This graph's interpretation is actually kind of odd. By denominating both in dollars, the two curves end up meaning different things.
The US curve is the money supply but the Chinese curve is the value of their money supply. If China completely stopped printing money and their currency appreciated, wouldn't the graph look the same?
It would be better to just index each nominal money supply to the same base year.
I am not so sure it would. The base unit is the dollar if they stop printing the supply of money measured in dollars would still be high and the only way it would come down is if they paid their debt.
I'm just trying to avoid the case where the Yuan appreciates against stuff but not against the dollar, which would actually require the dollar to be appreciating more than this hypothetical Yuan.
It is an interesting thought experiment. But I think this chart is showing China’s battle to stop deflation.
If they stopped printing and the Yuan got hardened the demand float would remain constrained due to the CCPs cap controls. But every time they needed dollars to do a trade the demand for dollars goes up thus dollar appreciation.
They need to paper over their mistakes plus a chart like this kills the argument that the trade surplus of over $1T is somehow improving their monetary policy.
Sure- Chinas productive economy is expanding- rapidly- building a domestic and global network of infrastructure - ports, rail, road, shipping, air transport, space and digital. It can make good sense to use fiat debt issuance when the collective return from the capital assets developed as a result is greater than the monetary debasement it causes.
In contrast the US economy is not growing its productive capital and infrastructure- US productive assets are decaying- they cannot compete with Chinas mixed economy model. US productive infrastructure is also decaying- why? Because most of the fiat debt monetary issuance occurring in the US is directed toward inflating the market price of existing assets- not developing new ones or maintaining and improving existing ones.
Because most of the fiat debt monetary issuance occurring in the US is directed toward inflating the market price of existing assets- not developing new ones or maintaining and improving existing ones.
Issuing new money always inflates the price of existing assets. By definition, if you increase the supply of the currency, you increase the price of everything else when measured against that currency.
What you're implying is that the communist party just spends their stolen money in smarter ways than US parties. Probably, but you're overlooking some obvious problems with the whole paradigm. One, monetary issuance means skimming from holders of the currency and transferring their stored labor to people they wouldn't have paid voluntarily, so the system is starting from a place of immoral coercion. And two, it's highly likely that the private sector has a better idea on where to spend this money, because they're the ones who first created the value that is being confiscated and redistributed.
It can make good sense to use fiat debt issuance when the collective return from the capital assets developed as a result is greater than the monetary debasement it causes.
Even if that were true (which it isn't, usually the money is wasted) the result isn't proportionally distributed back to the people who paid into it. It's spread out among masses who can't or won't appreciate it. So logically you've created a society where whoever does the most work is the biggest sucker, because as soon as you produce value, then instead of money, your reward is a gun in your face.
monetary issuance means skimming from holders of the currency and transferring their stored labor to people they wouldn't have paid voluntarily
Yes this is the basis of fiat money. So everyones money is debased to fund something. So, it depends a LOT what that something is.
If the fiat issuance is directed toward purposes which are likely to increase the productivity of the entire economy then it can be argued it is an equitable use of fiat monetary issuance. If instead it is simply pumped into existing assets to inflate their nominal value than its only creating illusory wealth.
The USA and most western economies used to understand this and applied strict limits upon how and where fiat debt capital issuance was allowed. If it was for hydro dam or new roading which would be likely to boost the wider productive economy then it was probably justified...because most people would ultimately benefit.
This is what China is mostly practicing- the ethical and logical application of fiat debt issuance- leveraging everyones collective wealth to grow the collective wealth by investing in productive infrastructure and assets..
In contrast since the neoliberal 'reforms' in the west private bankers (the Zionist fiat debt slavery bankers cartel who own Trump and USA since 1913) have been given near unrestricted ability to issue fiat debt capital toward any purpose- this is an obvious and corrupt misuse of fiat monetary powers.
It's not everyone. It's only people who were productive enough to obtain money, and among those, only the people gullible enough to hold cash and treasury bonds.
Michael Saylor isn't paying for it because debasing the currency is driving up his net worth. I'm not paying for it because I'm not holding any of the currency that is getting debased. So now they have to skim from all of the nocoiners at an even higher rate to make up the difference.
Bitcoin breaks the whole scam by rendering it optional, unless the government is tyrannical enough to ban or prohibitively tax civilian use, as the PRC, Iran, and blue states would.
If the fiat issuance is directed toward purposes which are likely to increase the productivity of the entire economy then it can be argued it is an equitable use of fiat monetary issuance.
No it can't. By that logic I can steal from whoever I want as long as I have a plan to spend it on the greater good. Why would you assume the communist party or any regime has a better idea on where to spend the money that someone else made? And why would you expect anyone to keep working if you're just going to redistribute whatever they earn? How could they even work at all in that environment? They're constantly having to pay for someone else's project.
If it was for hydro dam or new roading which would be likely to boost the wider productive economy then it was probably justified...because most people would ultimately benefit.
Why are you assuming that the private sector can't or wouldn't build a for-profit dam? It absolutely could, and it would be far superior to any government dam.
In contrast since the neoliberal 'reforms' in the west private bankers (the Zionist fiat debt slavery bankers cartel who own Trump and USA since 1913) have been given near unrestricted ability to issue fiat debt capital toward any purpose- this is an obvious and corrupt misuse of fiat monetary powers.
There are never any limits on how a government can issue fiat debt capital. That's the whole problem with a currency by decree.
As long as you've bought in to the altruist morality (the collective needs your money for the greater good) then I can spend your money however I want, as long as I have more guns than you.
