Given China's Current Economic Management Level, the Housing Market Will Inevitably Become Like the Stock Market!

2006/3/29 11:01:52

China's economic development has its inherent inevitability, primarily a form of inertia. Under this economic inertia, unless someone is an exceptionally massive idiot, bringing down the Chinese economy would actually be somewhat difficult. The housing market has been stirring a bit again recently, but it's really nothing major. Given China's current level of economic management, the stock-market-ification of the housing market is an inevitable trend. Isn't the stock market also performing quite well right now? Apart from some ill-intentioned bulls making noise, everything is fine.

The housing market is also fine right now. Some people have jumped off buildings over property speculation — that's perfectly normal. That's how a market economy works. There has never been a housing market in the world where nobody jumped off a building. A market economy is never gentle and tender. Everyone who jumps does so because of their own greed and stupidity. Nobody forced you to buy property, and speculating on property is even more deserved.

A market economy is a roller-coaster economy — the thrill of ups and downs. All traps are set for human greed and stupidity. So carry on as usual — winning and losing are both part of the game. Without this mentality, what business do you have being in the market?

As for the result of the housing market becoming stock-market-ified — just look at the stock market and you'll understand. Those who understand economic development cycles know that today's housing market situation is no different from over a decade ago. Think about the stock market and housing market of 1992, and you'll see that the world goes in cycles. Things that happened before simply repeat — nothing to be shocked about. Those with foresight left long ago. Those still stuck inside only have their own problems to blame. Who else are you going to blame?

The truth is always hard to hear, but those who refuse to listen always end up miserable. The people bashing the stock market right now will get slapped when the reversal comes — having missed the entire run. It's the same in the housing market: slapped from both sides.

(This article was originally written on May 25, 2005 and first published on Qiangguo Forum. On June 6, the stock market hit bottom below 1000 points. The housing market, after the June policy storm and subsequent oscillations, continued its strong run to this day.)