China going to bust?
Citigroup (NYSE:C) analyst Willem Buiter has joined a chorus of others who have predicted China is set for a bust, and Buiter claims it could last for a period of three years, and doesn't believe it can be avoided, even if China tightens its monetary policies, which it has said it was going to do, but hasn't yet.
Like others, Buiter largely bases his assertion on the residential and commercial real estate markets in China, which could end up creating a domino effect.
The one problem I have with Buiter is the idea is also based on whether or not the Chinese government is doing anything.
“What is policy in China doing about the threat of overheating in the financial and real economy?” Buiter said. “The short answer is: not much, and not enough to prevent the creation of what could become a major asset boom, bubble and bust.”
Obviously this is a Keynesian thought, and economists like this think the world is falling if the government isn't interfering.
China for its part says they've seen nothing to indicate their economy is in a state of recovery. I think the West could take a lesson from that observation as well. Everywhere you read the mainstream media makes it sound like we're really in a big recovery, when data shows we're far form that being a reality.
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