Thursday, December 26, 2013

China juggling asset bubbles

People should prepare for more oil shocks. China has built a lot of high-speed rail, but has also been putting additional cars on the road at worrisome rate. This demand for oil is unsustainable and exists by virtue of the expectation of return on credit. A crash will come, demand will plummet, and oil projects will be abandoned. After much pain and suffering, the cycle will be repeated.