“China’s threat to sell its US Treasuries – if actually carried out – will be triggered by the US Congress. This fall, the US Congress will vote on a bill that would impose a 20% across-the-board tariff on all Chinese goods imported into the US. The supporters of the bill describe its passage as “veto-proof” – that they now possess enough votes to override a presidential veto.

This possibility calls again into question the very efficacy of democracy, to wit., the belief that the collective will of the people is preferable to the capricious stupidity of a king or queen or any other selected or self-appointed tyrant, or indeed, virtually any government official…..”

Ah yes. Precisely the theme of “Mobs.”

And one no one likes to hear. Masses of ignorant, ill-informed, or passion-driven people are not exactly the ones we should be listening to. Not, of course, that the majority ever wanted to get into this war in the first place. They didn’t. Our elected oligarchs did that. But they can always count on enough mass hysteria to let them get away with it.

Of course, criticizing “the people” is out of the question these days. That would make you, what, an elitist? Well — I am an elitist. When I study something I don’t go to someone just as ignorant as me, I go to some one who knows better. When I want financial advice, I go to people who know how to make money and have more of it than me. Everything revolves around that sort of hierarchy – and acceptance of it. So, this constant talk of egalitarianism moves me about as much as “self-esteem” babble unaccompanied by any effort to improve. People who make better decisions, contribute more, and work harder ought to do better. Nothing wrong with that. The problem is when rewards don’t match the value added and are a result of the system being rigged.

So, when the demagogues jump into protectionism (just as they did with Smoot-Hawley) what is likely to happen?

“China is longer dependent on America to buy its goods. The Eurozone now shares the distinction of being China’s largest market. Additionally, when and if the US Congress votes to impose 20% tariffs on Chinese goods, the damage to China’s economy will be significant.

China will retaliate; and, dumping $1.33 trillion of US Treasuries on the open market will be an all too easy and accessible option. It would destroy the US dollar and deal the US economy a body blow from which it would take years to recover….”

and more fun stuff here.

Frankly, I would rather live under a despot who left me alone most of the time than under an endlessly meddling democracy.