Well, bust follows boom...
Ritholtz. a "financial blogger", draws attention to an article by Abelson which is not a favorable review of PRC's situation.
It also contains a very good retrospective on the US recession.
“Such debacles usually start, Edward has found, with a compelling growth story. Another feature is a blind faith in the competence of the authorities. The ignominious list includes: excessive capital investment; a surge in corruption; easy money; fixed- currency regimes; rampant credit growth; moral hazard; precarious financial structures; and rapidly rising property prices powered by dodgy loans. Of these, rapid credit growth is the most important leading indicator of financial instability, followed by an asset price bubble.
That red-highlighted phrase is very significant, because it identifies the 'third leg' of the boom/bust cycle. Fiscalists (like Keynes) don't mention credit growth much, if at all. Monetarists (like Friedman) reference it, but only indirectly--monetary growth COULD result from credit growth, but more often is mentioned as a Fed policy item.
But as we've seen, (and Ticker repeats endlessly), it's "rapid credit growth" which was the plutonium in our last bomb.
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