Thursday, November 17, 2011

The real-estate bubble in China is so evident

Marc Faber : The fast-growing economy of China has pushed up its inflationary pressures, with the bubble in the real-estate sector on the brink of bursting,

“Don’t believe China’s consumer price index stands only at 5 percent,” . “The truth is somewhere between 12 percent and 15 percent ... The real-estate bubble is so evident that Chinese property shares are very weak as the volume of real-estate transactions goes down and prices fall.” - in www.taipeitimes.com

central banks cannot control where the funds flow

Marc Faber : While central banks can inject fresh funds into the markets, they cannot control where the funds flow,

money printing has encouraged speculation on commodities whose prices have gone up faster than real demand in recent years. “Some people will benefit from money printing that deflates the purchasing power of currency ... but the middle and lower--income classes are being hurt,” - in www.taipeitimes.com

Printing money would forestall the crisis rather than solve it

“A third wave of quantitative easing by the US Federal Reserve is just a matter of time,” Printing money is the way global governments will evade debt crises, such as the one that is gripping Europe,

That would forestall the crisis rather than solve it, keeping prices elevated for assets like stocks, real estate in some areas and precious metal, Dr. Marc Faber said yesterday in Taipei.Loose monetary policies, including low interest rates, intended as a short-term fix, can have unintended consequences later, he added - in www.taipeitimes.com

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