[lbo-talk] Leninist/Maoist Finance?

[boddi satva]

I just finished a thoroughly capitialist book that was nonetheless
very interesting. Although not a big part of the author's argument, he
did suggest that Centralist economies finance themselves largely
through limiting the production, consumption and prices of consumer
goods and then using the excess saved cash and/or simply printing more
money, safe in the assumption that price controls and few consumer
goods to buy will keep inflation from setting in - if artificially.

What do folks here think of this proposition?

Also, does it make sense in terms of China? While financiers are
yelling that the yuan is undervalued as a matter of foreign exchange,
isn't there evidence that the Chinese have been printing and lending a
lot of money internally? Can tight state control of the money markets
keep iinflationary behavior internally from affecting the value of the
currency?

boddi