The Observation Deck

Well soon enough.

[url]
http://finance.yahoo.com/retirement/art ... e-planning[/url]


Contrarian Investor Sees Economic Crash in China

by David Barboza
James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.

Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China's hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like "Dubai times 1,000 -- or worse," he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.



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Seems like being the tallest munchkin in Oz with the way our economy is going.

as a semi-command economy they can insulate domestic real-estate crashes from other economic activities. they're still holding about half a trillion dollars in current account balance: enough to keep timber, ore, oil, shark fin, and old industrial equipment flowing into china.

How is that good news? If China crashes, they're gonna come looking for their $800 billion we owe them.

Brian Pedaci wrote:How is that good news? If China crashes, they're gonna come looking for their $800 billion we owe them.

if they finance our debt with bonds, they are stuck waiting for the terms of those bonds.

during most of the cold war, most of the debt was financed by Americans: government bonds were a fairly good investment. and their were sometimes tax-incentives.

Japan and Taiwan and China buy the ultra-low interest Neoconservative-era debt because their national interests are export-based industries. and Industry in general.

America's primary national interest is flipping stocks and mortgage backed securities.