nail houses”. These new buildings are a.)on land that is only temporarily leased and sometimes gets handed back to the government in 40-50 years, but many of the buildings won’t even last that long, maybe 20 years, some don’t even make it 1 or 2. We are speaking about a country that speaks about its 5G leadership but has no municipal systems that can supply potable water.
I actually found this link that I put below after I wrote this, but it is two China expats with a compilation of the real estate issues they saw in China. You could see this just walking around. Even in downtown Beijing, the living conditions I saw firsthand in 2019 were often horrible and nothing close to Western standards.
https://youtu.be/lKbLB_T-IjY
Remarkable how they rocket ahead with important technologies where the society grids along and down in these ways.
However, when you look at the list of tech that rockets ahead, it is all the control grid. China was the prototype. The rocketing ahead is the one area where much of the US is happy to still collaborate. On my trip to Beijing they were big on saying how they were top on 5G, 4G was already fast enough and had better range. What productivity did 5G bring? They have been matching the US in AI but generative AI is still looking for a use case. If you go through the lists of these worlds top tech areas, which ones improve the everyday lives of people. They say the US is still the leader in vaccine tech. Is this something we want to be the leader in? The real tech areas, would be break through energy actual working cobots, public transit, healthier food systems, etc. I would love to see a Solari index of real tech for the people.
Excellent suggestion
Here is a timeline on China that gives some of this report more perspective. The primary economic change in China
In the 1980s while it was not uncommon American families to have a car for each parent, the people of Beijing mostly go around on bicycle and horseback. This was the result of the Communist party run amok with China closed to the rest of the world. I have an older friend who was there at the time and also said when alone with people, they would often tell him horror stories of the Cultural Revolution and Great Leap forward. This was the state China was in when it first opened up under Deng Xiaoping.
Fast forward to the early 2000s, China is experiencing its time of greatest openness and most rapid growth. It seems like China may open up.
2007 -The Chinese Great Firewall starts going into place. Google and other tech companies are being pressured to censor internet content in China. This is just the start of American companies, especially tech companies not being able to do business as usual in China.
2009 – Establishment of the BRICS. China, among others, began to assert independence from Western hegemony.
2011 – Obama announces the pivot to Asia.
https://www.brookings.edu/articles/the-american-pivot-to-asia/
I believe this is where it really changes. It is the primary pivot. This is after it has become apparent that US companies are increasingly having trouble actually doing any kind of business in China. I also suspect intelligence see the planning of the Belt and Road (as this was likely in the works years before the announcement). Some support for this comes from numbers of foreign direct investment as seen in the chart here:
https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=CN
In the chart, if you take Covid times as an anomaly, then foreign investment instead of continuing to increase halts and declines.
2013- Xi comes to power and announces the Belt and Road initiative. Now, if I were on the Council of Foreign Relations and found out China has taken all the foreign investment and instead of opening up is using the money to circumvent sea lanes and colonize Africa, I would be kind of pissed.
2015 – When we see China GDP stagnate.
2016 – Uber, like many other Western companies before, was forced out. This has been going on with Western companies for years before and will for years after, but there is a good article on Uber and we can see the Washington think tanks are taking note.
https://www.heritage.org/international-economies/commentary/uber-forced-out-china
Also, in 2016, Trump was elected and came in openly hostile to China’s trade policy, but it is a continuation of the Pivot to Asia.
2019 – My personal visit to Beijing on a trip led by one of the lead economists to the ECB, Richard Portes. We are briefed by the lead economist at Peking University that China’s economy is going into stagnation. Also met many of the communist party leaders heading Companies like Tencent. I was very unimpressed. The Chinese tech sector is having massive layoffs, and hordes of young engineers are finding themselves unemployed. Tecent headquarters on our tour seemed like a ghost town, but hard to know as it was so much theater. Tons of empty shopping malls in downtown Beijing. Also tour guides were saying the party was purposely shutting down many of the independent market districts.
2020-2022 Covid in China – While it was recommended in the west for people to stay at home, people in China were literally locked in their homes for weeks and months on end. Like the US, many small businesses were shut down, but more so in China, and they did not reopen. Foriegners were all forced out by the draconian measures and did not and would not return. A video of the people screaming in Shanghai because they are locked in their apartments and starving.
https://www.youtube.com/watch?v=0K0YFQ8Ww5A
I can also say at the time, I was doing manufacturing work and trying to source from China. It became near impossible to ship in and out. It caused us to look for alternative sources outside China.
Today – I am running a different manufacturing company. I started trying to source some of my packaging from China. A lot has been shut down. We do see an impact from tariffs. I now source all my packing domestically. I would like to think of it as patriotic, but a lot is due to uncertainty. I would also say I know many other similar manufacturers that moved out of China.
De-globalization is on.