Jeremy Grantham, "the Chinese economy is dangerously unbalanced"

By on July 29, 2009

Jeremy Grantham, who has demonstrated an uncanny ability to predict the markets lately, says his colleague Edward Chancellor has reservations about the stability of the Chinese economy. A collapse of China’s growth would reverberate throughout the emerging markets, which have become one of the darlings of this cyclical bull market.

Grantham also fears the world is running out of resources and is not pricing this development properly. “Thirty precious years have passed, and there is now no safety margin. We must prepare ourselves for waves of higher resource prices and periods of shortages unlike anything we have faced outside of wartime conditions,” he writes.

Grantham still believes big U. S. companies represent the best values.

Sources:

http://www.businessinsider.com/henry-blodget-grantham-china-will-collapse-2009-7

http://blogs.reuters.com/macroscope/2009/07/28/running-out-of-resources/

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9GYrCVBCfh8
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