Listen to the jingle, the rumble, and the roar (and disregard the Russian Ron Swanson)

There’s all kinds of bad news about wars and people getting killed.

I’m going to talk about trains instead.

Actually, I’m just going to rip something off, as usual:

…Iranian deputy ambassador Hossein Deghani explained Iran’s plan to aid the country. He said: “In the view of the Iranian government, trade and transport are two main fields for expansion of Tehran-Kabul relations.” He highlighted the fact that Afghanistan is a landlocked country, and that this has limited its ability to export. He talked of the project for the construction of a railroad from China, through Central Asia and Afghanistan, to Iran.

On February 16, the first train to travel from China to Iran successfully arrived. The train …completed the journey of 5,900 miles in just 14 days. A sea voyage between the two countries takes 30 days longer, at minimum.

China’s 13th Five-Year Plan includes connecting Afghanistan with the emerging Central Asian Rail System. Trains would travel from China’s city of Kashgar to the Afghan city of Herat, and then connect to Iran after crossing Kyrgyzstan and Tajikistan. Access to Iran’s various seaports would ensure that Afghanistan could begin exporting at a much higher rate.

Currently, China’s government-controlled banks are funding railroad projects in 30 different countries. In 2013, China exported $3.23 billion in railroad equipment.

Afghanistan is not a wealthy country. … Though Afghanistan has almost nothing to offer the People’s Republic of China, the central banks are willingly investing billions into putting a railroad through this deeply impoverished country. Chinese banks are funding the project, even as growth in the Chinese economy is notably slowing.

Stability for Central Asia: Why Invest in Afghanistan?

How is it possible that projects for building new, modern railroads in impoverished Afghanistan can be financed, while financing is unavailable to replace a 106-year-old railway bridge in the richest country on earth? Why do Chinese banks invest in the most impoverished, drug-infested, and war-torn country in the world — while US banks are unwilling to invest in highly developed and industrialized Hackensack, New Jersey?

The answer can be found in simplistic phrases used by Mao Zedong, the founder of the People’s Republic. US banks operate as capitalist institutions, where, as Mao put it, “profits are in command.” Banks in the United States lend money in order to make a return on their investment. With the huge rate of public debt amid the shrinking US economy, lending money to replace a dangerous bridge in New Jersey — or to the federal government to beef up the Amtrak system, or to the District of Columbia in order to fix up the DC Metro — is not a smart business move. As the wages of US workers go down, and tax revenue shrinks, “debt crises” are plaguing the western world. During the Great Depression of the 1930s, the US government’s slogan was “give a man a job.” During the depression of the 21st Century, the rallying cry is “austerity.” Government workers are being laid off and public services like food stamps, libraries, and fire departments are being cut. It is clearly not a good time to lend money to the US government.

It’s not a good time to lend money to the Afghan government either. The country is arguably worse off than it has ever been before, but the major banks in China operate under a different principal. The government-owned banks in China operate with “politics in command,” to use Mao’s phraseology.

The decision to build and improve railroads in Afghanistan, as well as Indonesia, Thailand, Africa, Eastern Europe, and elsewhere is not a financial decision for China’s banks. It is a political one. The trains that China is constructing all over the world are part of the “One Belt, One Road” policy, and fit into the overall global vision of Chinese President Xi Jinping. Xi has become well-loved throughout the impoverished countries for his plan to build a “New Silk Road.”

Xi Jinping argues that it is in China’s interest to see people around the world lifted out of poverty. According to Xi, one key to eliminating poverty is the construction of infrastructure. The rhetoric of the Chinese Communist Party on the global stage presents a vision of peace, where countries do not go to war with one another, because they are economically bound together.

In the case of Central Asia, China has a real self-interest in stabilization. The drug-dealing terrorists and extremists of Afghanistan, unleashed and empowered by the US invasion, have recently found their way into China. The recent wave of mass stabbings conducted by extremist groups among China’s Islamic Uyghur minority have not arisen spontaneously. Money from Saudi Arabia and training from the western-backed insurgents fighting against the Syrian government has been used to fund anticommunist takfiris in China’s Islamic regions. Many Chinese people fear that the horrors unleashed in places like Paris and Brussels could eventually happen in Chinese cities if conditions in Afghanistan are not improved.

Stability in Afghanistan means jobs, economic opportunities, and a means of survival beyond heroin trafficking and extremism for the impoverished Afghan people. Working in the interests of Chinese society, not the profits of a few capitalists, Chinese banks are funding infrastructure projects in Central Asia. These banks are not obeying stockholders. They are obeying the Communist Party, …

The foreign policy goals of the Chinese government, under the leadership of Xi Jinping — who in the US press is widely decried as a “hardliner” and compared to Joseph Stalin — has been to stabilize the world by providing economic opportunity to imperiled regions. If people are not starving and desperate, the world will be a much safer place, not just for China, but for all countries.

Who gains from instability?

The international banksters and arms dealers, of course.

You can read the whole thing at:

but it gets back to depressing war stuff.

