Posted on 07/08/2015 5:31:17 AM PDT by Enlightened1
China looks like it is heading for its version of the 1929 stock market crash
While all Western eyes remain firmly focused on Greece, a potentially much more significant financial crisis is developing on the other side of world. In some quarters, it’s already being called China’s 1929 – the year of the most infamous stock market crash in history and the start of the economic catastrophe of the Great Depression.
In any normal summer, a 30pc fall in the Chinese stock market – a loss of value roughly equivalent to the UK’s entire economic output last year – after an ascent which had seen share prices more than double within the space of a year would have been front page news across the globe.
The dramatic series of government interventions to stem the panic – hitherto unsuccessful, it should be added – would similarly have been up there at the top of the news agenda. Yet the pantomime of the Greek debt talks, together with the tragi-comedy of will they, won’t they leave the euro, has relegated the story to little more than a footnote - even though 940 companies, more than a third, have now suspended trading on China’s two main indices.
(Excerpt) Read more at telegraph.co.uk ...
Its all interconnected today, sir...
First thing that comes to mind is the need for liquidity resulting in a dump of a lot of their held assets. This includes significant holdings in Treasuries and US Equities. If those get unloaded, the equity prices fall and so do the treasuries. A decline in the price of the treasuries increases market interest rates for everyone, Fed action or not.
The second thing that comes to mind is price reductions to preserve market share. That is deflationary. Also less demand for commodities, such as oil, copper, steel, etc... That would reduce prices and that is also deflationary.
Deflation, in a rising interest rate environment is a pretty poisonous cocktail to our own economy, given that it is more of a house of cards than anything else right now.
See my previous reply. This is not good news for the US.
First you say dumping/selling bonds in inflationary then you say what comes next is deflationary. So in the end big whoop. I am not afraid, China is a BS country trying to act like it has it crap together egged on by vulture capitalists. I call it gloBULLism.
They are the biggest Economy in the world. That’s the way it works.
DP Developing 7 vs GDP G 7
38.417 Trillion USD vs 34.740 Trillion USD
The Developing 7
1. China
2. India
3. Russia
4. Brazil
5. Indonesia
6. Mexico
7. South Korea
The G 7
1. USA
2. Japan
3. Germany
4. France
5. UK
6. Italy
7. Canada
The 15 biggest economies in the world 2015 ( PPP )
Rank Country GDP (Billions of US$)
1. China 17,617.3
2. United States 17,418.9
3. India 7,375.9
4. Japan 4,750.8
5. Germany 3,721.6
6. Russia 3,564.5
7. Brazil 3,263.8
8. Indonesia 2,676.1
9. France 2,580.8
10. United Kingdom 2,548.9
11. Mexico 2,140.6
12. Italy 2,127.7
13. South Korea 1,778.8
14. Saudi Arabia 1,605.7
15. Canada 1,591.6
The following are 26 other ways that China has surpassed America…
#1 When you add up all imports and exports, China now accounts for more total global trade than the United States does.
#2 There is now more total corporate debt in China than there is in the United States.
#3 During 2013, we sold about 121 billion dollars worth of stuff to the Chinese, but they sold about 440 billion dollars worth of stuff to us. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#4 China is now the leading manufacturer of goods in the entire world.
#5 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.
#6 The United States had been the leading consumer of energy in the world for about 100 years, but during the summer of 2010 China took over the number one spot.
#7 China now has the largest new car market in the entire world.
#8 China has more foreign currency reserves than anyone else on the planet.
#9 China is the number one gold producer in the world.
#10 China is also the number one gold importer in the world.
#11 15 years ago, China was 14th in the world in published scientific research articles. But now, China is expected to pass the United States and become number one very shortly.
#12 China is also expected to soon become the global leader in patent filings.
#13 China awards more doctoral degrees in engineering each year than the United States does.
We are in a real estate bubble too.
Compound that with the Euro that is about crash because of Greece.
Greece will still be the first to fall. How symbolic is that?
They were doing ANYTHING necessary to
1) Keep people employed and
2) Keep the economic numbers looking good.
Centrally managed control over everything is just as corrupt, if not more-so than any private, for-profit enterprise. We’re just more open about what our goals are.
You are probably right. Just underscores the consequences of the long term detriment when politicians direct the application of capital. In the US it was political coercion on banks to issue “sub prime loans” that was at the core of the crisis.
F China.
Correct. Add in the years of currency manipulation and you can see why this has been brewing for some time.
No, the rise in INTEREST rates by the reduction in bond prices is not inflationary. Typically, market interest rates are increased to REDUCE inflation.
And yes, the inter-connected nature of the economic system is a downside to globalism.
Not for long.
our own economy, given that it is more of a house of cards than anything else right now
That being the case, the sooner it falls the better.
Obama had Geithner and the Chinese to keep buying our funny-money debt and obama bowed to them in gratitude
Who does China have?
Luckily our debt is under control because the debt counter hasn’t budged a penny for over a month
sarc
While countries are falling like “DOMINOES”, these financial “WIZARDS” keep telling us; “DON’T WORRY, BE HAPPY”. These politicians refuse to admit that the days of “FREE WHEELING” government spending, with the ever rising “BENEFITS” must come to an end. First it’s Greece, now it’s China. Eventually, no matter what these “FINANCIAL WIZARDS” and our government politicians will realize that all of this will come to an end. I hope that everyone in “FREEPERS” have made plans to protect themselves and their families.
Perhaps you should be worried
Do you think billions of Chinese will accept standing in soup lines and the Chinese government will start a CCC to put them back to work?
War has always been an employer of last resort. So where how and when does China go to war?
OK, I'm worried.
Do you think billions of Chinese will accept standing in soup lines
I couldn't care less.
War has always been an employer of last resort. So where how and when does China go to war?
Don't know, but we had better get ready.
Bookmark
I think the Chinese government may be asking a lot of questions at Sina Weibo, the Chinese equivalent of Twitter, and whether Weibo postings were fueling the speculation up and down in regards to stock market indices.
BTC is up over 12% in the last two weeks.
It is up almost 20% over the last 30 days.
source: blockchain.info
? Economic wars lead to shooting wars.
Pei Ping.
Greece is so screwed.
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