Thursday, December 24, 2009


clipped from

Ralph Peters advises us to enjoy our New Year’s champagne. Next year we’ll eat the glass. Peters predicts not one, but a string of possible sovereign bankruptcies. Dubai, Greece, Spain, Eastern Europe. The world’s fourth biggest country is already bankrupt, and its’ name is California. But wait: if the world really gets unlucky we may get to discover the truth about China. Is it a robust economy, or is yet another Ponzi scheme?

Then there are the great unknowns, a Russian economy that may be far more fragile than anyone wants to admit, as well as China, opaque and insatiable.

One of the reasons China’s desperate to keep expanding its trade is that its banking sector is flimsier than chopsticks — plagued by uncollectible sweetheart loans made to favored firms and institutions. Perhaps Beijing will dominate the 21st century. But it’s also possible that China’s economy will turn out to be the biggest Ponzi scheme in history.