China’s credit bubble on borrowed time as inflation bites

Monday, December 6, 2010
By Paul Martin

The Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011. This is a new twist.

By Ambrose Evans-Pritchard
Telegraph.co.uk

It warns that the Communist Party will have to puncture the credit bubble before inflation reaches levels that threaten social stability. This in turn may open a can of worms.
“Many see China’s monetary tightening as a pre-emptive tap on the brakes, a warning shot across the proverbial economic bows. We see it as a potentially more malevolent reactive day of reckoning,” said Tim Ash, the bank’s emerging markets chief.

The Rest…HERE

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