China's Multiple Bubbles

Received from Angelica as a comment to my post Too Much Optimism In this Stock Market, I am glad to publish it because I find it very interesting.

I am in the camp that believes that this so-called economic recovery over the past 12 months has been completely due to government spending and stimulus. Trading volume since January 1st of this year has been very light and definitely not indicative of strong buying by the general public.

Who then is doing the buying? The Federal Reserve has representatives in the trading pits of the NYSE and commodity exchanges giving support to asset prices. I firmly believe we will experience years and years of deflation where everything goes down in value, yes, including gold and oil. Sorry for you commodity bulls but you are about to experience what happens to commodities when demand falls off a cliff.

Read more »