In a follow up to an earlier discussion on China's credit growth (see post), here is a rather alarming scatter plot from Credit Suisse.
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| Source: CS (click to enlarge) |
It shows the non-financial credit growth vs. the investment growth across a number of nations. When credit growth significantly outpaces investments into the economy, a nation could be in for a deleveraging period. The 1985-1989 Japan is an example.
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