Who Will Bail The Bailers?

Investor Marc Faber, publisher of the cheerily-titled Gloom, Boom and Doom, predicts a crash of the Chinese economy within the next nine to twelve months. It is estimated that upwards of 60 percent of the Chinese GDP growth is driven by construction. Although the government has implemented various fix-a-flat measures to try to contain housing prices, it has stopped short of raising interest rates, saying that it remains committed to expansionary policies. Sound familiar?

It's like Groundhog Day...

Where The Next Bubble Is Likely To Pop

I caught this video link over at NRO; it's a five minute news report examining one way China may be able to maintain its 'consistent' GDP growth numbers. The story focuses on the Chinese city of Ordos - or is that "New Ordos" - a brand new city built from scratch just several miles away from the existing city. Here's the interesting part - it sits completely empty:



Watch for the money quote from Patrick Chovanec of Tsinghua University at about 2:5o: "Nobody's ever really lost money in real estate in China."

Uh-oh.