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China's readjustment, the Euroglut, and the impact on the rest of the markets
I find Pettis brilliant, and even though he's just focused on China, that's let him be pretty right about many things, such as forecasting the plunge in the price of iron. I think his pessimistic take is worth listening to, especially for someone fundamentally bullish like myself. I'd love to hear why he's wrong!
The thing won't let me read past p. 1. Gotta register, or it all turns blurry. Anyhow, it's THIRTEEN pages. Someone might do the rest of us a favor by offering a short version. Anyone? Thanks, ahead of time.
Sorry about that. Short version: China is moving toward much slower growth, less investment, and more consumer spending, which means commodity prices (iron in particular) are going to fall further. Europe, led by Germany, is trying to export its way into growth, but the Eurozone's current account surplus is already bigger than China's ever was, so it's not only not working, it's unsustainable.
Either Germany starts spending big on infrastructure, or the Eurozone's savings glut gets recycled into developing countries that will spend it on infrastructure (instead of going into T bonds as it currently is), or commodity prices will fall further, the global economy except maybe the US will slip into recession, and Marine Le Pen will be France's next president.
They must be short pages, it's not that long, but yeah, too long for most of us. He's a finance professor at a Chinese university.
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Either Germany starts spending big on infrastructure, or the Eurozone's savings glut gets recycled into developing countries that will spend it on infrastructure (instead of going into T bonds as it currently is), or commodity prices will fall further, the global economy except maybe the US will slip into recession, and Marine Le Pen will be France's next president.
They must be short pages, it's not that long, but yeah, too long for most of us. He's a finance professor at a Chinese university.