Greetings!Now actually take a moment to think about it, which Reuters obviously didn’t do (or if they did they didn’t care that their conclusion doesn’t make a whole lot of sense.) But I suppose what matters is what traders and investors think about the news.
Here’s what I think:
China is facing a very real credit market dilemma. And they openly recognize the growing risks of perpetuating their investment-led growth model of recent years. Yet they come out now and claim investment can further prop up economic growth and help China avoid a hard-landing.
Maybe in the short-term. Maybe if they create artificial demand for certain commodities and materials by promising railroad projects. Maybe if prices of these commodities and materials don’t fall further, maybe China can convey a sense of economic recovery.
It’s the same modus operandi. And maybe that way of operating still has some life left.
I tend to think it doesn’t.
Read on …
