China – Changing Attitudes to Money

June 25, 2013,
Claire Montanaro

It is all about printing money, and the realisation that countries cannot go on producing money which has no back-up in substance – monopoly money some have called it. It seems the Chinese Central Bank has warned that quantitative easing cannot go on, and that banks must take on the responsibility for their lending and debt decisions and not be subsidised by the state, which is what printing money does. The free-for-all must end, and as a result of the statement the Chinese markets had their steepest falls yesterday in 4 years. Meanwhile, in America, the Federal Reserve chairman Ben Bernanke has issued similar warnings resulting, too, in heavy selling on the Dow. There is less clarity about the American position, however, as President Obama has hinted at Bernanke’s coming departure from office and we do not know how far Bernanke’s views are shared by the Administration. The truth has been spoken, however, and the resulting volatility and nervousness shows how much the truth was needed. If powerful governments around the world are beginning to have a greater sense of responsibility to do with balancing the financial books, it would be marvellous. I have seen how individuals have seen the folly of over-spending and over-borrowing and are trying so hard to live within their means, and we are all a little tired of seeing our money disappearing in massive debt interest payment payments created and perpetuated by politicians driven by short term political expediency. There is more to come as the tensions between reality and illusion break down: meanwhile, I am grateful to the Chinese for speaking the truth and so pushing forward the inevitable momentum for honest change. [byline]  ]]>

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I am a spiritual teacher, channel and writer with a special interest in esoteric philosophy and the world in transition, who loves nature and wildlife.  My aim is to help your human and soul journey through spiritual wisdom, spiritual connection and the raising of consciousness.

2 comments on “China – Changing Attitudes to Money”

  1. G'day, Claire!
    Quantitative Easing (QE) was initiated by the U.S. Federal Reserve banking system (Fed) under extraordinary financial conditions (a near-collapse of the U.S. banking system) in 2008, with its concomitant repercussions worldwide. It was extended after the initial U.S. federal fiscal stimulus package of 2009 was both exhausted and not renewed because the Fed saw a need for a *second* federal stimulus package despite the inaction due to the partisan bickering occurring between the executive and legislative branches of the U.S. government. The Fed is seriously considering doing away with QE because the U.S. economy is now in the best shape it's been since early 2008.
    In other words, extraordinary financial times required extraordinary measures by the Fed. The Fed appears to be perceiving a new macroeconomic financial reality and beginning to deal with it. They impress me as knowing that printing money, as it were, was not terribly palatable, but it did manage to keep some very big crocs from collectively taking the U.S. economy down for a death roll. If they hadn't employed QE, a whole lot of people worldwide would have been badly buggered: a Great Depression was avoided, albeit with a Great Recession instead.
    As for the Chinese economy, it is much more command-driven due to the hierarchical nature of the the government of the People's Republic of China (PRC). In one sense, therefore, it bears some resemblance to that of the former Union of Soviet Socialist Republics. That said, from a relatively polar opposite to what the Fed had been dealing with, those with power in the PRC government are seeking to get a grip on their own leviathan. Consider how opaque and intertwined state-run banks and businesses (some of which are run by the People's Liberation Army) are, and you can begin to see how massive the PRC government's problem of asserting fiscal rectitude is - especially with the amount of corruption extant at the local levels. Keep in mind also that they also engaged in fiscal stimulus, something that kept the PRC from experiencing their own recession.
    In my opinion, it is time for fiscal rectitude to come forth - regardless of the major economies you mention in your post. This is because the macroeconomic financial situations in the PRC and the U.S. have changed. Within this context, one has to ask: What are the spiritual implications of using credit (i.e., stimulus and QE)? When is it appropriate? When should it be eschewed?

    1. Thank you as always, William, for your considered response. Yes, it is indeed time for fiscal rectitude - but interesting that both China and the US are backing away from it as they see how markets fear it. It is inevitable, however.

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