Thursday, October 6, 2011

Biden Indicates Concern about Chinese Economy

Vice President Joe Biden was interviewed today at the Third Annual Washington Ideas Forum. During the interview he raised concern about the difficulties in world economies.

He mentioned problems in the eurozone, but then, seemingly out of the blue, brought up China. According to Biden, there are, get this, 30 to 50 million vacant apartments in China.

I have been warning about China for some time, especially in the EPJ Daily Alert, but this is the first time I have heard the 30 to 50 million number thrown out. If Biden's number is accurate, and presumably he would be getting good intelligence on this, China is in a far greater trouble than even what I have been expecting, and I have been expecting a major collapse of the Chinese stock market.

It is beginning to appear that in addition to the problems created by China's money printing, which would create a boom-bust cycle of its own, much of the created money fell into the hands of local government bureaucrats, who built up their locales without any consideration of the demand for such construction. China appears to be a major diaster in the very early stages.

The vice-president also mentioned a firewall with regard to the eurozone, but didn't go into any details. At the forum yesterday, I heard from some people that what will likely occur in the EZ is a managed default of Greece, but with a firewall built around banks and other countries, where all liabilities of major European banks will be 100% guaranteed by some European entity. Biden's mention of a firewall, seems to dovetail with the indications that I have been getting on the coming EZ bailout. This, of course, suggests major inflation is possible in the EZ, as the banks and non-Greek governmnets are propped up.


  1. Biden is a moron. I don't doubt China's got too many apartments, but its Biden...He likely made up the number.

  2. I wouldn't be surprised if Biden is right about the number of vacant flats. Chinese local governments only work to increase the GDP since that will get local politicians promoted and they need to follow the central planners in Beijing. The easiest way to do this is to build things. Houses, bridges, stadiums, train stations, airports and what have you. There is no demand for all this and certainly not high enough salaries among the local population to afford it. But hey, the GDP goes up and that's what it is all about.