Source:
The TelegraphThe Royal Bank of Scotland has advised clients to take out protection against the risk of a sovereign default by China as one of its top trade trades for 2011. This is a new twist.
Officially, inflation was 4.4pc in October but not many in China believes it is that low. Photo: EPA
It warns that the Communist Party will have to puncture the credit bubble before inflation reaches levels that threaten social stability. This in turn may open a can of worms.
"Many see China’s monetary tightening as a pre-emptive tap on the brakes, a warning shot across the proverbial economic bows. We see it as a potentially more malevolent reactive day of reckoning," said Tim Ash, the bank’s emerging markets chief.
Officially, inflation was 4.4pc in October, and may reach 5pc in November, but it is to hard find anybody in China who believes it is that low. Vegetables have risen 20pc in a month.
Read more:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8182605/Chinas-credit-bubble-on-borrowed-time-as-inflation-bites.html
My favorite part is that hedge funders actually bet against economies stabilizing.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8166440/Hedge-fund-manager-Mark-Hart-bets-on-China-as-the-next-enormous-credit-bubble-to-burst.htmlCheck that out!