Sat, Jun 30, 2012 page8

• [ LETTER ]

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  Inkster’s reading list

  I have enjoyed Ian Inkster’s previous op-eds and then I read his latest (“China’s divided route to dominance,” June 26, page 8).

  I have concluded that, with his comment “there is no serious forecast of a Chinese downturn, despite the repeated warnings of China’s many critics,” he must be reading different blogs or tea leaves than I do, and I wonder if he has read my previous letters to the Taipei Times.

  I follow Bruce Krasting, Professor Chovanek as well as Tyler Durden and Inkster’s unwise and flagrant cheerleading for China’s economy has got to stop. I recommend that investors roll at least half of their savings into Commonwealth coins today at their local gold shop while this manipulated price downturn persists, especially since China’s banks are secretly buying bullion through Hong Kong hand over fist.

  Inkster correctly pointed out China’s stupid failures to boost soft power, yet he complains that the Chinese did not buy into the eurozone bailout Ponzi scheme, an idea which of course “shrank into non-existence.” Does he really think that the folks who built the largely unused city of Ordos in Inner Mongolia are going to buy into a house of cards outside their own country?

  He is also right in saying that the Chinese are not stupid. They are just very unwise and do not quite grasp the concept of the return on investment.

  As an example, consider the highest train in the world, which runs from Xining, Qinghai Province, to Lhasa in Tibet, which was financed with massive loans in order to run trains across the vast tundra. How will investors get a positive return on investment when tourists are banned from going there because the main form of entertainment in the region — monk self-immolation — does not happen on a regular enough basis to attract large tourist groups at the right places and times?

  Not only is central planning failing, but the “shadow banking sector” is totally off the leash and not only in China, but all around the world, as the growing Singapore soccer match-fixing scandal shows. Elsewhere, many places like Greece are turning toward an informal barter economy that the government cannot tax — how will that help to turn around the country’s fiscal situation?

  Inkster seems unaware that his listed soft-power items five and six (the closer alliance with Japan and its exploitation of its BRIC group — Brazil, Russia, India and China — membership) are actively in progress today with China increasingly controlling the supply of commodities around the world.

  Considering that normal Chinese savers are getting negative rates of return on their bank accounts when compared with the rate of inflation, all that sloshy money has to flow somewhere, right? Grab it while you can, I guess.

  Of course, Inkster is correct that the Chinese should put more pressure on North Korea to calm the heck down, but will they?

  China and Russia are both making money by selling arms to Syria and other Middle Eastern and North African countries in an ongoing military-industrial-complex proxy-war scenario that former US President Eisenhower forewarned Americans about long ago, with US blood and treasure on the “opposite side of the trade.”

  As the Earth’s natural environment is inexorably destroyed, who but the “1 percent” can possibly benefit from this scenario? I believe that any one of Inkster’s “very negative imperatives piling up” could actually turn into the black swan that ends up taking a big poop on his forehead while he is looking out of the window of his ivory tower.

  The Chinese Communist Party’s central planners have turned both China’s society and economy into a fascist kleptocratic Orwellian machine, yet people seem to forget that 1984 was intended as a preventive palliative, not a business model.

  While unending global warfare might seem to be a sustainable business model for the mega-rich in the short term, rampant improper investment ultimately leads to ruin. In my view, Inkster may be a great academic and historian, but his credibility as an investor must be called into question and I deeply fear for his students amid the neo-Keynesian, anti-research, pro status quo viewpoint he seems to be embracing.

  Torch Pratt

  Yonghe, New Taipei City
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