Friday, July 31, 2009

Economist: "China numbers are fake"... And Bank Failure Friday.

As faithful readers know, I have made several posts warning about the 'supposed' economic growth in China and have questioned the wisdon in pinning our hopes of economic recovery on China's growth.

Now noted economist Marc Faber, in his latest Gloom, Boom and Doom report, states that "China's economy is growing at 2%, not the 7.8% its government claims."

A growing number of investors turned bullish on China after its markets began to rise last March. But as we have noted here, China has been throwing massive amounts of stimulus money at it's economy.

As Faber notes, “if you throw money at the system, lots of things go up in value — but maybe they go up for the wrong reasons. What disturbs me today … is that the lows in March and late last year, sentiment was incredibly bearish about everything.”

Now, Faber observes, “there’s this incredibly bullish sentiment when insiders are actually selling and the technical picture of the market doesn’t look that great.”

China is in the midsts of a massive bubble buildup. Watch for a global impact when it bursts.

Bank Failure Friday

After seven failures last Friday in the United States, another five banks failed today brining the year's total to 69.


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