Why shouldn't the US tax New Zealand? If the US needs to leverage New Zealand's wealth to invest in global infrastructure in a way that will benefit humanity as a collective, which includes New Zealand, what's the problem? It's the same principle as skimming from citizens to pay for a dam. You just want to draw a bunch of arbitrarily lines to limit who can be the victims and who can be the perpetrators of this morality so that you come out on the winning side.
This graph's interpretation is actually kind of odd. By denominating both in dollars, the two curves end up meaning different things.
The US curve is the money supply but the Chinese curve is the value of their money supply. If China completely stopped printing money and their currency appreciated, wouldn't the graph look the same?
It would be better to just index each nominal money supply to the same base year.
I am not so sure it would. The base unit is the dollar if they stop printing the supply of money measured in dollars would still be high and the only way it would come down is if they paid their debt.
Whatever the stock of Yuan is, appreciation means that stock of Yuan can buy more dollars (assuming the dollar's value is stable).
That is a major assumption!
I'm just trying to avoid the case where the Yuan appreciates against stuff but not against the dollar, which would actually require the dollar to be appreciating more than this hypothetical Yuan.
It is an interesting thought experiment. But I think this chart is showing China’s battle to stop deflation.
If they stopped printing and the Yuan got hardened the demand float would remain constrained due to the CCPs cap controls. But every time they needed dollars to do a trade the demand for dollars goes up thus dollar appreciation.
They need to paper over their mistakes plus a chart like this kills the argument that the trade surplus of over $1T is somehow improving their monetary policy.
This chart shows that the value of all Yuan is increasing in dollar terms.
To me, that would suggest their policies are working better than the US's.
If that were true wouldn’t China have the largest GDP in the world?
Sure- Chinas productive economy is expanding- rapidly- building a domestic and global network of infrastructure - ports, rail, road, shipping, air transport, space and digital.
It can make good sense to use fiat debt issuance when the collective return from the capital assets developed as a result is greater than the monetary debasement it causes.
In contrast the US economy is not growing its productive capital and infrastructure- US productive assets are decaying- they cannot compete with Chinas mixed economy model. US productive infrastructure is also decaying- why? Because most of the fiat debt monetary issuance occurring in the US is directed toward inflating the market price of existing assets- not developing new ones or maintaining and improving existing ones.
Issuing new money always inflates the price of existing assets. By definition, if you increase the supply of the currency, you increase the price of everything else when measured against that currency.
What you're implying is that the communist party just spends their stolen money in smarter ways than US parties. Probably, but you're overlooking some obvious problems with the whole paradigm. One, monetary issuance means skimming from holders of the currency and transferring their stored labor to people they wouldn't have paid voluntarily, so the system is starting from a place of immoral coercion. And two, it's highly likely that the private sector has a better idea on where to spend this money, because they're the ones who first created the value that is being confiscated and redistributed.
Even if that were true (which it isn't, usually the money is wasted) the result isn't proportionally distributed back to the people who paid into it. It's spread out among masses who can't or won't appreciate it. So logically you've created a society where whoever does the most work is the biggest sucker, because as soon as you produce value, then instead of money, your reward is a gun in your face.
Yes this is the basis of fiat money.
So everyones money is debased to fund something.
So, it depends a LOT what that something is.
If the fiat issuance is directed toward purposes which are likely to increase the productivity of the entire economy then it can be argued it is an equitable use of fiat monetary issuance.
If instead it is simply pumped into existing assets to inflate their nominal value than its only creating illusory wealth.
The USA and most western economies used to understand this and applied strict limits upon how and where fiat debt capital issuance was allowed.
If it was for hydro dam or new roading which would be likely to boost the wider productive economy then it was probably justified...because most people would ultimately benefit.
This is what China is mostly practicing- the ethical and logical application of fiat debt issuance- leveraging everyones collective wealth to grow the collective wealth by investing in productive infrastructure and assets..
In contrast since the neoliberal 'reforms' in the west private bankers (the Zionist fiat debt slavery bankers cartel who own Trump and USA since 1913) have been given near unrestricted ability to issue fiat debt capital toward any purpose- this is an obvious and corrupt misuse of fiat monetary powers.
It's not everyone. It's only people who were productive enough to obtain money, and among those, only the people gullible enough to hold cash and treasury bonds.
Michael Saylor isn't paying for it because debasing the currency is driving up his net worth. I'm not paying for it because I'm not holding any of the currency that is getting debased. So now they have to skim from all of the nocoiners at an even higher rate to make up the difference.
Bitcoin breaks the whole scam by rendering it optional, unless the government is tyrannical enough to ban or prohibitively tax civilian use, as the PRC, Iran, and blue states would.
No it can't. By that logic I can steal from whoever I want as long as I have a plan to spend it on the greater good. Why would you assume the communist party or any regime has a better idea on where to spend the money that someone else made? And why would you expect anyone to keep working if you're just going to redistribute whatever they earn? How could they even work at all in that environment? They're constantly having to pay for someone else's project.
Why are you assuming that the private sector can't or wouldn't build a for-profit dam? It absolutely could, and it would be far superior to any government dam.
There are never any limits on how a government can issue fiat debt capital. That's the whole problem with a currency by decree.
As long as you've bought in to the altruist morality (the collective needs your money for the greater good) then I can spend your money however I want, as long as I have more guns than you.
Why shouldn't the US tax New Zealand? If the US needs to leverage New Zealand's wealth to invest in global infrastructure in a way that will benefit humanity as a collective, which includes New Zealand, what's the problem? It's the same principle as skimming from citizens to pay for a dam. You just want to draw a bunch of arbitrarily lines to limit who can be the victims and who can be the perpetrators of this morality so that you come out on the winning side.
This was their tradeoff to preserve manufacturing supremacy and the rest of the world let it happen.