Why China’s Bubble Economy Could Go Into Freefall

Bloomberg reports that, “China urged local governments to set up an early warning system to ensure sufficient oil supplies at filling stations, which face shortages across the nation.” China faces chronic energy shortages and the social and political instability those shortages foster with the population.

Do you get the feeling the communists in Beijing are barely keeping the Chinese economy together with bailing wire and duct tape? We don’t mean that China’s growth is a fluke. We mean that the tremendous growth unleashed is beyond the control of a central planner. The inability to maintain a fixed price for fuel is one example.

Let’s put it geopolitical terms and turn the microphone over to John Robb, forecasting what a decline in global trade might mean in the next few years in the closing chapter of his excellent book, “Brave New World: The Next Stage of Terrorism and the End of Globalization.

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