Wednesday, March 8, 2017

You Don't Know $hit from Liaoning

"I'm just a soul whose intentions are good, Oh Lord, please don't let me be misunderstood."
- Eric Burton and the Animals

If I offended anyone, pardon my French. The words of the old expression may have change, but the thought remains the same. In fact, the Chinese city will add a new twist, "You don't have to be profitable to remain in business."
Economic Hub
Dear reader, Liaoning is one of China's economic hubs. The problem seems to be that this region is inefficient and hires by who you know and not, by what you know. It leads the country in defaults and yet, its doors are open for business. You see, this is an another example of the lie of free trade. Every company is state supported in this fiat nation. You lose a million this quarter, a billion this year, no problem. Fiat daddy will cover it. This does not mean that there are no quality state sponsored companies because there are many in China, Asia and Europe. It just points out that there can be no fair trade in this global environment. Gresham's Law states that bad money(fiat) will drive out good money(precious metals). Sebastian's Law states that fiat entities will drive out free capitalist companies. This is why we need protectionism and if you disagree, you don't know $hit from Liaoning.   
Liaoning is not alone, I could point out examples in France or Germany even Mexico. When one thinks about it, it is amazing how our free capitalist companies compete in this global environment. Yes, I know that our banks get the same fiat protections and I wish I knew what lawyers know about bankruptcy court because it too, seems to have some corrupt under linings. How can a company default, enter bankruptcy and then, reappear like GM and be back in business? I feel that it is totally wrong to steal from workers and investors and still be an on going concern. Even if the original debt is put off into some future date, it should be repaid if the company is still functioning, but that's just me.
Back to Liaoning
There were 125 bankruptcy filings in the province and Liaoning had one-half of all Chinese defaults last year. This is a classic example of state sponsored entities. None of these firms have to pay extra to find financing. They have the complicit understanding that the government will bail them out if necessary.
Case in point: Dalion Machine Tool Group defaulted. They do not respond to questions about their company. They, like hundreds of other Chinese concerns, just go about their way, whatever way that is.
A part of me wants to bring to light the plight of Notre Dame in a similar vein. For those of you who don't know or like the Irish, the school faces the same problem as our capitalist companies face with state sponsored competition. Notre Dame is a small, private school with a student population under 4,000. They compete with state sponsored schools like Florida or Michigan with over 45,000 students. If Florida needs new equipment, a lunch date with the local congressman gets it done. The same for Michigan, Ohio State and all the other excellent state schools. Not so for the Irish, they will sacrifice in some other part of the budget and yet, they compete on and off the field. The miracle is that every once in awhile, a Joe Montana comes along and we win it all. Thank you, St. Patrick(March 17th), Our Lady and of course, God.
Go Irish!