It looks like you're using an Ad Blocker.
Please white-list or disable AboveTopSecret.com in your ad-blocking tool.
Thank you.
Some features of ATS will be disabled while you continue to use an ad-blocker.
Originally posted by surrealist
While much of the world appears to be either celebrating some kind of economic recovery, or looking to Europe as the possible next financial crisis to blow, there is this ominous housing bubble simmering away in China - potentially much more catastrophic than some of the other financial and economic issues covered by main stream media.
Now apartments on Phoenix Island which reached the dizzying heights of 150,000 yuan ($23,356) per square metre in 2010 are on offer for just 70,000 yuan ($10,899), said Sun Zhe, a local estate agent. "I just got a call from a businessman desperate to sell," Sun told AFP, brandishing his mobile phone as he whizzed over a bridge to the futuristic development on a electric golf cart. "Whether it's toys or clothes, the export market is bad... property owners need capital quickly, and want to sell their apartments right away," he said. "They are really feeling the effect of the financial crisis." Read more: www.news.com.au...
Originally posted by pheonix358
China has a largely controlled economic system with tight controls when needed.
Pedit on 4/3/2013 by pheonix358 because: (no reason given)
Investors are skeptical of the government’s economic management and question the reliability of statistics. The country’s central bank says borrowers have stopped paying back 1 out of every 10 loans in the banking system, but Fitch Ratings said the percentage of bad loans might be much higher. If the 1997 crisis was often blamed on “crony capitalism,”
Vietnam’s problems could be described as crony capitalism with a communist twist. State-owned companies are stacked with friends and allies of the Communist Party hierarchy. “The state is being manipulated by people within the state to make money,” said Jonathan Pincus, the dean of the Fulbright Economics Teaching Program in Vietnam. “Getting the Communist Party out of the management of these companies, that’s what is required,” he said. “I don’t see that on the table.”
Like property bubbles in other parts of the world, investors in Vietnam took advantage of free-flowing credit to construct buildings with the hopes of flipping them for a profit. One key difference is that some of the largest property speculators in Vietnam are state-owned corporations with top connections in the Communist Party and access to cheap money. Those companies are now grappling with unsustainable debt levels, or in the case of Vinashin and Vinalines, two large government conglomerates, flirting with insolvency.
Originally posted by Rockpuck
reply to post by surrealist
It's not a "real" bubble since to be a bubble means the over inflation of assets on a banks balance sheet. In Western Economies the bubble "burst" due to a credit collapse from defaulting loans. In China the main holders of these liabilities are nationally controlled banks operated by the Central Bank of China. China has had absolutely no problem absorbing the debts freely, since they like their currency devalued anyways. In the USA it caused all kinds of havoc, and the EU's central bank structure rendered it defenseless. China, on the other hand, is quite literally designed for this kind of thing..
Originally posted by ConspiracyNutjob
Originally posted by Rockpuck
reply to post by surrealist
It's not a "real" bubble since to be a bubble means the over inflation of assets on a banks balance sheet. In Western Economies the bubble "burst" due to a credit collapse from defaulting loans. In China the main holders of these liabilities are nationally controlled banks operated by the Central Bank of China. China has had absolutely no problem absorbing the debts freely, since they like their currency devalued anyways. In the USA it caused all kinds of havoc, and the EU's central bank structure rendered it defenseless. China, on the other hand, is quite literally designed for this kind of thing..
Central planning always fails. This will be no different.
If it does succeed, then it will buck a trend that has been consistent through all of history.
Originally posted by pheonix358
Originally posted by ConspiracyNutjob
Originally posted by Rockpuck
reply to post by surrealist
It's not a "real" bubble since to be a bubble means the over inflation of assets on a banks balance sheet. In Western Economies the bubble "burst" due to a credit collapse from defaulting loans. In China the main holders of these liabilities are nationally controlled banks operated by the Central Bank of China. China has had absolutely no problem absorbing the debts freely, since they like their currency devalued anyways. In the USA it caused all kinds of havoc, and the EU's central bank structure rendered it defenseless. China, on the other hand, is quite literally designed for this kind of thing..
Central planning always fails. This will be no different.
If it does succeed, then it will buck a trend that has been consistent through all of history.
Can you show that "Central planning always fails."
I am thinking of the Chinese and thousands of years of history under first the Emperors and then the current Govt. How about the Roman Empire!
The only reason that we are in a mess now is the shift from Govt control to "lets sell everything to private enterprise" crap that was foisted on us in the 80s and 90s. The downward spiral we are now in is caused by the dearth of controls and the current spiral started when Reagan lifted controls on the Banking sectors.
P
Originally posted by pheonix358
reply to post by ConspiracyNutjob
Sir, you see only central planning as the problem. The problem is not central planning, it is greed! Greed for wealth and greed for power are the reasons that all empires fall. It is the reason that the US will fall.
Central planning has nothing to do with it. It just happens to exist at the time that greed and power destroy society.
Empires always collapse. The stars are always in the sky. Do the stars cause the empires to crumble, no they don't. Think critically.
P