Greenspan Visits Scene of Fed's China Crime

Bloomberg reports on easy money:

To show he means business on China opening its economy, U.S. Treasury Secretary John Snow recently had a powerful prop on hand: Alan Greenspan.

While the Federal Reserve chairman retains an almost godlike aura in Asia, even as debate rages about his legacy at home, Greenspan's presence in China last week didn't help the White House get its way. In fact, Snow seemed to retreat from his campaign to force China to let the yuan rise.

The official U.S. line is that Snow's China trip was a smashing success. Belying that stance is how Snow changed the subject from China's currency to a longer-term goal of ``financial modernization,'' whatever that means.

The trip did offer the Fed chairman a chance to visit the scene of what history may show to be one of his biggest blunders: China's asset bubble.

China's property market, for example, is white hot. Builders will construct a record 4.7-billion-square feet or more this year, up from 2 billion in 1998, the New York Times reported. In Shanghai alone, there are plans for another 1,000 skyscrapers over the next decade, on top of the 4,000 already there. Amid such a boom, is it really surprising that China grew a faster-than- expected 9.4 percent in the third quarter?