Friday, May 18, 2007

China amazes again

“The central bank also ordered banks to hold 11.5 percent of assets as reserves, up from 11 percent. Many banks already have even larger reserves, however, as they have been swamped with deposits from China’s brisk economic growth and large trade surplus, and have had trouble finding ways to lend this money.” more here

I have to say that I am amazed by the economic growth in China. My prediction of slowing growth has not even come close to reality. The affect of the central banks order for banks to increase reserves had almost no negative backlash. The problem: banks are already awash in money and can’t find enough people to give it to. The only response to that is: wow.

It’s hard to believe that China’s growth is going to slow any time soon but when it does it may be devastating to the U.S. and the world.

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