Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (3681)	12/20/2003 4:24:38 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

Noland on China's "deflationary" impact: The consensus remains generally fixated on the “China exporting deflation” story. But the truth of the matter is that China is providing us with an extraordinary example of Credit inflation and boom dynamics. An out of control investment boom is now challenged by expanding bottlenecks and shortages. In turn, runaway Credit excess has nurtured a real estate boom, general asset inflation, and rampant speculation. China fever has afflicted the world. What had appeared a healthy, stable and easily manageable boom is being transformed to something more capricious and unwieldy. And with cautious authorities understandably hesitant to “slam on the brakes” (a boom of this ferocity, breadth and duration will not succumb to inhibited monetary management), we will now have the opportunity to follow and analyze an economy with increasingly problematic Inflationary Manifestations. At some point, perhaps Chinese authorities will come to recognize that the over-liquefied global financial system and faltering dollar compound their unfolding dilemma. The Bank of Japan can buy mountains of dollars – adding liquidity to their domestic financial system – seemingly without an inflationary care in the world. The same is certainly not true for the Chinese with myriad inflationary biases throughout their economy and markets.