The major uncertainty facing the world today is not the euro but the future direction of China. The growth model responsible for its rapid rise has run out of steam.
That model depended on financial repression of the household sector, in order to drive the growth of exports and investments. As a result, the household sector has now shrunk to 35% of GDP, and its forced savings are no longer sufficient to finance the current growth model. This has led to an exponential rise in the use of various forms of debt financing.
There are some eerie resemblances with the financial conditions that prevailed in the US in the years preceding the crash of 2008.
George Soros: The Major Uncertainty Facing The World Today Is The Future Direction Of China $MACRO
1/08/2014 11:45:00 AM
George Soros at Project Syndicate said:
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