Grand Rapids, MI -- (ReleaseWire) -- 07/09/2013 -- Financial advisor Dennis Tubbergen can usually be found helping his own clients. When he has a little free time he is busy writing his daily blog, his monthly newsletter Moving Markets or interviewing his next guest expert for his weekly radio show.
Tubbergen's next guest is Jeffrey Albert Tucker, the executive editor of Laissez Faire Books. Tucker is past editorial vice president of the Ludwig von Mises Institute and past editor for the Institute's website, Mises.org.
Tucker is also an adjunct scholar with the Mackinac Center for Public Policy and a faculty member at Acton University. He is the author of It's a Jetson’s World: Private Miracles and Public Crimes and Bourbon for Breakfast: Living Outside the Status Quo.
Tubbergen, who is an author, radio show host, and CEO of PLP Advisors, LLC, spends a lot of time giving his opinions on the economy in his online financial blog. On July 12, 2013 his blog was titled China's Debt Bubble Unprecedented.
“The Financial Post reported that China’s debt bubble is not only ‘unprecedented’ but has grown at near warp speed," began Tubbergen.
Below he quotes from the June 19, 2013 article.
China’s credit bubble is unlike anything in modern history, according to Fitch.
Ambrose Evans-Pritchard of The Daily Telegraph reported that Fitch thinks the scale of Chinese credit is so massive that it can no longer grow out of its excesses. And the statistics are scary:
“Overall credit has jumped from $9 trillion to $23 trillion since the Lehman crisis. ‘They have replicated the entire US commercial banking system in five years,’ she said.”
“The ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP, compared to roughly 40 points in the US over five years leading up to the subprime bubble, or in Japan before the Nikkei bubble burst in 1990.”
"I have been predicting a hard economic landing for China for quite some time," explains Tubbergen. "While this hard landing has yet to occur, these statistics validate my opinion."
Tubbergen goes on to say the ratio of credit to GDP has jumped almost two times faster than in the U.S. prior to the bursting of the subprime bubble or in Japan prior to the bursting of the Nikkei bubble.
When credit to GDP levels bubble this quickly the outcome can be predicted fairly easily – a bust follows.
Tubbergen states it is also important to remember that bubbles are often symmetrical. The faster and steeper the rise of the bubble, the faster and steeper the subsequent decline. Also, bubbles tend to take about as long to unwind as they take to build.
"With these guidelines in mind, I would expect that China’s hard landing is even more dramatic than what we saw in the U.S. in 2008 or in Japan in 1990," concludes Tubbergen. "When this happens, the rest of the world will feel the shocks."
To read the blog in its entirety go to http://www.dennistubbergen.com and select his July 12, 2013 entry.
Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.
About Dennis Tubbergen
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to www.moving-markets.com.
The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.