scratch-mark

Believe or Wish for What You Want, But We’re Headed Higher

Reading as much market commentary as I do, I don’t think most people have even the slightest realistic inkling of the effect that China and India are going to have on the world financially, and in terms of raw prosperity, in the next decade or two to come. And you know what? I’m tired — really — of hearing and noting that China are a bunch of commies.

We’re a bunch of commies. What’s new?

What’s new is that you can be a commie and still have a nice house, two cars, and take a vacation every year. They’ve gone and done it (us, and them). They’ve figured out how to steal half of everything produced and still have a content population with citizens more prosperous than their parents.


The Shanghai Stock Exchange composite index has shot up about 50% this
year, following a 130% gain in 2006. The Shenzhen Stock Exchange’s
benchmark is up more than 100% in 2007.

Ordinary Chinese are increasingly dipping into their savings
accounts (the country’s central bank reported on May 12 that $9 billion
in savings has been transferred to brokerage accounts at the Shanghai
exchange this year) to bet on mainland stocks. It’s hard to escape the
fact that the country is now in the grip of an historic stock market
mania—more than 8.5 million new brokerage accounts were opened up in
the first quarter.

The desire to strike it rich quick is definitely a big part of the
wave, but it’s also a somewhat rational move for Chinese families.
Chinese interest rates are woefully low for an economy that is showing
signs of overheating—China grew by 11.1% during the first quarter of
2007—and where M2 money supply growth and bank lending are worries for
Chinese central banker Zhou Xiaochuan and other financial mandarins in
President Hu Jintao’s government.

These aren’t your father’s Chicoms. And; see here, and here.
Of course, the Chinese are eventually going to learn that markets top
out when there’s suddenly more people wanting to take profits than want
to get in and that the market will proceed to seek bottom, until a
point where there will be more people looking to get in than sell. And
this can take a few years to cycle through. But humanity being what it
is, it’ll come back and establish new highs and you’ll be off to the
races once more.

I thus conclude that there’s ultimately only one solution to
organized (state sponsored) theft. Just make it irrelevant. Just
produce, prosper, create, produce, and prosper some more. The
alternative is unhappiness and misery. But look on the bright side: you
can wallow in the pessimism of the permabears in markets, or the
pessimism of bloggers like me in politics; and you may one day be
proved right — if you live (in misery and unhappiness) long enough.

Richard Nikoley

I'm Richard Nikoley. Free The Animal began in 2003 and as of 2021, contains 5,000 posts. I blog what I wish...from health, diet, and food to travel and lifestyle; to politics, social antagonism, expat-living location and time independent—while you sleep—income. I celebrate the audacity and hubris to live by your own exclusive authority and take your own chances. Read More

8 Comments

  1. Richard Nikoley on May 23, 2007 at 16:40

    Perhaps I ought to put "irrelevant" in quotes. But I figured most of you would just get what I mean.

    What I mean, first of all, is that the state is here to stay, and it will always steal (because it's here to stay). You have no choice, if you choose to live, but to live with it. Choosing to live, in fact, means that you'll take being stolen from over death, right?

    That being the case, suppose you produce the equivalent of $1 per day and the state takes half. You can spend your time complaining about it and condemning it and trying to half educate, half shame others — only to see the state only grow, and now it takes 51%, and then 52%, and so on.

    Provided you choose to live, and that choice presumes that you don't want to get to where you might choose not to, you've got to keep ahead. Just to keep even, when the state theft reaches 51%, you've got to produce $1.02 just to keep even.

    I say: just produce and keep producing to not only keep even, but to render it "irrelevant," i.e., when you produce $10,000 per day, you hate that half or more of that is stolen, but you're still got a lot and a lot means you can roll it into even more production, and so on.

    This isn't a moral solution. It's merely a practical one that happens to "work" (for me, anyway), the only condition that the state doesn't steal so much that it kills production. Given what's happening in China, it appears that it's even "cool" for commies to produce, now.

    I'm not saying "be happy," just to be as happy as you can.

    You know, it's really no different, in principle, than a slave who had the opportunity to buy his freedom. Should he not try because slavery is wrong and by buying his freedom he would be surrendering, in part, to an evil master? We're all slaves to the state, but we're not all equally enslaved. The more you produce, the more freedom the state allows you to buy.

    So buy it. I'm just sayin'

  2. bob r on May 23, 2007 at 21:25

    They've figured out how to steal half of everything produced and still have a content population with citizens more prosperous than their parents.

    "They" figured out no such thing. "They" get away with it because of the people who did figure something out: how to produce more (of whatever) using less (of whatever it takes) or just plain how to produce something that did not exist before. As long as the rate of theft grows at a lower rate than the productivity growth rate, the producers will be better of in the future than they were in the past — even as the state steals more than it did in the past. It is a funny kind of theft: you are better off, only not as much better off as you should have been absent the theft — so the theft doesn't sting quite as much and some don't even see that they have been stolen from.

    And the theft occurs in at least three distintly different patterns. There is the most blatant and obvious: taxation. Followed by the only slightly less obvious: dictation of actions you either shall or shall not perform and uses of you either shall or shall not make of your own property — irrespective of your own desires in the matter.

    A third form of theft: paper money (by which I mean: government fiat currency; the physical form of it is of minor concern). Without this form of theft the state would be somewhat more restricted in its ability to operate the first two forms noted. Most people seem unable to even understand just how paper money is theft — a sad commentary on their intellectual capabilities.

    Just make it irrelevant.

