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China’s “New Era” Is Old Totalitarianism

October 19, 2022

“Who is not subject to these same pressures? More money, more debt, more pleasure, more time, more credit in the system. Our central bank, it doesn’t matter who it is, whether it’s the central bankers or Xi Jinping or you and me. Testing the limits is not that uncommon. But when we reach beyond them, paying for it isn’t either.” — David McAlvany

Kevin: Welcome to the McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. 

When I was a kid, Dave, I think of how many times I tested limits and I can look back and go, “Gosh, that was a close one. I know God was looking out for me on a couple of things.” But I remember being called into the room by my grandmother, who loved the fact that I had a lot of freedoms, but she also knew that I was very much into space exploration when I was a kid. I was six years old when man walked on the moon. All I wanted to do was make a rocket go up, and I thought, “They’ve got fuel in a rocket.” So I went out to the garage and I got gasoline and I filled up a big container with gasoline and then I went inside and I got matches and I lit the gasoline with matches. I had put something on top because I thought the combustion would actually cause the top to go up. Actually, all it did was just really burn. But I look back, Dave, I had absolutely no idea what I was messing with at the time. And how often do we just barely miss it when you go, “Gosh, that was a close one.”

David: That was a close one. Well, I mean, combustible is the first word that comes to mind when I think about the ingredients that are both in the financial markets and in the sphere of international relations today. You can go a long time with combustible ingredients that never cause any harm, right?

Kevin: Yeah Yeah.

David: They’re dangerous.

Kevin: Gas in a can is not as dangerous as gas with a match.

David: Well, exactly. So maybe even they’re inherently unstable, but handled well, just not of great consequence. So the same gas that my eight year old cooks his eggs with can burn down the house.

Kevin: Yeah.

David: And if you talk to a teenage boy from the 1980s, he can tell you, at least this one can, Aqua Net is both great for styling hair and working as a small scale flame thrower.

Kevin: So if your grandma asked you about the Aqua Net, like she asked me about the gasoline, would you have told the truth? I slipped into a lie for a little bit at the time.

David: Well, there’s two truths. Was I styling my hair first or—

Kevin: It’s true.

David: Moving on to bigger and brighter things. There are many things in life that are not dangerous in the hands of one person, and then quite dangerous in the hands of another. So maybe we’re talking about the line between confidence and overconfidence, or awareness, unawareness, educated, uneducated, I don’t know, but your reference, Kevin, to old pilots and bold pilots, but there being no old, bold pilots comes to mind.

Kevin: And I know you to be fairly bold. I know that you’re a limits tester. You’re getting off this last weekend, your last race, and I think there was quite a bit of water on the road when you were biking.

David: Right? So yeah, kind of a minor diversion. This is not quite flame throwing, but could be a bad example. I was riding a bike, generally not a hazardous activity unless conditions are challenging and the navigator’s pushing the limits.

Kevin: Wet roads. Yeah.

David: Sixty turns on a three-loop course after torrential rains, you kind of need to watch your speed. And around the first major U-turn, I locked up the brakes, fishtailed, nearly laid it over. Fortunately, nothing more dramatic or painful happened.