Gordon Chang finally proven right

For a decade, Gordon Chang has been telling anyone who would listen that China’s economic boom was built on fake numbers and nonsensical economic activity like building empty cities that have no reason to exist.

The Peking ducks have come home to roost. Most of the stocks on the stock exchange were halted to prevent a faster collapse as people who speculated on margin are forced to sell stocks to meet margin calls.


The long term issue is this could break the spirit of the Chinese people who thought the Chinese market was more than just a mirage

Somewhat related, demand for oil is collapsing, and the end of sanctions against Iran will flood the world with more oil. At the current prices, costly oil extraction techniques like oils sands and fracking can’t compete.

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4 Responses to Gordon Chang finally proven right

  1. prboylan says:

    Yet another Communist Utopian bureaucratic centralized control economy bites the dust. Completely predictable, yet completely unforeseen by western progressives. The Soviet Union, post-WWI Germany, Italy, China, Cuba, N. Korea, Vietnam, Venezuela, et. al. made “avoidable” mistakes causing socialism to fail to deliver on the dream. But don’t give up hope. They say it’ll work this time- they just didn’t go far enough, didn’t change human nature (greed) enough. The U.S. will show the world how it’s done!

    217 trillion dollars of unfunded Federal debt liabilities later…

    • Art Stone says:

      I have a friend in Chicago who is obsessed with money. He spent weeks of his time (and mine, and others) trying to save money by buying a used PC on eBay.

      When I happened to mention that China was unraveling (the real estate market first), he looked at the stock market having gone up 80% in a year. I wouldn’t be surprised if he invested in it as a result of my warning.

      The U.S. Stock market is only slightly less contrived. I’m not sure of the mechanisms, but I’m pretty sure the stock market is whatever the U.S. Treasury and the Federal reserve want it to be. When NASDAQ reopened after 9/11, the intervention was extremely obvious. For a couple days, the index would drop 5% and stop, then flatline for the rest of the day. Since the indexes are made up of many stocks, it’s impossible for an index to not move during the trading day. My suspicion was Goldman Sachs is the conduit the Fed/Treasury use to intervene in the stock market.

      • CC1s121LrBGT says:

        The Fed creates Fiat money at will and CME has special accounts for central banks (Google it, starting with the zerohedge site). They have been known to trade futures, as many as needed to get the price they want to drive stocks higher and gold lower.

        The Fed was created by Congress which has the Constitutional responsibility of maintaining a sound currency, but they are strongly against being audited.

        By the way, Congress gets closed door testimony from the Fed and is exempt from the insider trading laws. Google Congress (or just Pelosi) and insider trading.

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