CBS News’ 60 Minutes ran a feature on China’s real estate bubble. It’s worse that anyone has heard.
It has begun to pop.
Today, the news is that China’s property-related shares are falling because of fears regarding this popped bubble.
As must as 30% of China’s economy is housing-related. The biggest bubble in history has now begun to falter.
Families have tied their savings into apartments. No one is renting them.
In Shanghai, buying an apartment costs 45 times the annual income of a typical Shanghai worker. This is a low-ball estimate.
It can’t go on. It won’t go on.
When this market comes down, the social fabric of China will be shredded. The middle class has poured its life savings into real estate speculation.
When the bubble pops, Chinese goods will get even cheaper to buy. Factories will try to keep their goods selling. They will have to cut prices.
During the bubble, the experts say “no problem.” Why? “No bubble.” Greenspan did. He was wrong. They all did. They were wrong. For a list of these reassuring statements, click here.