the real point is the credit growth, folks think the Chinese...

the real point is the credit growth, folks think the Chinese central monetary planners are somehow better than the Americans (or anyone of the others for that matter), this is part of the great market myth making that presently in vogue .

Lending in China last year doubled , let me repeat LENDING IN CHINA DOUBLED LAST YEAR. Money growth was 36% , folks rally against the fed , but I question whether this is part of the current market mythology. Here we have an economy growing through fiat expansion thats many times greater than the US (or anyone else) yet we embrace this economy as a miracle even though its central planning and manipulation is many times worse than the economies we are focussed on. We deride one and laud the other, does this suggest there is something wrong with the markets perceptions over and above the underlying reality?

What concerns me is this is one of the greatest danger signs in historical perspective that an economy can give. Credit growth of these proprotions have parrellels in
early 1920s Germany and Russia . Its not a popular observation in many respects, the media pushes us toward the Chinese dream , yet as they run to embrace this dream they sow within their economy massive imbalances. Historically when an economy starts to stock piling at this level it lead leads to massive over supply and commodity crashes further down the track.

http://www.ciobinternational.org/news/view/1708

China property bubble called Dubai times 100

Easy access to credit is blamed for the rampant construction activity. Empty buildings are sprouting across China as companies with access to some of the $1.4 trillion in new loans last year build skyscrapers. Former Morgan Stanley chief Asia economist Andy Xie and hedge fund manager James Chanos say the countrys property market is in a bubble.

Theres a monumental property bubble and fixed-asset investment bubble that China has underway right now, Chanos, founder of New York-based Kynikos Associates Ltd., said in a Jan. 25 Bloomberg Television interview. And deflating that gently will be difficult at best. Chanos predicted that China could be Dubai times 100 or 1,000.

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The key to understanding the future is looking past the myths and media hype, its logical that the Chinese cant go on stock piling forever, creating massive stock piles of stuff you dont need to use yet is no safer investment than US treasuries or any other investment, the world has proved that growing GDP through money printing and credit grwoth is dangerous, deflation is emerging everywhere, Japan may go near default this year, we have discussed the Euro dangers thoroughly already, then we have the US.........

All of this plays at Australias economic stability, we tell ourselves now that economic collapse wont visit us, yet our debt to income ratio is worse than the US at its worse, our housing market balance precariously on a mountain of debt thats beyond any RE market in the world......

Yet folks want to tell us its only the Americans that are in trouble...........