Houston, TX (PRWEB) July 05, 2012
The George Jarkesy Show was glad to welcome internationally known economist and author, Dr. Lacy Hunt to the show last week. Dr. Hunt joined the show to talk about the Chinese economy.
George Jarkesy began the conversation by referring to a poll in which American’s stated that they believe the Chinese economy to be succeeding financially. Dr. Hunt disagreed with this stating that “the Chinese economy is…fragile [and] vulnerable.” He attributed this to the government debt of the Chinese nation, being “166% of GDP” in comparison to America’s debt of 102% of GDP. Dr. Hunt also mentioned the spending habits of the Chinese to be highly weighted in investments. He states that this over investment has created a “highly malstructured economy” that is producing “highly unproductive or counter productive” capital expenditures. Jarkesy chimed in stating from his own travel to China that he recalls seeing “abandoned hotels and apartment complexes.”
Co-host Dwayne Deslatte then inquired about the effect of capital allocation by the government and not by the market. Dr. Hunt agreed it was an issue stating that “government entities are not in a position to allocate capital nearly as efficiently as the private sector.” He added that research has been done which reveals that systems like this will “ultimately fail.” Dr. Hunt also stated that the Chinese government has “created a system that is very difficult to reorder” revealing that the country is “likely to be more unstable as time goes by.”
To hear the full episode, please visit the website.
About Jarkesy & Company
George Jarkesy is a money manager and professional investor, respected financial and corporate advisor, and radio host of the nationally syndicated ‘The George Jarkesy Show’. He is a frequent market commentator and guest on FOX Business News, FOX & Friends, and CNBC. George started his career in the financial services industry with a New York Stock Exchange member. George also serves on the Finance Committee of the Republican National Committee and is an active member of the National Investment Banking Association, The Jarkesy Foundation, and Chairman of The National Eagles and Angels Association.