Sunday, November 21, 2010
China can't Contain it's Underground Economy
Although China's underground economy is only 10% of it's economy. It's the size of the entire economy of Malaysia. China just as every country with a fiat money system inflated it's money supply during the "recession" and now it is taking steps to slow the inflation. By raising isterest rates, creating prices caps and subsiding agriculture. With all this going on the Black Market seems unaffected, it is expected that their demand is more inelastic. Tax hikes and government regulation won't stop China's Black Market.