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China still streets ahead

Discussion in 'The Economy' started by Billv, 9th Sep, 2008.

  1. Billv

    Billv Getting there

    15th Jul, 2007
    Sydney, NSW
    By Alan Kohler

    We can now cross off higher official interest rates from our list of things to worry about.

    Let's doff our caps to the end of a six-year tightening cycle.
    Did it go too far?
    Yes it did, and I said so when they tightened in February and March.
    But that's not why we're in trouble now.

    There's something else I'm really worried about: Australian house prices (but not for the reason you think). But there's one thing I'm not worried about at all which everybody else seems to be getting into a lather about: the Chinese economy now that the Olympics are over.

    Property analysts who are saying that a shortage of supply will keep prices high are scaring the hell out of me not because I think they are wrong and that house prices will fall, but because they could be right.

    House prices need to fall. In real terms they are cripplingly high, and if the economists are right, and we are in for another housing boom from here because of demand and supply, it will be disastrous.

    China still streets ahead - ASX - Australian Securities Exchange