Contrarian Investor Sees Economic Crash in China

" by David Barboza
Friday, January 8, 2010

provided by
The New York Times

James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.

Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China’s hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 – or worse,” he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent."

Real interesting article.
Back in the 1960’s China was telling the world of wonderful harvests while in reality they were experiencing famine. Cooking reality for foreign consumption seems nothing new for China.

Well, I don’t know if they’ll crash soon. But a slowdown will be inevitable at some point since they don’t have enough kids, so it’s certainly not a good long-term investment. Another society that’s refusing to reproduce. And they’re getting old before they get rich, which is pretty much the kiss of death, economically speaking.

There’s a reason why the dollar hasn’t crashed despite our economic profligacy: we may be living beyond our means but we’ve got kids. I’ve been looking around at places to invest in and, as bad as our economy and deficit are, there aren’t really many “better buys” out there. America seems to still be the best place to park cash. But we need to get our act together or we’ll lose that status.

You mean…China…might…:eek: lie?

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