Take a break from the China's truth. Here, we may have a financial markets truth. Over the last few years, 5 to be exact, the financial markets (share price, precious metals, crude oil, vegetable oils, coffee, corn, maize) have been moving up and down in a synchronise way, somehow, not many talk about it.
Another areas, the bankers has been avoiding since 2007, is the US$600 trillion derivatives. This is actually the main reasons behind all the drastic movements of up and down of the financial markets. Over the last 20 years, US$ debt or credit have increased many fold to US$75 trillion, not to mentioned record high trade and budget deficit US is facing, and its contingent liability from medicare, socialcare and medicade, which are unlikely able to pay.
So, the question is where would the financial market goes once the US$75 trillion debts become non performing over time, meaning, credit will never grow at the pace it has grown over the last 30 years. Gary Shilling called it DELEVERAGING.
Just look at Japan in the 1989, likely, the world now is going through what Japan is going trough, but many times higher, thanks to the new debts created and the huge DERIVATIVES.
So, put on your seat belt. And, enjoy the roller coaster, if it didn't derail, it will be fine.
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