The Golden Triangle

Written by Cliff on Friday 10 January 2014 at 10:07 am

At the heart of Hong Kong’s economy is the triangle of government, property developers, and banks. The former two mark up land prices through auctions. The later make loans to both with inflated land as collateral. As statistics show, land prices rise much faster than the economy, and credit becomes concentrated in the government and developers. As they use money inefficiently, inflation has risen, essentially a tax on anyone not involved in propagating this vicious cycle. This spiral of credit concentration and inflation is becoming wobbly over time due to its rising share in GDP. What I would term as ’empty growth’, analogous with ’empty calories’ – it tastes good, but in the long term will give you diabetes, heart disease and gout.

~ ~ ~

Leave a comment

Comments »

No comments yet.

RSS feed for comments on this post | TrackBack URI

Powered by Wordpress - Triplets Identification Band by Neuro - Adapted for use by ViperFusion,