China Must Follow Japan to Survive

by Richard Duncan
Daily Reckoning

China has been transformed by a credit-fueled investment boom unlike anything the world has ever seen.

A credit-based economy, built around what has effectively been the dollar standard, made it all possible. There’s no limit to the amount of credit that can be created under a fiat money system. And the dollar standard created a very large global boom, as U.S. dollars flooded into countries like China.

Between 1990 and 2014, investment in China increased a staggering 50-fold. Between 2007 and 2014 alone, investment in China increased by 236%. In the U.S. meanwhile, investment only increased 6% over that same time period.

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