Originally Posted by 9717
Harvard professor Ken Rogoff said the key policy instruments of the Communist Party are losing traction and the country has exhausted its credit-driven growth model. This is rapidly becoming the greatest single threat to the global financial system.
He said it was an error to think that China's current slowdown is entirely deliberate and calibrated. While the People's Bank undoubtedly wishes to curb the credit boom it is also riding a tiger that it cannot fully control.
“I fear this will be the third leg of the global debt supercycle, after subprime in the US and the debt crisis in the eurozone. Nobody knows how this is going play out but it could be on the scale of 2008 and it is will be very bad for Asia, and there will be spillovers in Europe,” he said