Chinese Bubble in the Offing?

That’s the speculation in a recent posting by Bob Davis of the Wall Street Journal:

One of the most striking facts unearthed by the International Monetary Fund in its recent review of China’s economy was how much of a risk Beijing was taking by not aggressively deflating its credit bubble.china-bubble_170x170

IMF economists looked at 43 countries over 50 years and found that just four had seen credit grow as rapidly as China had in the past five years – and all four faced banking crises within three years of such supercharged growth.

The Chinese response?  “Ain’t gonna happen.”  We’ll see.  The full post is here.

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