ARGENTINA – THE FUTURE FOR THE WEST? - Japan – China – the West – Railways Comparison – Living in China –[05-28-24]

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BOOM EDITORIAL THIS WEEK

ARGENTINA – THE FUTURE FOR THE WEST? - BOOM is concerned that Utopian ideologies and poor, incompetent leadership will slowly but surely turn the advanced nations of the Western world into Argentina-like economic basket cases. Sadly, the current social and economic evidence seems to support that thesis.

Argentina fell in love with the Utopian dreams of its inadequate and incompetent leaders about 100 years ago. Since then, the nation has suffered horrendous economic volatility and instability with many dramatic recessions. The people have not benefitted.

The advanced-economy nations of the West must, somehow, now try to avoid that destiny. A thoughtful, wise, knowledgeable leadership that is grounded in realities rather than in Utopian dreams is the key ingredient. However, this is currently lacking.  A graph from the World Bank of GDP Per Capita per Annum for Argentina shows dramatic volatility from 1961-2022.  BOOM, BUST, BOOM, BUST, BOOM, BUST.

24 years of economic contraction (recession) occurred over 60 years. It is akin to being strapped to the deck of a sailing ship forever and destined to encounter hurricane after hurricane after hurricane.

Meanwhile, the rollercoaster economy has averaged zero economic growth per annum per capita as shown in this graph. By the way, BOOM does not expect this pattern to change under the new President, Javier Millei.

GDP GROWTH PER CAPITA USA, EUROPE, UK.  In that same time frame, 1961-22, the US, Western Europe and the UK have displayed much less volatility in economic growth per capita. They averaged about 2% per annum growth until the Global Financial Crisis in 2008 with only eight recessions. However, since 2008, economic growth per capita has fallen to an average of about 1% per annum and they have suffered the foolish, politically-led, dramatic Covid Panic Recession of 2020.

BOOM can only identify two leaders amongst all of those nations who could be described as admirable. Both are from Eastern Europe.

GDP GROWTH PER CAPITA JAPAN.  Japan was dubbed the ”miracle economy” in the 1960-70’s with only one recession in 1974. However, since 1990, its GDP Growth per Capita has fallen to an average of around 1% per annum. It has had six recessions in that period.

GDP GROWTH PER CAPITA IN CHINA - Meanwhile, China has suffered only ONE recession in 1976 in that whole period. In all other years, it has registered positive growth in GDP per Capita. That is an extraordinary achievement and super extraordinary when compared to what has happened in Argentina, the USA, Europe, the UK, and Japan. China’s consistency of economic growth and stability has been historic. 1.4 billion people have been lifted out of relative poverty, an extraordinary achievement.

JAPAN’S MASSIVE RAIL SYSTEM AND POWER USAGE - RIDING JAPAN’S FASTEST BULLET TRAIN.  BOOM has returned from Japan. Last week’s report on Japan examined economic life in a de-growth economy and how that may play out over the coming decades as the population slowly, but surely declines by up to 30% or more, by 2070.

This week, BOOM will look at Japan’s amazing train system including the wonders of Shinkansen and China’s equally amazing High Speed train network.

It looks impressive?  However, that is a limited map. This is a more comprehensive one which includes linkages to connecting rail systems, over 37 million people live in Greater Tokyo.

Here are Shinkansen High-Speed trains, provided for those who have never seen one.

Rail transport services in Japan are provided by more than 100 private companies, including:

• Six Japan Railways Group (JR) regional companies (state-owned until 1987) provide passenger services to most parts of Hokkaido, Honshu, Shikoku, and Kyushu;

• The nationwide JR freight company; and

• 16 major regional companies which provide railway services as part of their corporate operations. There are also dozens of smaller local private railways.

The entire Japanese rail network carries billions of passengers per year. In the fiscal year 2022, the number of passengers carried via railway transportation in Japan amounted to approximately 21 billion. The system is incredibly complex yet super efficient, truly an economic marvel.

ENERGY USAGE IN JAPAN.  This infrastructure requires a lot of energy and Japan is a nation with almost no hydrocarbon fuels, importing 97% of its oil and is the largest importer of LNG gas in the world. Where does all the energy come from?  This graph shows the energy sources and consumption since 1965, measured in terawatt hours. You will see that total energy consumption peaked around the same time that Japan’s population peaked at 128 million in 2009.

Japan’s energy problems are being solved by falling population numbers and persistent economic contraction.  Japan’s total energy usage has returned to levels that occurred in the late 1980s – almost 30 years ago. It has declined by around 17% since the peak in 2009.

Over 85% of energy consumed is from coal, gas and oil. Almost 10% is provided by solar and hydro. Other “renewables” such as wind and biofuels amount to 2.6% and Nuclear is another 2.6%.

