Published on Jan 23, 2017
It takes four dollars of debt to create a single dollar of GDP growth in China. For context, at the peak of the GFC in 2008 it was taking three dollars of debt to create a dollar of GDP growth in the U.S. China has received the kiss of debt, says Ruchir Sharma.
Transcript – What our research shows is that if you look back in history the single most important predictor of economic and financial trouble is when a country takes on too much debt over a short span of time. If a country does that it’s bound to make bad loans. It’s bound to make bad investment decisions because there’s no way that you can lend too much money and find enough credit worthy borrowers to make the right decisions with that money over a short span of time. So the exact way that we define this in the book is that if a nation takes on too much debt over a five-year time horizon the next five years typically tend to be very bad for a country. Now as far as China’s concerned there is no developing country in history which has taken on so much debt over such a short span of time as China as done in the after crisis era. Read Full Transcript Here: https://goo.gl/yQbtjV.
Continued from part one... Q1 hedge fund letters, conference, scoops etc Abrams and his team want to understand the fundamental economics of every opportunity because, "It is easy to tell what has been, and it is easy to tell what is today, but the biggest deal for the investor is to . . . SORRY! Read More
Quite simply the best guide to the global economy today.” ?Fareed Zakaria
Shaped by his twenty-five years traveling the world, and enlivened by encounters with villagers from Rio to Beijing, tycoons, and presidents, Ruchir Sharma’s The Rise and Fall of Nations rethinks the “dismal science” of economics as a practical art. Narrowing the thousands of factors that can shape a country’s fortunes to ten clear rules, Sharma explains how to spot political, economic, and social changes in real time. He shows how to read political headlines, black markets, the price of onions, and billionaire rankings as signals of booms, busts, and protests. Set in a post-crisis age that has turned the world upside down, replacing fast growth with slow growth and political calm with revolt, Sharma’s pioneering book is an entertaining field guide to understanding change in this era or any era.
A Library Journal Best Book of 2016