Thursday, March 18, 2010

China in Midst of ‘Greatest Bubble in History’

China is poised to overtake Japan as the world’s second- largest economy this year, according to the International Monetary Fund, and Nomura Holdings Inc. forecasts it will contribute more than a third of global growth. The nation has surpassed the U.S. as the world’s largest auto market and Germany as the No. 1 exporter.

Harvard’s Rogoff said Feb. 23 that a debt-fueled bubble in China may trigger a regional recession within a decade, while Chanos, founder of New York-based Kynikos Associates Ltd., predicted a slump after excessive property investments.

SHOOT: If China pops, we're screwed.
clipped from

March 17 (Bloomberg) -- China is in the midst of “the
greatest bubble in history,” said James Rickards, former
general counsel of hedge fund Long-Term Capital Management LP.

The Chinese central bank’s balance sheet resembles that of
a hedge fund buying dollars and short-selling the yuan, said
Rickards, now the senior managing director for market
intelligence at McLean, Virginia-based consulting firm Omnis Inc.

“As I see it, it is the greatest bubble in history with
the most massive misallocation of wealth,” Rickards said at the
Asset Allocation Summit Asia 2010 organized by Terrapinn Pte in
Hong Kong yesterday. China “is a bubble waiting to burst.”

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