The entire financial meltdown which started in 2008 was due to excess liquidity. it was a credit crisis. Credit is cyclical and periods of excess credit will be followed by meltdowns. Govt will again increase credit to solve the problem and once again we will have excess credit and then a meltdown.
China is having a strong rally currently. The chinese banks have pumped so much liquidity into the system and are lending at levels far higher than 2007-2008. One shudders to imagine the kind of crash the Chinese stock market is setting itself up
Friday, July 17, 2009
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