Did someone Flip The Economic Lever To Off In China?

We sometimes forget how rapidly things can change, especially in modern society. We have the potential, due to our system of rapid communication, to alter the way people live in a heartbeat. It is important to remember this when it comes to investments. This underlines the idea it can be here today and gone tomorrow. 

China Is Shutting Down!

A rather revealing piece put out by China Observer claims such a situation has occurred in China. The video shows empty streets, empty shops, and an almost depression-like economy. This is something that AdvancingTime has been saying for months while others were touting the notion China coming out of lockdown would move the world economy forward. Many people have discounted how the crisis overbuilding in the housing sector and several other misallocations of funds have made China a paper dragon. 

The online video shows a once bustling mall in Shanghai now sitting largely empty after years of operation. Most of its stores have gone out of business. One person pointed at a row of closed shops on the street says, "2023 has been a particularly difficult year for workers in Shanghai. People used to think it was relatively easy to make money working in Shanghai, but now, it might be more likely to lose money." 

When this happens, things change and the "dominoes" begin to fall. Yes, people become unwilling to loan money and the economy shuts down. It can be similar to when someone flips a switch. Much of what we do each day is built around faith in the system. When faith is lost, it is amazing how rapidly things can grind to a halt. 

Of course, a lot of this centers on the fact unemployment in China is rapidly moving upward. It is also important to remember that this faith can be difficult to restore. This is another reason governments shouldn't centralize the economy. When they do the weight of restoring faith falls squarely on its shoulders. This generally results in even more government intervention. 

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)