Let’s talk about the jingle, the rumble, and the roar of Chinese trains choo-choo-ing through Western Asia and all the way to Iran. (First, let’s hope that Iran produces a new genre of music to celebrate such rail travel. If Johnny Cash could do it, some Iranian oud-player ought to be able to do something similar…)

Capitalism’s worship of profits might manage to kill us all – or at least kill all the poor people. These trains rolling out of China to anyplace else seem like an alternative. Sure, Communism was bad, Chinese quality is legendarily bad, etc., but they can manage to make TRAINS. They have all the oil that they can buy from Russia, next door, to make those trains roll.

I mean, sure, Mao did all those mass executions, but what’s the alternative?

The obvious alternative is: that Victoria Nuland and her personal army of Neo-Nazis gets to run Western Asia, and arrange politicians to suit her needs:

And somehow, somewhere, a Rothschild-owned bank is making a profit on everything in the West. Quite a few conspiracy theorists claim that the Rothschilds own China as well, which seems highly unlikely to me. For the moment, I will be content to hope that a few countries – including Iran and China – are not entirely dominated by Western banksters.

I would like to think that there is a non-obvious alternative. I would like to think that there is a way to arrange matters so that every tribe is free to be the tribe it wants to be. I see no obvious actions that anyone can take to make that happen quickly. We can hope that trends like solar panels and decentralization might bring about post-scarcity sooner rather than later, but it will probably take many decades, and maybe scarcity will never leave.

Assume that China is “free” in some sense. Wolfie-boy still thinks it is doomed:

Rail freight volumes are an indicator of China’s goods-producing and goods-consuming economy, not just manufacturing, construction, agriculture, and the like, but also consumer goods. Thus they’re also an indication of consumer spending on goods. Alas, rail freight volume is collapsing: the first quarter this year puts volume for the whole year on track to revisit levels not seen since 2007.

While China’s economy was strong, rail freight volumes were soaring. For example, in 2010, when China was pump-priming its economy, rail freight volume jumped 10.8% from a year earlier. In 2011, it rose 6.9%. It had soared 44% from 2005 to 2011! But 2011 was the peak.

In 2012, volume in trillion ton-kilometers declined one notch and in 2013 stagnated. But in 2014, volume skidded 5.8%. And in 2015, volume plunged 10.5% to 3.4 billion tons, according to Caixin, citing figures from the National Railway Administration. It was the largest annual decline ever booked in China.

It was a year that the People’s Daily, the official paper of the Communist Party, described in this elegant manner:

Dragged by a housing slowdown, softening domestic demand, and unsteady exports, China’s economy expanded 6.9% year on year in 2015, the weakest reading in around a quarter of a century.

Which is precisely where things stop making sense: rail freight volume plunges 10.5% in 2015, and the economy still increases 6.9%? I mean, come on.

At the time, Caixin said that China’s central planners aimed to increase rail freight volumes to 4.2 billion tons by 2020. This would assume an average annual growth rate of 4.3%. So these declines are not part of the planned transition to a consumption-based economy. They’re totally against that plan or any other plan. They’re very inconvenient for the rosy scenario!

Then came the first quarter of 2016.

Rail freight volume plunged 9.4% year-over-year to 788 million tons, according to data from China Railway Corporation, cited today by the People’s Daily. At this rate, rail freight volume for 2016 will be down 20% from 2014, which had already been a down year! At this rate, volume in 2016 will end up where it had been in 2007!

Is China’s Economy in even Deeper Trouble than We Think?

So according to Wolf, there won’t be much jingle, rumble, or roar to listen to. There will be deathly silence and negative profits. Oil will stay below $50, so Russia won’t swoop in to save anybody.

Maybe. I am not counting China out yet. Even if they have a hard landing with lots of riots … it’s not like they lack riot cops. It’s not like the USA hasn’t advanced the art of pepper spray, and much of the riot gear worn by USA riot cops was made in China anyway. The deeper problem is that China might get all of the psychopathic bankster IDEAS that make the West so messed up, and those IDEAS might motivate the Chinese bankers to surpass the Western banksters.

Suppose China manages to get those trains running all the way to Iran, and it loses money. How much profit can it afford to lose? Building train tracks gets a lot of riot-prone men out of the cities and into the work camps where their rowdy fun can’t block traffic. If nothing else, gigantic rail expansion is like a Franklin Delano Roosevelt dream of Keynesian job creation, translated into Mandarin.

China has TOO MUCH steel on its stockpiles. They would actually be doing good business if they could score some diplomatic points by giving away steel to countries like Iran.

And here’s a joker in the deck: at some point, oil is going to get expensive again. Someone, somewhere will have miscalculated, and suddenly oil will be back above $50. If oil gets that pricey, suddenly Russia will be feeling frisky.

Even without much money in its public purse, Russia isn’t just sitting around:

Russian-made S-300 air defense systems would play an important role in maintaining Iran’s national security. At the same time, Moscow is interested in supporting Tehran on a number of issues, including the fight against Daesh in Syria, the settlement in Nagorno-Karabakh, and deterring Turkey.

Read more:

Maybe the new Johnny Cash will sound like the following:

Of course, many people will be unhappy with that, especially the Russian version of Ron Swanson, who doesn’t like being filmed while listening to music he doesn’t like.


Everybody’s a critic, am I right?

This entry was posted in political economy. Bookmark the permalink.


Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.