Thursday, July 28, 2011

China's Economic Miracle May Be About to Come Off the Rails

Jeremy Warner in The Telegraph notes:
Largely invisible on a radar screen dominated by concerns over the US and eurozone debt crises, the Chinese economic miracle, one of the few apparent bright spots that remains in a world beset by trouble, has in recent weeks also been showing unnerving signs of strain. Indeed, it may even be about to come off the rails entirely – quite literally.
Thanks to the link from Lew Rockwell, who also points out that the developing crisis in China is no secret to those who read the EPJ Daily Alert. Lew writes about the China crisis, "as any reader of your daily email has long known."


  1. I NEED MORE INFO BOB!! I DON'T READ YOUR EPJ Daily Alert!! i dnt have the funds. :(

  2. Cut subsidizing our standard of living and give yourself a real stimulus.

  3. And in other news...The world will end tomorrow.

    What does he even mean by "unnerving signs of strain"? Just another freaky word merchant.

  4. Anon@1126PM-

    Google "china ghost cities" and watch some of the YouTube videos, or read some of the articles. Dozens of cities, with housing for millions of residents, that are virtually abandoned.

    China has paid lip service to capitalism for a decade or two, but at heart it is still fundamentally a command/control communist country with MASSIVE amounts of uselss malinvestment in things that are worth 1/50th the money that went into the project. China needs to liquidate trillions in bad debt/infrastructure/etc. When China's bubble pops, it will be like an atom bomb set off in the markets, and it will take much of the world down with it (providing Japan/EU/USA don't collapse first).

    The US, EU, China and Japan are like mountain climbers, tethered together, scaling an impossible peak, and when one slips and falls, the rest will quickly follow.


    Google Simon Black/Sovereign Man and see his "boots on the ground" assessment of China. Scary stuff.

  5. Anonymous (9:33 PM):

    Just keep your eyes on the Shanghai Stock Exchange Composite Index - you'll know when the bottom falls out. I guess if the index falls below 2668-2600, we could see a more serious collapse.

    I've been shorting the index ever since April of this year. It looks very weak to me.