Okay, so it seems to me that China is the elephant in the living room for many austrians. It even seem to provide some valuable ammo to our rivals. Its credit expansion since ’08 is simply unprecedented. Brief summary (2008-2014): Total credit has increased from $9 trillion to $23 trillion, M2 money supply showed a threefold increase, total debt/GDP increased from 147% to 251%
Real Estate prices have gone through the roof. In addition to the credit expansion, regulations, state ownership, low bank deposit rates, a stagnant stock market and strict capital control have basically forced money into the real estate market, Result: the 3 largest cities the top 3 least affordable cities in the world when using the median price/median income ratio(2013), and ghost cities. Yes, the downpayment is high and urbanization will create demand. But still..
Isn’t this misallocation at its finest? Doesn’t this have “Austrian Boom-Bust” written all over it?? Yet, I rarely hear austrians talk about China.
Any thoughts?
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