by James Corbett
corbettreport.com
March 29, 2017
Riddle me this: As we all know by now, China is bleeding capital, with a record $725 billion in outflows last year alone. Accordingly, the ChiComs have been flipping their lid, imposing new capital controls left and right to try and stop the bleeding. One of the most straightforward of these capital controls limits each Chinese citizen to $50,000 worth of foreign exchange transactions a year. In other words, if they want to buy anything overseas or even park their money in an overseas (dollar-denominated) account, they’re stuck at $50,000 a year.
So why do Chinese nationals account for the vast majority of the US government’s EB-5 immigrant investor program, a program that issues visas for immigrants that invest at least $500,000 in a new American business? Wouldn’t it require 10 years of diligent savings before a Chinese investor could possibly amass the needed capital to qualify for the visa in the first place?
The answer to this seemingly insoluble puzzle isn’t so hard to find, of course. Capital controls don’t work. They just incentivize people to find creative ways around them. Like “smurfing.” This unlikely term has been applied to the process of breaking down large amounts of cash into smaller chunks so they can be moved abroad without triggering capital controls. One smurfer helpfully explained his process to Bloomberg earlier this month:
“Our suggestion to the client is to open three to four personal accounts in the U.S. or line up three to four friends’ accounts, so they can split the money and wire it to different personal accounts without being put on a blacklist by the Chinese authorities,” said a Shanghai-based real estate agent who gave the surname Dong. “It may require a trip to the States to do so to facilitate the process.”
Whatever the case, Uncle Sam is now acting like any seller in any market would when there proves to be strong demand for their product: They’re jacking up the price. If new amendments to the program are passed, it’s going to cost those hopeful Chinese immigrants $1,350,000 to buy their way into the States.
Well, OK, not quite. Actually, the rise in minimum investment capital is not market driven, but politically driven. The EB-5 program has been under attack for a very long time because it’s a giant, wide open door for crony corruption, Ponzi schemes and kickback operations, and, oh by the way, it doesn’t actually increase employment as it was intended to do. (Did I mention Trump’s son-in-law got $50 million from EB-5 funding for his Trump Bay Street project in Jersey City?) The raise in minimum investment under the program to $1.35 million would be as good as scrapping it altogether as it is estimated applications for EB-5 visas would drop by as much as 90% at that price point.
So while there may be time left for an EB-5 bubble from Chinese investors, that window may be closing.
But here’s the funny denouement to this whole story: All those capital controls that China has been plastering over their economy to stop the hemorrhaging of yuan overseas? They may actually be working! News came earlier this month that for the first time in nearly 3 years China has enjoyed net capital inflows.
But as the old adage goes, “Be careful what you wish for, you just might get it.” The internationalization of the yuan and the expansion of the Chinese economy overseas, which has been a linchpin of the Chinese government strategy for working its way out from under its own debt bubble is now in trouble. As major yuan fund operators are now noting, it’s almost impossible to invest in projects overseas now because of all of the new capital controls in place. Now they’re forced to turn back inwards, canceling their projects abroad.
Hmmm. Capital controls that people smurf their way around. Capital inflows derailing government objectives. EB-5s that fail to increase employment. It’s almost as if central planning never quite works out as intended…
To be fair, I don’t think governmental “planning” fails because it’s centralized, but because it’s terrible; in a few words it’s shortsighted, late to the party, lost in translation, an overreaching attempt to codify things which should be allowed to take its natural course, an attempt to correct one mistake with another etc. etc.
Generally, it’s considered that the “state” is a bad manager (queue in massive privatizations) as if it has a mind and will of its own.
When a normally sized company is badly managed it gets a change in management or it goes under.
When a state (like all of them are) is badly managed people jump to excuses and find completely inexplicable reasons as to why the situation is such as it is. It’s pretty much the same deal as with economy in general: instead of it being a science, it’s a religion with masses blindly believing it should get better without understanding what’s going on below the hub.
Instead of changing the management, various agreements are made with people whom the nation can’t control (as if voting did mean control) and who can transcend the government with which the deal was initially made.
