Finvidea.com sees considerable risk in China.
The China bubble, when will it burst? A disturbing article on the Dow Jones wire this morning pints out that China’s surging economic bubble is about to burst. The government in Beijing seems worried enough to curtail bank lending and is putting on the breaks in general.
Two questions arise: 1. Are the government’s efforts enough to prevent the coming disaster and 2. What will make the bubble burst.
The both questions are impossible to answer. Beijing is notoriously secretive about its statistics and the numbers being released are suspect. The cause for the bubble to burst is just as hard to fathom and for the same reason.
All we can do is accept the fact that China is a huge sovereign risk factor. The currency is an inconvertible worthless inland unit anyway. Its valuation cannot be used as a gauge. So, all we can do is keep watching China and wait. Moreover, investing in any Chinese venture at this point is not a good idea.
Plus, if there is a disaster it will have an impact globally.
The global landscape is not pretty. Europe looks shaky and Asia is a huge risk. That means, again that the US and its dollar are the only places to put your money. The dollar will keep going higher.
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