This chart shows the relative percentages of contribution over time. You can see that oil has been steadily declining while coal has been steadily rising.

RIDE JAPAN’S FASTEST BULLET TRAIN – THE HAYABUSA – TOKYO TO HOKKAIDO.  Here is a ride on the fastest bullet train in Japan – from Tokyo to the Northern island of Hokkaido at 350 Km per hour (over 200 mph). It includes the world’s longest undersea tunnel. Watch at Double Speed for the first 10 minutes or so.

COMPARING ECONOMIES – Comparing National Nominal GDP annual numbers between Japan and other major economies in US Dollars/per person. BOOM uses IMF estimates. Other estimates from the World Bank and the United Nations differ substantially.

• Japan’s Nominal GDP/person US$33,000

• Australia’s Nominal GDP/person US$70,000.

• USA’s Nominal GDP/person US$87,000.

• UK’s Nominal GDP/person US$50,300.

• China’s Nominal GDP/person US$13,000.

That comparison requires a look at China’s railway system.  The reality of China is kept secret from the West by its mainstream media.

CHINA TOWERS – CHENGDU.  Chengdu is the capital city of the Chinese province of Sichuan. With a population of 20,937,757 at the 2020 Census, it is the fourth most populous city in China.

CHONGQING – Population 30 Million — Capital of Chongqing Province

SANYA ON HAINAN ISLAND — CHINA’S RESORT ISLAND

CHINA’s RAIL NETWORK AND HIGH-SPEED RAILWAYS.  More than 2.61 billion passengers travelled by rail in China in 2021, up 18.5% compared with 2020, with 2.53 billion passengers carried by China National Railway (CR), according to figures released by the National Railway Administration.

About 10 months ago, on 6^th August 2023, BOOM wrote the following about China,  “ ...the entire US high-speed rail “network” is half the length of just one bridge in China. The US (high-speed rail) “network” is 80 km long versus 42,000 km in China.”

CHINA'S NEW RAIL INFRASTRUCTURE IS MASSIVE COMPARED TO THE USA. The high-speed rail (HSR) network in the People’s Republic of China (PRC) is the world’s longest and most extensive with a total length of 42,000 kilometres (26,000 miles). Most trains travel above 300-330 km/hour (200 mph).

China’s HSR accounts for two-thirds of the world’s total high-speed railway networks. The Shanghai Maglev is the world’s first high-speed commercial magnetic levitation line. The Maglev trains can reach a top speed of 430 km/h (267 mph).

In comparison, the United States has only one high-speed rail service, Amtrak’s Acela. Its length is only 80 km (50 miles) long. Think about that – the entire US high-speed rail “network” is half the length of just one bridge in China. The US “network” is 80 km long versus 42,000 km in China.”

CHINA’S LONG-DISTANCE RAIL NETWORK WAS BUILT IN 12 YEARS! 2008-20 which is currently 40,000 km and will be 70,000 km by 2035.

LIVING IN CHINA.  Last week, BOOM discovered a YouTube channel called ‘Living in China’ presented by a Briton who has lived in mainland China for over 10 years, Jason Lightfoot.  Jason is an avid enthusiast for living in China. He is married to a Chinese woman and they have a cute, happy son called Lincoln.

Clearly, some of Jason’s reporting shows strong bias and borders on propaganda. Worryingly, he seems to blithely agree with mass citizen surveillance and tracking. He seems to be happy with Digital ID identification linked to payment systems. He does not cover the Chinese justice system or its totalitarian political system. He seems unperturbed by the use of face masks (which are disturbingly common in the videos). And he loves to point out America’s failings.

Face masks provide almost no protection against respiratory viral infections. If unsure, you can check out the Cochrane Review published in January 2023. Cochrane Reviews are regarded as the “Gold Standard” in evidence-based medicine:  “Physical interventions to interrupt or reduce the spread of respiratory viruses.” The conclusion was: “The pooled results of RCTs did not show a clear reduction in respiratory viral infection with the use of medical/surgical masks.”

Jason should tell the Chinese government and the Chinese Government should take note.  Perhaps the emphasis on using masks is a control mechanism designed by a totalitarian government to generate compliance. BOOM suspects that is the case. Source  https://www.cochranelibrary.com/cdsr/doi/10.1002/14651858.CD006207.pub6/full

Despite these failings, Jason’s videos are mostly factual and the facts can’t be disputed. He depicts dramatic, gleaming, new subway stations in many Chinese cities. He shows the public parks, the sparkling shopping malls, the safety of city streets, the people travelling and walking in the malls, and the lack of crime. The infrastructure is simply amazing.

See for yourself in one of his videos (eight minutes). If his presentation style annoys you, switch the sound off and watch the video evidence he presents. And, by the way, all of China’s infrastructure and high-speed rail network does not run on windmills or solar panels. These forms of alternative energy production clearly cannot drive China’s present economy or in future.

China Railways vs India Railways, this is truly shocking:

China’s Infrastructure from the FUTURE in Chengdu City:

Americans Won’t Believe What China has Built in the City of Changsa:

Here is a video from another visitor to China, Fel Thommy:

WESTERN DEMOCRACY MUST RESCUE ITSELF.  China has built much of this impressive public infrastructure over the last 12-16 years while the politicians in Western, advanced economies have been engaged in ideological arguments, endless warfare, fear-mongering and super-hyped “pandemic” panic. Our current crop of politicians in the West are almost all short-sighted, deluded and uncaring. Sociopathic behaviour is common. Psychopathic behaviour is observable, with no real concern or compassion evident for the common man and woman in the street.

So, why is the West embarking upon its own, self-directed, economic destruction? Are the politicians in the West being mind-controlled in some way? Or have our democratic systems generated a predictable outcome with power-hungry people inevitably rising to the top?

Sortition is an experiment that we need to consider. Sortition (also known as selection by lottery or democratic lottery) is the selection of public officials or jurors using a random representative sample. In the democracy of ancient Athens, sortition was the traditional and primary method for appointing political officials, and its use was regarded as a principal characteristic of democracy. The Greeks figured out how to block sociopaths 2,500 years ago!

BOOM’s CHINA ECONOMIC INDICATOR IS RISING STRONGLY. BOOM’s key indicator for the Chinese economy is rising strongly at levels last seen 18 months ago. It turned decisively in early January.

Chinese stock markets have continued to rise since making a decisive low in early February. Since then, the Shanghai Composite Index has climbed by almost 19% in three months. If that rate of climb were to continue for 12 months, the index would be up by 80% by the end of the year. That is unlikely to happen but it illustrates the strength of the turn-around.

At the same time, the Hong Kong Hang Seng Stock Index has risen by almost 30%. A stunning performance.

BOOM’S CHINA FORECAST - On 21^st January, 2024, BOOM wrote “BOOM’s China trade indicator has turned upwards in the last two months and is gaining strength. This is a reliable sign of increased Chinese trade which usually precedes a resurgence of the domestic economy.”  “… if the upswing in external trade continues, then we should soon see a rebound in the Chinese economy and a subsequent rebound in stock prices.”

On Sunday 4^th February 2024, BOOM wrote, “The Chinese stock market indices have not yet shown a base formation. However, with huge investment inflows and a recovering trade picture, there is potential for a significant turnaround soon in stock market valuations.”

BOOM’s forecast was accurate. And it looks like BOOM readers in China and elsewhere (especially large fund managers) took notice and decided to start buying.

Then, on February 18, BOOM wrote:  “China’s government is communist. However, they must now encourage all of their citizens to become buyers of shares in Chinese companies. If they don’t, the Chinese stock markets will be at risk of a progressive slow meltdown with no end.

And if that were to happen, the ownership of corporate China will become locked into fewer and fewer hands, creating an elite class of citizens who (will) own the productive assets of China.” …. “None of that is compatible with communist ideology. Therefore, the best way forward is for the central government of China to encourage its citizens to start buying shares as soon as possible.”

“BOOM is expecting such a direction from the Chinese government soon. It is inevitable because the consequences of not doing this are too great to ignore.”

HOW CAN CHINA ACHIEVE SO MUCH SO FAST?  BOOM is not an admirer of a totalitarian government. Communism has many faults. However, it is unwise to ignore China’s historically successful management of its economy over the last 60 years to the benefit of the vast majority of its citizens. The answer to this question lies in China’s unique system of finance.

BOOM’s QUANTITATIVE BOOSTING FOR THE PEOPLES MONEY EXPLAINED: https://boomfinanceandeconomics.wordpress.com/2019/12/15/boom-as-at-15th-december-2019/  AND BOOM’s Perfect Economy: https://boomfinanceandeconomics.wordpress.com/2020/01/18/boom-as-at-19th-january-2020/

COMING NEXT:

• Letter from Great Britain – BRITAIN’S BLOOD FEUD - Saturday, June 1, 2024

• BOOM Global Weekly Review – Tuesday, June 4, 2024

In economics, things work until they don’t.  Make your conclusions and do research.  BOOM does not offer investment advice.

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BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY: LOANS CREATE DEPOSITS — this is how almost all new money is created in the economy (by commercial banks making loans). https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy.  Watch the short 15-minute video and see Professor Richard Werner brilliantly explaining how global banking systems work.

In 2014, Richard Werner provided the first empirical evidence that banks create credit out of thin air.  They do this whenever they issue a loan or, more specifically, purchase a promissory note. This is a walk-through of exactly how they do it.

Many economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

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