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China To Cut New Lending By Half To Deflate Bubble

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You mean create a huge stock market rally based on easy cheap credit?

Hmm I wonder what will happen to share prices if they do this? Won't that mean another stimulus to mop up after this bubble bursts. A little too late I fear.

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Not just a bubbled in their stock market but also in their housing market also. Surely they can see the mess that easy credit got both into in the West?

Yes but they will also see that it bought Brown a decade of uninterrupted growth. They need growth and debt expansion secures that for the short term.

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Good test for Keynes counter cyclical theory.

Be interesting to see if it is a controlled deflation or a collapse.

In a free market I'm pretty sure the herd instinct would take over and a crash would happen the second a government announced that.

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