Economy Watch: The economy of China is careening toward disaster and they have no one but themselves to blame. The mercantilist Chinese policy of building dollar reserves is fuelling not only a preposterous speculative bubble within China, but also in the commodity markets worldwide, and formely in the US housing market (abetted by Wall Street who were able to multiply the incoming reserves via structured financial products and high leverage). Notice I blame not the pegged exchange rate, but the act of reserve building. Anyway, now they are imposing price controls to freeze the rising price of oil THAT THEY ARE CAUSING with their expansionist monetary practices.
The longer the charade goes on, the harder China’s markets and economy are going to fall. I don’t know when the end comes, but it will come.