Sunday, April 8, 2012

Ghost Towns of China

China has pumped a lot of stimulus into its infrastructure and housing markets. They make the US and European Central Bank look like amateurs.


So, China's government loaned a bunch of money to developers and investors to build cities. And build they did. Unfortunately, the housing units are way too expensive for the average person (i.e. they will never, ever, be able to afford them) leading to relatively few purchases, and in some cases, no purchases. This has been going on for the past few years.

At least China's willingness to abuse its people by suppressing wages, civil liberties (don't worry, the US government will put China to shame with the NSA's Utah Data Center), manipulating its currency (the US also puts the world to shame on this front), completely ignoring the collateral environmental damage, inviting Westerners to take advantage of the low-cost of manufacturing (at the expense of its people), subsidizing industries (e.g. solar and rare earth minerals) to bankrupt cross-border competitors, and its sole focus on GDP growth has catapulted into the world's second largest economy.

Can you guess how it will end? Hint: Not well.




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