I wanted to pass along some excellent thoughts from Mark Lapolla of Knight Capital. He was in the latest [email protected] and had some excellent thoughts on the overall economic environment.
He touches on a variety of topics including some MMT, but the most interesting portion was his belief that China now resembles pre-depression USA or 1990′s Japan.
Lapolla is astounded at how the world has come to rely so heavily on a “repressive, communist regime employing command and control economic management while violating trade protections and human rights everywhere”.
Attached are the 8 reasons why Lapolla sees similarities between China and USA prior to the Great Depression:
1) Massive disparity of wealth, income and education
2) Rapid industrialisation and displacement of labour
3) Opaque and misleading economic and financial data
4) Massive build-up of leverage across the “rising class”
5) Bubbles in both residential real estate and fixed asset/infrastructure development
6) Accelerating and uncontrolled growth in disintermediated credit
7) Expected transference of economic growth to domestic demand.
8) An accelerating price/wage spiral
I highly recommend reading the piece in its entirety.