So, put in charge a bunch of semi literate driveling idiots, honorary chanting and banner waving included, and they proceed to mismanage. Incredible, who would have thunk it?!
The obvious reason why governments around the world aren’t doing what they are expected to do: they weren’t meant to do it in the first place. They are a bunch of crooks, liars and thieves (top grade countries leaders are also mass murderers to boot.)
Looking at my failed state over here and the bunch of fools running it, I get dizziness. What is going on over here currently is the inability for the two major parties to get a solid majority with a third party rearing its head in further complicating the situation.
Most of these people couldn’t run a small store with one employer on the outskirts of any of our cities. They usually fake their diplomas, for the entirety of their miserable lives have only ever been in politics and are completely detached of the real world.
Since these three parties couldn’t decide among themselves who will be “leading” the first election attempt failed and the “state” was without a “government” for almost one year. Did the nation fail? No. Did anyone even care to notice that the “state” can go “governmentless” for a year without any apparent bad side effects? No.
After another election, with practically unchanged results, and one year later we’re still in the same boat: these assholes can’t work together and we’ll probably get another election soon. As if elections can fix anything lol. All in all, an incredible exercise in pointless.
You make some good points here. If central planning provides for a direction to benefit communities and the nation than it serves a good purpose. Unfortunately, the human-like creatures that are in the position of control only care about themselves. Corruption permeates everything that comes in contact with this corrupt monetary/ financial system. I do central planning when I prepare a garden plot. Prepare the soil for the wellbeing of the plants. Decide the location of the various plants (companion planting) and arrange for watering. However, I do not attempt to regulate which way the roots grow or what order the leaves develop.
Exactly, the problem with central planning is that a) “leaders” are corrupted and b) “leaders” are a bunch of petty idiots entertaining a piss contests. They also like to buy votes with public funds and shower their friends with gifts purchased with the very same funds.
Even if you rooted out corruption, inherent system flaws would remain. For this type of system to work, you’d need to completely prevent vote buying (i.e. sortition) and make the fund flows completely transparent (i.e. bitchain.) You could simply introduce a “crowd funding” platform through which people could choose directly which projects are to be funded with their taxes. Yes, some people will say that people are idiots and can’t make good decisions but that doesn’t negate the fact people in power are power hungry pig whores AND giving the power to the people would put the “leaders” in position to lay the weight of possible bad decisions right where it belongs – the people.
There’s a zillion things one could do to improve this system. Nothing is being done about it, though.
Overregulation is just another facet of the crazed bureaucracy. When that blade cuts on the its swing back, you get deregulation, as we can see today with the markets. I personally don’t believe in the “free” market because sooner or later you’ll end up with one mega corporation suffocating and devouring everything else, but “almost free” market would work great imo.
CONTROL & SPHERE OF INFLUENCE
Decentralization (or localization) puts control within an individual’s sphere of influence.
The further out from an individual’s sphere of influence, the less control of the situation he has.
This is why globalization is a nightmare and nationalism sucks.
If you’re commenting on something I put forth, I haven’t said nor implied that I think regulation can’t help. I said exactly the opposite by saying that I don’t believe in the “free” (or unregulated) market.
I find regulation is required, but it should be provided as such that it prevents abuse, unwanted control instead of enabling interest groups. It should be minimal, natural, in good faith and voted in by the majority. Probably something that should be put into the constitution.
A bit off topic, but worth a read.
The American public is being conditioned to fear and hate Russia, but why?
http://stormcloudsgathering.com/demonizing-russia-the-psychology-and-consequences-of-neo-mccarthyism/
Yea…this is so weird. The media strains pretty hard to feature Russia mixed with controversy.
I was watching the White House Press briefing again the other day. These reporters strain and strain and strain to try to pervert things. It is actually an education to watch these doofus reporters in action…I am surprised they can tie their shoes.
The problem is always the same: people believe those lies because they choose to do so.
Read Antony C. Sutton
“Western Technology and the Soviet Economic Developement” vol 1-3
Also
“National Suicide”
It explains America’s/Wallstreet’s role in building up and propping up Russia to get the Military Industrial Complex going in full swing and here we are poised to put our two armies against each other.
