Chinese money supply and loan growth - at over 30% - is out of control.
Today, 28% of the world’s savings are in China. There are now two Federal Reserves: the second is the People’s Bank of China (PBOC). Together these three statements are bad news for investors: a major tightening policy in China at a time when emerging markets equities and debt enjoy a price to book and bond premium that is at record levels. One could surmise it is best to avoid European shares with a commodity or Bric (Brazil, Russia, India, and China) exposure. History has shown equity markets perform best when central banks are scared but – to quote Van Gogh: “Yes, in summer we eat str...
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