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China Local Authority Debt "Out of Control"


Parsad
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The bubble is starting to burst at the seams.  Cheers!

 

http://www.cnbc.com/id/100646465

 

Are you looking for shorting Chinese stocks? Or do you just wait for the crash and buy bargains?

I think if China crashes, the US equity index might drop a bit too, and creates a chance to buy bargains in the US.

However, I think the bubble in China could be different than the housing bubble in the US. The reason is because the borrowers are local governments, and Chinese central government likes to intervene a lot.

For the us housing bubble, the government did not bailout individual borrowers who couldn't pay the debt, so they had to get foreclosed.

The Chinese government will try everything possible to bailout the local governments, perhaps by printing as much as possible. In the end, there will be severe inflation for sure.

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