Andy Xie: China Inflation vs. U.S. National Debt, Who Crashes First

Andy Xie, former Chief Asia-Pacific Economist at Morgan Stanley who's now independent, was on Bloomberg TV talking about inflation in China, tightening measures, potential property market effects, hard landing versus soft landing, U.S. monetary policy, U.S. National Debt and the coming Treasury crash. After watching the video read his recent write up at titled "Good Tidings in 2011":

"The last crisis started in the U.S. If China hadn't reformed a decade ago, it could have started in China. An economic crisis in China would have prolonged the U.S.'s economic cycle by bringing down oil and other commodity prices, which would have improved the U.S.'s cash flow.

The most likely candidates to trigger the next global crisis are the U.S.'s sovereign debt or China's inflation. When one goes down first, the other can prolong its economic cycle. China may have won the last race. To win the next one, China must tackle its inflation problem, which is ultimately a political and structural issue, in 2011. If China does, the U.S. will again be the cause for the next global crisis. China will suffer from declining exports but benefit from lower oil prices."
(read full article at, Caixin Online)

2011 will be an interesting year of economic engineering. Happy MMXI everyone.