November 19, 2007 (LPAC)-- In a dramatic move, Chinese authorities have, in the last weeks, ordered the nation's banks to freeze all lending at the present levels, for the rest of the year. This news, and the way it was delivered, had the desired immediate effect on the markets. Half way around the world, the Wall Street Journal managed to get it on the front page of their print edition by press time. Although they spend a lot of newsprint fretting about what effect this will have on the markets, what Rupert Murdoch's free-marketing "Urinal" is most immediately concerned with is the decidedly non-market-oriented nature of their intervention.

According to coverage, authorities at the China Banking Regulatory Commission "quietly ordered" commercial banks to freeze lending. Although raising interest rates "would be more in keeping with [a] market-oriented approach to business," they say, China has already done this four times this year, with no durable effect. They do, however note that this was the most astute move they could have made. Without causing a "ripple effect" (market panic), or increasing the "upward pressure" (inflation) of the yuan, they have achieved, at least temporarily, a halt to the wildfire of hyperinflation now engulfing the planet.

This dirigist, or "state directed" control of the markets is exactly the reaction which the Urinal (and others within high financial circles) are terrified of eliciting from the victims of globalization. In the U.S., the fight continues for the Congress to assert some Constitutionally mandated authority over the issuance of credit, and the protection of the general welfare in the form of the Homeowner and Bank Protection Act.