Take the Dubai property market for example - Skyscrapers and man-made islands:
way too many speculators, very few actual users, and all of it supported on a mountain of debt.
That's just asking for trouble.
Everyone has heard of China being the ''factory'' of the world, after all - everything seems to be ''Made in China''.
I've been scanning google links on the overcapacity in China's Industrial sector.
China Overcapacity Wreaks Global Harm, EU Group Says
http://le-iss.com/metals/?p=24319
Steel Guru : Strong demand leading to steel overcapacity in China
China's September data suggest that the long-term overcapacity ...
Reasons for concern: Wafer thin margins + surplus industrial capacity + massive debt levels
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That's going to be one '''toxic''' cocktail at a time when consumers in the developed world are looking to ''save'' rather than ''consume''
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Long term opportunities aside, it's time the whole world starts to save more, and pay down debt.
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A sustainable long term recovery will be based on
- 'savings led investment'
- adequate risk capital for lenders
- fair and non manipulative accounting practices
- a sound banking system.
Stimulus packages, bailout packages and questionable accounting practices are not the way out of this mess!
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