Perhaps no event embodies the unyielding abstruseness and the unforgiving hierarchy of China’s ruling Communist Party as much as its Party Congress, the government’s most important leadership conference. Attended by some twenty-three hundred delegates from across the country, it is held every five years in Beijing’s Great Hall of the People—and when the weeklong meeting finally begins, one can be certain that the crucial politicking has already concluded. What proceeds is a choreographed spectacle bearing fastidiously scripted speeches, pro-forma elections of what has heretofore been determined (a leadership reshuffle in the seven-member Politburo, the highest echelon of power), and, in the case of the 19th Communist Party Congress, which opened today, high-spirited, propagandistic posters reminding the masses that “Life in China Is Good! Everyday Is Like a Holiday!”This is a message that Xi Jinping, who was appointed President at the previous Party Congress, in 2012, is eager to instill in a country that continues to grapple with a vertiginous pace of change and the outsize influence of politics in everyday life. Xi is almost certainly guaranteed another five-year term, if not longer. Since taking office, he has sought to launch the greatest ideological campaign since the days of Mao.Xi has made clear from the outset, he is intent on both defining a new world order and restoring to Chinese culture its former esteem. Yet Xi’s mission should be regarded in the context of a collective and profound post-traumatic stress disorder, the result of almost two centuries of cataclysmic events in China. For every Tang Taizong, who ushered in the golden years of the Tang Dynasty, there were many others like Empress Dowager Cixi, who usurped the throne, crippled the path of progress, and contributed to the downfall of the Qing Dynasty.As Xi made clear today, during his three-hour address to the Party Congress, he sees this moment as “a new historic juncture in China’s development”—and himself as the man to seize it. He seems to believe that the more power he amasses, the easier it will be for him to enact the kind of monumental changes necessary to transform China into the world’s leading superpower. In this sense, he is positioning himself as a savior with a cause noble enough to justify his autocratic turn. The logic is akin to that which animated the ambition of many of the Middle Kingdom’s five-hundred-odd emperors. Sure, Xi has rerouted all tributaries of power to run upstream to him, but isn’t it in the service of rejuvenation?Xi has also used his growing power to curb that of his citizens. Under his rule, China has become increasingly repressive. The media is censored and civil society has been muted. Activists have been silenced and human-rights lawyers arrested. More than a million officials have been disciplined. Despite paying lip service to the constitution—the Party devoted an entire plenary session during the 18th Congress to a discussion of “judicial independence”—Xi is steering the country away from the rule of law and toward the rule of the Party.Xi’s vision for China’s future suggests a great leap backward, in which old lessons remain unlearned.
A paradigm change is indeed underway, but it will be led by cars (autonomous driving and electrification), demographics (aging boomers), the demise of pension plans, a revolt by millennials, and a squashing of the current political class.
A currency crisis is inevitable but it's too soon to say that gold will be back in the picture. Some suggest SDRs, but I dismiss that idea.
King dollar is certainly not dead yet, and contrary to popular belief, having the reserve currency is more of a curse than a blessing.
Why Dollar is King
- The dollar is king because the US has open capital markets, property rights, and the world's biggest bond markets.
- The US also has a Bill of Rights granting freedom of speech and protection from unwarranted searches. China imprisons people for speaking their mind.
- China is a long way from competing with the US on those important issues. In addition, China repeatedly resorts to capital controls to stop monetary flight.
China will not supplant the US for at least two decades and may not ever.
What Made the US Great?
The Constitution's Bill of Rights is what makes the US great. There is nothing else like it in the world. It's a unique constitution put together by a unique set of educated lawyers and other scholars.
The First Amendment grants freedom of speech and freedom of the press.
That's what enables Faber to say what he did. And that's a good thing, whether you agree with him or not! China imprisons or kills people for saying something the state disagrees with. Numerous countries in Europe would fine Faber for such remarks.
The First Amendment prohibits state-sponsored religion. Many Republicans who allegedly want a strict constitution, ought to take a closer look. School prayer does not fit in.
Democrats might wish to consider the Second Amendment.
Everyone should appreciate the right to be secure in their home. That's the Fourth Amendment.
The Sixth Amendment grants a speedy trial.
The subject came up a third time today. In response to the above articles, reader Brindu had this to say:
Hello MishIn your section "What Makes the US Great", you used the points made earlier in " King Dollar". This will be very educational for readers who normally don't dwell on constitutional issues.I have another point worth adding: "A credible, independent and impartial court system accessible to all.". To illustrate how the Constitution and the Bill of Rights worked real time, I reflected back to Nixon and the Watergate era (1972-74). Many of your readers were too young to remember or not even born. Here is a summary of relevant events showing how the points you listed under "What makes the US Great?" worked in actual practice.Daniel Ellsberg leaked the Pentagon Papers to the NYT. Nixon went to court to stop publication, but the judge ruled against Nixon, saying there was no threat to national security. The NYT published the Pentagon papers in its entirety, This is a classic example of the first amendment at work. Many foreign leaders asked why Nixon did not shut down the press. (The UK has something called the Official Secrets Act and can shut down newspapers).Nixon's aides broke into Ellsberg's psychiatrist's office looking for dirt. They went to jail. This is a classic example of the Fourth Amendment at work. Judge John Sirica systematically sent a dozen or more Nixon's aides (Haldeman, Erlichman, Dean etc.) to jail as Nixon watched helplessly. Again, foreigners, unfamiliar with the US separation of powers asked why Nixon just did not throw Judge Sirica in jail. Imagine a judge acting independently in China or in Erdogan's Turkey? This is a classic example of an independent judiciary at work.The parliamentary systems in Europe and Canada are inferior in protecting individual rights like our Bill of Rights. Under parliamentary law, the UK can shut down newspapers. They can wiretap, open mail without a warrant. There is no double jeopardy- in some places, they can try you again and again on the same charge even if you are acquitted. At one time, Australia did not allow its citizens to own foreign accounts. The UK, in the 1960's has capital outflow due to 90%+ marginal taxes. Folks were mailing British pounds abroad and the Government scanned outgoing mail to intercept this.Like you said, "The Constitution's Bill of Rights is what makes the US great. There is nothing else like it in the world."
US Dollar Not Dead Yet
Chinese history speaks for itself. Absolute power in the hands of a man whose actions are rubber-stamped by a mock-up Congress will not make China great.
Wake me up when China has a Bill of Rights granting freedom of speech and protection from unwarranted searches. Add an independent judiciary, a free-floating currency, and the world's largest bond market to the list of China needs.
Mike "Mish" Shedlock