Spotted in passing earlier a bit of international news that I found rather illustrative of the logic behind global capitalism & high finance, and how pervasive it is: a deliberate goosing of the stock market has been taking place in… China?
Three weeks ago, the Chinese government took extreme measures to reverse a massive 32 percent drop in stock prices. The plan worked — over the next two weeks, stocks gained 17 percent. But now the government has a bigger problem: Stocks fell 8.5 percent on Monday, the largest one-day decline in eight years, and people are blaming the government for it.
Among the tactics taken up was the Chinese central bank pumping cash to a state-run intermediary that loans out money specifically for buying stocks. Sound familiar? Remember how the catalyst for the actions of the Fed & Treasury during the height of Capital Paradox was how after some finance players went kablooey the stock market sank? And there was all the talk about “liquidity”? Even now the Federal Reserve is highly wary of taking a foot off the gas, for fear that the casino lights will go out.
Now, one of the rotating boogeymen we’re constantly told to fear is using the same playbook, and for the same reason. It all must go up! Pump that bubble, comrade! What, do you want
the terrorists to win some semblance of actual market forces to apply? That’s how the game goes, big bank always has to get bigger, perpetually, forever, at all costs, regardless of how stupid their bets are or how most people are actually doing.
When you see the numbers on these kind of exchanges, whether in Shanghai, London, or NYC, they’re less prices and more like points in a video game.