china is not a bubble?

"China can blow bubbles faster and bigger than just about any other country, but the Extraordinary Salt Mania of March 2011 takes the cake for speed, size and bizarreness. The brief, dazed run on salt by investors following the March 11 tsunami demonstrates China?s susceptibility to speculative bubbles and the potential to pass on the effects to international markets.

Shortly after radiation was reported to be leaking from Japan?s Fukushima Daiichi nuclear power plant in mid-March, rumors began to spread that China?s sea salt could be contaminated by radiation and that iodized salt could prevent radiation sickness. The apparent demand shock from the rumored salt cure and a perceived supply shock from the polluted seawater caused prices to spike upward of 85% in a matter of days. State media reported that a Mr. Guo bought 6.5 tons of salt in Wuhan on March 17, only to see prices collapse three days later after repeated warnings from government officials that there was no salt shortage and that consuming iodized salt could not assuage radiation sickness, of which there was no threat."

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"A speculator living in a 20-square-meter apartment was able to lay out US$4,100 for 260 bags of salt that filled half of his apartment. Rumors spread quickly through social networks of rising salt prices, while repeated warnings about the safety of China?s salt supply and the dangers of excessive salt consumption went unheeded."

There are some interesting points raised in this article on Chinese bubble blowing which was written by Roubini Golobal Economics. Heaven help us if their property/construction bubble does burst (BHP and RIO shareholder, among others, take note).

http://www.investmentpostcards.com/2011/04/11/rge-great-speculations-%e2%80%93-why-china-is-so-bubble-friendly/print/

loki