Fr the Global Financial Tsunami to Property Bubbles in Asia - Hardcover

by Yip Paul Sau-Leung (Author)

This book discusses the formation of the current huge property bubbles in many Asian economies and the high likelihood of another Asian financial crisis due to the eventual bursting of these property bubbles. In particular, it explains:

• How the Quantitative Easing (QE) programs helped avoid a great depression after the Global Financial Tsunami;
• How the QE programs contributed to the formation of huge property bubbles in many Asian economies;
• The pricing power and hoarding power of Asian developers due to the market structure problem and the indicator effect (from new property prices to resale property prices) in Asian housing markets;
• The role of the market structure problem and indicator effect in the formation of the current property bubbles in many Asian economies;
• The important characteristics of the seeding stage, the development stage and the final stage of an asset bubble;
• How the understanding of these characteristics could help policy makers in pre-empting or curbing an asset bubble, and help investors in properties, shares and other assets investments;
• The high likelihood of an eventual bursting of the gigantic property bubbles in Hong Kong, India or another Asian economy, which would in turn trigger another Asian financial crisis;
• The underlying causes of the housing problems (especially high real housing prices) in Asia, and the recommended long-term solution.

In view of the huge costs due to the macroeconomic policy mistakes in many developing economies and some advanced economies, this book recommends the development of a new economic discipline on macroeconomic management and rigorous selection procedures of key economic and monetary officials. If properly done, these would help pre-empt financial crises, currency crises and asset bubbles in the future.

Front Jacket

This book first provides a concise review on the global financial tsunami and the European debt crisis, and draws important lessons for future macroeconomic policy management. It then explains why the quantitative easing in the US and the unique characteristics of the Asian property markets have contributed to the formation of property bubbles in some Asian economies. It also explains there could be further enlargements of the property bubbles, formation of stock market bubbles and huge exchange rate cycles in some Asian economies in the forthcoming years. Thereafter, it discusses the possibility of an eventual bursting of asset bubbles and currency attacks in Hong Kong, India, Taiwan, Singapore, Malaysia or another Asian economy, and highlights that the bursting of asset bubbles or currency attacks in any one of these economies could trigger a crisis in this region through the contagion effect. After pointing out that the implied crisis could be as severe as the Asian financial crisis in 1997-98, it discusses short-term curbing policies that could mitigate or pre-empt the potential crisis and long-term policies that could rectify the severe long-term problems in these Asian property markets. Finally and most importantly, based on the detailed discussion in the first eight chapters, the final chapter draws a large number of important lessons for macroeconomic management against asset bubbles and crises, housing policies in these Asian economies, and investments in the stock and property markets.