China’s Achilles heel

February 4, 2010 at 11:11 am Leave a comment

Remember the article by thomas friedman rebutting jim chanos on china?

Well, Michael Pettis has written an article to dismiss Friedman’s argument about never short China due to its massive reserves.

Pettis draws on the history of US in 1920s and Japan in 1980s, when they too have massive reserves, but still succumbed to economic depression. He does not imply that China will follow the same path but cautions that massive reserves can’t protect China from domestic bubbles and overcapacity.

Here’s the link to that article
http://www.roubini.com/emergingmarkets-monitor/258367/never_short_a_country_with__2trillion_in_reserves_

Old-time generals tends to fight the last war. Remember Maginot line, well the 2 trillion plus reserves may not withstand a domestic blitzkrieg.

Entry filed under: Watch your step. Tags: .

Singapore ‘s Richest Tycoon dies Cassandra on China Real Estate Bubble

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Recent Posts

February 2010
M T W T F S S
« Jan   Mar »
1234567
891011121314
15161718192021
22232425262728

Archives

Blog Stats

  • 37,449 hits

%d bloggers like this: