Originally Posted by
Laguna
Recently, spent time looking into the asset bubble in China. This is a bubble, huge one, the questions are to what extent the bubble will grow and when it will burst and the consequences of that, particularly to Sg.
In US, it is only 1,000,000 properties foreclosed yearly since the subprime. In China, there are 64,000,000 vacant properties.
I read the asset bubble in Japan, Spain, which started before US subprime, Dubai, PIIGS, and then US. All have different causes but not that different in substance. Over the East, the property bull in Jakatar, HK, China, Sg, India. This shows a great inbalance of fund flow.
For China, cooling measures have been introduced on the LTV, bank reserves, number of property be purchased per household / foreigners, etc etc. Definitely, it needs time to cool, couple with the big supply and number of vacant properties, if anything happens, the consequences just simply beyond what I can think.
For US, they are printing themselves out from debts and recession. The strategy will be copied by the EU countries if needed. China will find eventually the US debts they hold are worthless.
US is the biggest debtor, with the high unemployment rate with some states at 15%, the recovery still someway to go.
The issues are very interesting and complicated. As Sg is a very open economy, if China asset bubble burst, what will be the likely impact on Sg???
There are many experts in this forum, view sharing is appreciated.