China Central Bank Head at G20 : The Chinese bubble has popped

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We are pretty much obliged to run this one. Of course it has popped. It’s been deflating for months. Really longer than that though the Shanghai Stock Exchange didn’t reflect it for a while. And it’s not like the Chinese pop is over, it’s got plenty more to go. Lots of “fun” is still ahead of us.

People who care about the world economy and world politics should look closely at China. It is a classic case of “mainvestment.” This is a very important concept to understand. The great(est) Keynesian experiment is unwinding now. Good to know why.

(From Bloomberg)

Global finance chiefs sought to contain tensions over currency movements with China suggesting its August devaluation won’t be repeated any time soon and Japan labeling the Chinese unhelpful.

Zhou Xiaochuan, governor of China’s central bank, told a meeting of Group of 20 finance ministers in Ankara that a stock-market bubble in his country had “burst,” according to Japan’s Taro Aso. Another official present at the talks said China had presented the country’s situation as a new normal.

“It wasn’t enough,” Aso told reporters. “They may have tried to be constructive, but they weren’t detailed enough.”

Click here for the article.

And by the way yet another chemical plant exploded in China yesterday.