Saturday, June 29, 2013

China's "Dr. Doom": The Chinese bubble is about to burst

Chinese investors are holding their collective breaths to see if the banking crisis predicted two years ago by renowned Chinese economist Li Zuojun will come to fruition in the next couple of months. Li's astounding accuracy in predicting China's economy has led to him earning the nickname "China's most successful doomsayer."

Though far from perfect, a lot of what he said here rings true. But the interesting insight is that he forecasts that the incoming regime will want to take its lumps early, in 2013, so as to minimize blame ("it was the old crew's fault") and maximize praise for subsequent recovery...

He notes three other drivers (aside from this political one) including external flows and credit expansion, and fears social instability should the status quo be maintained...

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