In today’s Wall Street Journal an editorial said that China’s lending exceeded quota by 40%. “Local governments and banks have set up off-balance sheet vehicles to conceal loans and keep the spending boom going.”

    This could explain China’s overheated bubble economy. The article said it could go on for another year and thus the bubble will get bigger.

   Since China is one of the three pillars of the world economy along with the shaky Eurozone and the U.S., which has a huge unresolved burst housing bubble, then this means all three pillars are unreliable and could get worse. My independent investment advice is that a deflation strategy is correct. This would imply one should do bond investing, and one should examine alternative investment advice for ways to weather the storm.