[nathanbedford]

There are two other headlines in recent days which are to be considered along with the suspicion that China is manipulating its own market.

First, a declaration by the Chinese that they would no longer support the market; second, an indication that Chinese are selling American treasuries.

Are the Chinese selling American treasuries to use the money to intervene in the market? It seems highly unlikely that the Chinese would intentionally drive up interest rates on American treasuries to tank the American economy and in the process commit economic suicide by losing their own market.

Did the Chinese lie about their decision not to prop up their stock market? This article is alleging just that. Are the Chinese out of money with which to prop up their own market and need the money from American treasuries? Not likely, the Chinese simply printed money in 2008-2009 to prop up their economy and could do so now. That would aid them in their original purpose of devaluing their currency to make their goods more competitive.

I confess I do not understand what is going on. But I do have an understanding that what is happening could be terribly, terribly important for our own economy.

[bert]

the fallacy is believing understanding is possible

the markets are in turmoil precisely because understanding is not presently possible

[DungeonMaster]

China certainly has a different set of morals.

[blam]

"I confess I do not understand what is going on. But I do have an understanding that what is happening could be terribly, terribly important for our own economy."

You're not alone.

In a morning note to clients, Deutsche Bank's Jim Reid wrote of the volatile market environment: "One of the biggest problems we face is that there is no historical template for current global market conditions so we’re all flying blind to a large degree. Never before have so many of the most important countries in the world printed so much money and left base rates at near zero for so long. Also never before has the largest economy in the world tried to start a slow process of reversing said extraordinary policy."