Destined for war? China, America and the Thucydides trap – (Hat tip Lao Ho) – ““If Hollywood were to make a movie pitting China against the United States, central casting could not find two better leading actors than Xi Jinping and Donald Trump. Each personifies his country’s deep aspirations of national greatness.” More dangerously, both men “identify the nation ruled by the other as the principal obstacle to their dream”.

IMF on why high household debt is a problem – ” Furthermore, the accelerated pace of private debt accumulation can lead to economic and financial instability, which often coincides with great risk-taking and poorly regulated and supervised financial sector.

Italy at the Grim Edge of a Global Problem – “…if Italy’s future generation of workers are expected to struggle to support themselves and their children until they’re well into their forties, how will they possibly be able to support the burgeoning ranks of baby boomers reaching retirement age (66 years and seven months for men and 65 years and one month for women), let alone service the over €2 trillion of public debt the Italian government has accumulated (and which doesn’t include the untold billions it hopes to splash out on saving the banks)?

China must reform or bust – George Magnus. “Yet, the focus on debt to GDP and bad assets, while important is also inadequate, as I am going to try and explain here. In a state-owned banking system, debt accumulation and misallocation of capital can go on for a long time, even if eventually someone has to pay for it, as they always do.

This Is Where China’s Next Wave of Investment Bubbles Will Come from – (Hat tip Lao Ho) – “While steel and coal get the headlines, many other industries are also already suffering from, or heading for, major oversupply, even in the service sectors that are benefiting from rapidly growing consumer demand.

Picture of the day: Spring blossoms

About Carlito Riego

"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi