Wikinvest Wire

Marc Faber on the slowing Chinese economy

Thursday, February 11, 2010

Gloom, Boom, and Doomer Marc Faber talked with Bernard Lo of Bloomberg earlier today about the outlook for the Chinese economy (it will slow, maybe a lot) and how commodity prices might be affected (they will go down, maybe a lot).

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He currently recommends agricultural commodities such as corn, wheat, and soybeans since they haven't rallied in quite some time. From a related report:
China’s economy will slow down “meaningfully” and may even be at risk of a “crash” because of the nation’s excess capacity and as loan growth slows...
In other news from China today, the government reported that lending surged by over $200 billion January and home prices rose 1.3 percent, now up 9.5 percent from a year ago, all indicating that efforts to rein in speculative lending and a runaway housing bubble are, so far, seeing only limited success.

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Anonymous said...

Interesting. Too much debt in developed markets will reduce their long run GDP. Low debt in emerging markets will improve long run GDP.

Marc likes the Chinese plan to increase Chinese real consumer purchasing power (non leveraged). A much better plan than the West's ever more debt approach, which has led to disaster. The 800% debt/unfunded liabilities to GDP for the US is astonishing.

The printing press has reduced the future standard of living in the West for a long time. Stealing goods from thrifty consumers, and lending the loot to spendthrifts was a stupid plan. The CB distorted the economy beyond all recognition with this strategy.

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