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China’s Keynesian Model Is Crumbling. It Needs a Trade Deal, Fast.

In the past decade, the Chinese economy has expanded its central-planned neo-Keynesian model that simply cannot survive without a trade deal. The Chinese manufacturing sector has followed a running-to-stand-still strategy that simply cannot subsist without the enormous trade surplus with the United States.

The Chinese manufacturing sector overcapacity is not an anecdote. It is the norm. China produces 30% of the world’s manufacturing goods but consumes less than 18%, according to CKGSB. Additionally, China’s industrial capacity utilization rate fell to 74.1% in the first quarter of 2025.

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International Institutions Must Abandon “Wokeism”

The scandal over the alleged corruption of the founder of the World Economic Forum (WEF) in Davos would be just an anecdote were it not another example of what has happened recently with many international institutions. The Financial Times reveals that the WEF founder faces accusations of manipulating the organization’s analysis to gain favour with governments.

For years, many of us have watched with sadness as an important forum like Davos shifted from being a centre for debate and confrontation of ideas in defence of free enterprise to becoming a loudspeaker for the most interventionist ideas, the most damaging statism, and a whitewasher of authoritarian governments, spreading the destructive ideas of inflationism, socialism, and wokeism— which, in reality, are all the same.

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When Keynesians predict a disaster, start buying.

I always get excited about a market correction when I read the Keynesian consensus predict a disaster. The same people who claimed massive money printing and soaring government spending wouldn’t cause inflation are the ones who know exactly how tariffs will impact aggregate prices. Fascinating.

In June 2016, sixteen Nobel Prize winners expected higher inflation from tariffs, and it never happened. Furthermore, many of those economists recommended enormous government spending and Federal Reserve quantitative easing in 2020, stating there were no concerns about inflation. However, this led to the highest inflationary burst in thirty years. Reality showed that there was no inflation in 2016-2019 and that the insane printing and spending spree of 2021 led to the current inflationary burst. This happens because many economic experts will always justify all government imbalances and tax hikes but raise alarm at any tax cut or supply-side measure. We should never trust experts that work painfully close to social democrat governments.

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Devaluing the US dollar: How to Make America Poorer Again.

In recent days, we have read numerous articles about a possible agreement between the US administration and its main trading partners to devalue the US dollar. It has been named “The Mar-A-Lago Accord”, a concept inspired by the Plaza Accord of 1985, which aimed to devalue the US dollar to address trade imbalances. That plan failed.

The objective, according to the financial media, would be to weaken the US dollar, boost US export competitiveness, and rebalance global trade. Another proposal involves restructuring US debt by swapping existing obligations for longer-term bonds, such as 100-year Treasury bonds, to ease fiscal pressures. However, this would be a dangerous and potentially counterproductive idea.

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