China Banking Crisis “Almost” Certain Says Senior International Economist; Global Banking Crisis “Is” Certain Says Mish

Jon Blogosphere, Economy, Government

The Sydney Morning Herald warns about a ‘clear and present danger’: Australia to be Hit as Chinese Economy Unravels
Speaking at a conference on Thursday, the federal government’s former top resources forecaster Quentin Grafton said the iron ore price was unlikely to recover quickly, leading to a painful downturn in the Australian economy in 2015.
“This isn’t about doom and gloom, it’s about looking at the risk and numbers. It’s a clear and present danger,” Mr Grafton said.
He said the Reserve Bank of Australia should prepare for a difficult ride as the overpriced property market and high dollar created a challenging economic environment as coal and iron ore prices dropped.
Mr Grafton’s comments join an increasingly vociferous choir of concern about the Chinese economy, with investor fears stoked by a Chinese residential property market that is experiencing its worst slump on record.

This post was published at Global Economic Analysis on Saturday, September 06, 2014.