International Affairs: September 2008 Archives
In case the casual observer of the world wasn't aware, the media in China is completely owned and operated by the Chinese government. As much as we Americans complain about the bias and shortcomings of our journalists, at least their reports aren't completely fabricated like this story about a "successful" space flight that launched before the rocket did.
BEIJING - A news story describing a successful launch of China's long-awaited space mission and including detailed dialogue between astronauts launched on the Internet Thursday, hours before the rocket had even left the ground.The country's official news agency Xinhua posted the article on its Web site Thursday, and remained there for much of the day before it was taken down.
A staffer from the Xinhuanet.com Web site who answered the phone Thursday said the posting of the article was a "technical error" by a technician. The staffer refused to give his name as is common among Chinese officials.
Although, I hear that our media also pre-writes a lot of stories, like obituaries for old and important people. I guess just reporting the news is too old-fashioned.
Are we in the middle of a "Great Crash"? Better the middle than the beginning.
It is easy to change the financial system, I argued in my May 20 essay. The central banks can assemble on any Tuesday morning and announce tougher lending standards. But it is impossible to fix the financial problems that arise from Europe's senescence. Thanks to the one-child policy, moreover, China has a relatively young population that is aging faster than any other, and China's appetite for savings vastly exceeds what its own financial market can offer.There is nothing complicated about finance. It is based on old people lending to young people. Young people invest in homes and businesses; aging people save to acquire assets on which to retire. The new generation supports the old one, and retirement systems simply apportion rights to income between the generations. Never before in human history, though, has a new generation simply failed to appear.
The world kept shipping capital to the United States over the past 10 years, however, because no other market could absorb the savings of Europe and Asia. The financial markets, in turn, found ways to persuade Americans to borrow more and more money. If there weren't enough young Americans to borrow money on a sound basis, the banks arranged for a smaller number of Americans to borrow more money on an unsound basis. That is why subprime, interest-only, no-money-down and other mortgages waxed great in bank portfolios.
As always, proper understanding seems to hinge on demographics.
Also note that Spengler wrote this a couple of days ago, presciently predicting the collapse of AIG.
Never forget.
