China's Pyramid Scheme Finds Lessons in Japan
Nov. 9 (Bloomberg) -- ``Their Pandora's box has been opened.'' That's how Yi Gang, the Beijing chief of the People's Bank of China, described what is among the most-tantalizing economic dynamics of our day: the get-rich-quick euphoria coursing through the world's most-populous nation. ``The Chinese people are no longer satisfied with putting their money in the banks after seeing the huge growth and development in the stock and real estate markets,'' Yi said yesterday, explaining as well as anyone why China's stock market keeps rising and rising -- and rising. It's hard to resist thinking Yi is inadvertently signaling the next phase of two Chinese bubbles -- one in real estate, one in stocks. China gives the concept of a pyramid scheme a whole new scale. After all, a key rationale for buying Chinese assets is that continued gains will only enroll ever-growing numbers of first-time investors. In all likelihood, things will end badly. Yet the scheme...