zlacker

I agree with all the points on top. The proper instrument to do this would be banks setting up a system that lets people borrow against an illiquid asset, in this case would be CNY, but it's not anything new... (and is one proposal for how to work with cryptocurrencies). That would price in the political and market risks.

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The last one I don't agree with. This is different from the 2008 crisis in that the 2008 crisis was primarily "internal" and for the most part zero sum --- some people gained, some people lost (kind of loosely like a long-horizon pump-and-dump scheme), and at the end things revert to the original non-inflated value.

This situation is more of an encouragement of external injection _into_ the economy. Rising prices are due to external capital flowing in (and the anticipation of more to come). Even if it were to pop, things would be no worse than a hypothetical alternative timeline where there was no bubble. And that's assuming no external capital actually flowed in, that not a single person wired money into the country. Clearly this is not true, and the money coming in is still net positive. So _in aggregate_, the economy is still improved due to the injection. Again, these gains are not spread evenly, and it may be the case again that some individuals will be hurt while others reap large returns.

> a generation’s quality-of-life gains going down the tube

If anything, that just means the previous quality-of-life gains were achieved by overdrawing against the future... nothing new here.