I have often written in this blog and elsewhere about the three policy choices Beijing faces as it tries to manage through the adjustment process. My argument is that subject to two very plausible assumptions, every economic policy Beijing implements ultimately can be abstracted to one choice among three options. These two assumptions are: China […]
Read More…Category: Credit expansion
Does it matter if China cleans up its banks?
I’ve always thought that Shirley Yam of the South China Morning Post has a great nose for financial risk, and this shows in an article she published last week on mainland real estate. For anyone knowledgeable about the history of financial bubbles and crises, much of the following story will seem extremely familiar. The point […]
Read More…How Much Investment is Optimal
A few years ago I wrote an essay on my blog that received a lot of attention and in which I tried to explain what the underlying assumption was for analysts who considered that China’s low level of investment relative to that of, troche say, help the US proved that China could not possibly have […]
Read More…China’s rebalancing timetable
We often read in the press rather alarming stories about the rise of an ugly and belligerent nationalism in China, buy cialis but while these stories are certainly very real, sovaldi after the November 13 bombings in Paris I was struck by a very different kind of Chinese behavior. A lot of young people that […]
Read More…Thin Air’s money isn’t created out of thin air
A recurring conversation I have with clients concerns the ability of banks to create credit, buy and of governments to monetize debt, pilule and whether this ability is the solution to or the cause of financial instability and economic crisis. Monetarists and structuralists (to use Michael Hudson’s names for the two sides, illness whose centuries-long […]
Read More…What multiple should we give China’s GDP growth?
Last week Derek Scissors, a think tank analysts at the American Enterprise Institute, published an article in which he referred to an October, 2014, study by Credit Suisse that attempts to measure total household wealth by region and by country. Scissors argues that in the interminable debate about whether or not China will overtake the […]
Read More…Can monetary policy turn Argentina into Japan?
Monetary policy is as much about politics as it is economics. It affects the ways in which wealth is created, allocated, and retained and it determines the balance of power between providers of capital and users of capital. In January one of my readers kindly passed on to me a link to an interesting report […]
Read More…How to link Australian iron with Marine le Pen
After last week’s tumultuous markets one of my clients sent me an email saying “I am so relieved your constant talk about worsening imbalances kept us from getting too complacent. Things really are as bad as you keep saying.” I am not sure that what happened last week is proof of anything I’ve been saying, […]
Read More…“…not with a bang but a whimper”
Doug, Pancoast, an American entrepreneur living in Shanghai, asked to interview me for his blog, and I agreed to do so. I think it was meant to be a brief interview, but I began to respond on a Saturday evening, while waiting for the performance at my club to begin (my office is at my […]
Read More…Bad debt cannot simply be “socialized”
Once again I am going to discuss debt, and my discussion will be mainly conceptual. I suspect that many of my regular readers might wonder why I keep returning to this subject – and, often enough, keep saying the same things. The reason is because while debt plays a key role in understanding the recent […]
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