    Could not possibly agree more. To me it looks like it is a race; which will occur first:
    Will the state gain what is essentially total control?
    OR
    Will the entrepreneurs, scientists, and engineers produce the wealth necessary to finally free us of the state?

    Ray Kurzweil, in "The Singularity Is Near", predicts a continuation of what has been a long term exponential growth in technology and wealth. Seems to me that if he is anywhere near correct then within the next couple of decades we'll have the answer to the questions above.

  3. mandrill on May 23, 2007 at 15:45

    I thus conclude that there's ultimately only one solution to organized (state sponsored) theft. Just make it irrelevant.

    There is no way to render state sponsored theft irrelevant when it is used to fund restrictions on individual freedoms, such as the freedom to produce what you want to, prosper in the manner that you want to, and create whatever you want to. Even through the act of taxation itself the state restricts your freedom to choose how you want to spend that portion of the wealth you produce, and then spends it for you on things you don't want. Taxation can never be rendered irrelevant just by simply producing more, you just end up having more stolen from you.

  4. Richard Nikoley on May 24, 2007 at 08:45

    "'They' figured out no such thing. 'They' get away with it because of the people who did figure something out: how to produce more (of whatever) using less (of whatever it takes) or just plain how to produce something that did not exist before."

    Yea, I didn't mean to imply they created anything much. I'm just suggesting they've become more "savvy" or cunning in how they steal what has been created, and, whereas we have "bridled" (God: I loath the way that term is used in conjunction with capitalism) freedom to make value creation more constrained, the commies have relaxed their bridles somewhat to give the illusion of freedom.

    Us and the commies: we're converging on some middle ground, from opposite directions, and the middle ground is probably approximated by what post WWII western Europe and Japan has become, i.e., tightly controlled and regulated but moderately productive economies with a degree of creative and entrepreneurial initiative.

    In short, they allow just enough freedom to provide plenty of bread and circuses while maintaining a firm and long-term grip on their power. Modern politics.

    Good observation about the rate of theft increasing at a slower rate than the rate of production. I think that's definitely the case (thank god) and it's why I just have to be generally optimistic. Nobody would bother complaining if the state came and stole $20 from you per year. So go and make your life such that what they do take is like $20 to you. Make your life such that's it's hard to really care.

    Kurzweil: interesting character. I check his blog now and then. Great single source for all the way-out technology that's going to make huge differences.

    Technology is almost never integrated into any of people's projections for the future.

  5. James Pruitt on May 24, 2007 at 08:18

    I have to agree with you, Rich. It makes me think back to a post over at Greg's place (when he was still posting there ). What matters is that we stay free in our minds and pursue our happiness in the face of all that would try and stop us.

    Sure, I hate what they do as much as anybody, and I damn sure hate that I work so hard just to have it taken away. But, I don't sit around bitching and worrying about it. I simply try to hide and keep whatever extra I can and just say "fuck 'em" whenever they start debating some new way to inhibit me.

    I don't live my life according to their laws and rules. Never give them a thought. I try and do what I think is right by me and those I deal with and just keep on keeping on. Worse they can do is kill me, but they'll never take make soul.

  6. bob r on May 24, 2007 at 14:29

    "Nobody would bother complaining if the state came and stole $20 from you per year. So go and make your life such that what they do take is like $20 to you. Make your life such that's it's hard to really care."

    Now that's some damn fine advice. I probably should work on adopting that outlook.

  7. mandrill on May 26, 2007 at 03:48

    I see what you're saying Rich, but it is a fine line to walk. The more you produce, the more the state takes, the more they spend on things you don't like. this makes you responsible for everything that the state does, because you allow them to take the funds which let them do it.
    You may make enough so that what the state takes from you is of little consequence to you, and you'll be fine as long as the state ignores you and doesn't trample on your right to produce (which it's hardly likely to as you're their cash cow) but what about those who aren't happy with the status quo and want to change it? Can you live with your responsibility for their oppression? I'm not talking about people who threaten you with violence, terrorists and the like (though that may well be how the state will label them) I'm talking about ordinary people who could well live in your street. People who voice an unwelcome political opinion and are suddenly subjected to 'mistaken' police raids, official harassment and the like. Would you fund that willingly?
    Your approach may be pragmatic and may make your life easier, but it does nothing for anyone else (I can see your counter to this coming) and does nothing to change the status quo. Its all very well you saying that the state causes you misery but it seems a little hypocritical to then say that you're quite happy to bolster its power through paying more taxes.
    You're right in saying that the state is here to stay, there is no escaping that fact, but by willingly producing more and thereby paying more taxes you encourage its growth when it should be curtailed.
    I've read and re-read this comment and think there's something fundamentally flawed about it but can't quite put my finger on it, sorry about that.

  8. Richard Nikoley on May 27, 2007 at 07:38

    "this makes you responsible for everything that the state does"

    That would make humanity's greatest producers the most culpable for the state's most egregious wrongs (and all the smaller ones) and that simply can't be right. I'm sure there's a good argument for that, some some things are just to obvious on the surface to even bother.

    "but it does nothing for anyone else"

    The aforementioned producers have made everything possible for everyone else (and all the littler guys too, like me with my measly $100k employee payroll per month and services to 2,000 clients). This is all in spite of the state's general aggression. And since people live better, healthier, happier now than then, in spite, its the producers they have to thank — that that includes producers of good ideas, like Enlightenment.

    "does nothing to change the status quo"

    See the last sentence, above.

    "you're quite happy to bolster its power through paying more taxes"

    Just resigned to the fact, intent on producing more for myself and others in spite of it and as content as I can be that perhaps some of my efforts have gone some distance to lessen the impact of the state on someone.

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