This is how you justify the need to spend billions of dollars in an arms race to no where
But wasn’t Russia’s nuclear weapons capacity nowhere near to that of the US during the cold war? I remember Oliver Stone discussed those figures in his documentary, I haven’t been able to find this information discussed elsewhere.
The question should be, “How did
Russia even get the nuclear capability in the first place?”
I really want to shout out the answers to you but I’m hoping you’ll do the research into the “Russian question”
It’s really quite startling when you think about it.
I’m fully aware Oppenhimer most probably alowed the technology to be stolen and sent over to the soviet boogie man.
My point being: even with all enabling, Russia was nowhere near a match for the insane US nuclear arsenal. You probably don’t even need to have a zillion nukes to be a major player, but that only further compounds the point.
“But wasn’t Russia’s nuclear weapons capacity nowhere near to that of the US during the cold war?”
It very well could be that they had nothing in comparison to US capabilities, but then that raises another startling point:
If the US was covering up Russia’s nuclear capabilities or lack thereof, that also means that the Russian echelon went along with the ruse, thus collaborating with the US.
Could this mean that the Cold War was just a ruse on both sides to begin with?
? Perish the thought.
I no longer wonder about the Answer to that question.
It’s not called a coverup, but insane red scare anticommunism propaganda. With heavy mic spending. Basically war profits without fairly unpopular carnage.
From there I wouldn’t jump to conclusions about possible accomplices in Soviet government at the time. Why would those even be necessarry? Was there danger that someone from the Soviet governent could address US citizens and inform them about veracity of propped up red threat? I think not.
I’m not saying collusion is out of the questione of course. There’s a lot of obvious evidence pointing to it.
This is a very interesting article on China and investing in the U.S. In the suburbs of Dallas where I live, we have a significant Chinese heritage population. I have even advertised before in some of the Chinese newspapers. Even sold a retail business through the Chinese paper to a Chinese couple. I see a lot of quiet investments from that sector. As an outsider, it is hard to get a good take on what is happening with the local cultural community; i.e. there is not a lot of “noise” but lots of business activity and cash is king.
Could this central planning failure be do to the fact that their economic models are based on fallacies? Can capitalism and its accompanying monetary system have within it the capability to produce a sustainable system with the acknowledgement of the fact we live on a finite planet? The NWO aims to achieve this goal but who would wish to live their lives under such an Orwellian-Brave New World manifest?
https://www.youtube.com/watch?v=KIaXVntqlUE
I do not think capitalism can cut it. Simply put, if you put profit before progress, you’re bound to fail.
Oligopolists can create crashes either way. They created them exactly for purposes of glibalization, like the great depression.
Not only do we need regulations, but also people of granite character in charge. And possibly a lot of them because they would get killed mighty often.
Qaddafi compared to this western assholes was a saint, a humanitarian, the holy father. If I had one wish, I’d wish for HRC to hang over laughing over his death.
Corbett’s mentions this Newsbud report in his “Recommended” part of https://www.corbettreport.com/the-brain-chip-cometh/
NEWSBUD Mar 29, 2017 – America’s Shadow Army Invades China The report highlights many things which Erik Prince is up to and also gives us insight into China’s world agenda.
https://www.youtube.com/watch?v=ef6r3gyPTdI
A bit off topic, but felt the need to share this
Hello Angry Losers (a well worded brexit expose)
https://www.youtube.com/watch?v=BdG57lgHFaA
Dang!…that was good!
I love it when someone calls out these think-tank, administrator-intellectual types; the ones “who are idea people” who feel they are only suited as the elite authoritarians to manage groups of worker bee peons. These self credentialed elite know-best “planners for others” can never get their fingernails dirty with actual labor, because it is beneath their skill set — never mind the fact that they are unable to perform actual competent productive activity.
Of course, we have this type in government and in Universities.
But also in the general workforce and resume submissions, I see these type of folks. Their motive is only to administrate other people, telling them what to do.
As a one time employer, I would see these types apply for a job. Whenever one of these types would come on board, trouble would follow.
I’ve learned to see these people you reference as psychos. They see other people as tools which are obviously beneath them and are therefore to be used.