Marc Faber :
There has been a huge credit bubble in China, and it isn't going to
end well. Its economy officially grew 7.7% in the first quarter. In
reality, it is growing 4% a year, at best. Figures on Chinese exports to
Taiwan, South Korea, Hong Kong, and Singapore don't agree with the
import figures of those countries. In each case, reported exports are
much larger than reported imports. Singapore publishes relatively honest
economic statistics. Its gross domestic product has hardly grown in the
past six months. Inflation is about 4% a year. Here in Thailand, growth
has slowed despite massive fiscal stimulus. Trade and current-account
surpluses have been shrinking in Malaysia, Indonesia, and other
countries.
Again, the economy of the rich is
booming. There has been huge wealth accumulation in Asia in recent
years. But the middle class has experienced diminishing purchasing
power. Throughout history, growing wealth inequality has been corrected
either peacefully, through taxation and wealth redistribution, or by
revolution, as in Russia. I am not sure we will have a revolution in the
Western world, but I can see European voters turning against the
arrogance of the bureaucracy. There have been so many scandals involving
French politicians with Swiss bank accounts, and so forth. - in Barron's
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