With the eyes of the world on Greece and a possible collapse of the of the Eurozone as a likely end result, many are ignoring a potentially much more massive elephant in the room. It’s been the hottest market in the world, so flush with cash that they have actually built entire ghost-cities lacking populations and mega shopping centers without tenants – a clear sign of bubble waiting to be pricked. But the inevitable seems to now be taking hold as once unstoppable Chinese stock markets are now reversing the unprecedented gains seen over the last several years.
Forget Greece. We’ve seen that story before. This could be the first domino:
The Chinese market is in an all-on crash.
Last night the Shanghai index was down 8%, and while there have been some wild recovery rallies during the last couple of weeks as well the cumulative loss is close to 20% at this point, the formal “declaration” of a bear market.
That market had been in a parabolic blow-off since roughly December, a classic (to a chartist) three-stage parabolic move with two retracements. The most-recent move down, however, threatens to violate the uptrend support originated back in November and has already erased the gains since May.
Yes, a 2-month round-trip of about 20%.
“Liquidity” is usually given as the reason for the “reasonableness” of stock valuations these days. I have only one question: What happens when said “liquidity” is really nothing more than a loan (which it always is) and the borrowed funds are lost instead or producing “gains”?
Source: Karl Denninger / The Market Ticker
What happens is exactly what’s happening in Greece and China, and what will undoubtedly soon come to pass in the United States.
The actions of the world’s wealthy should be followed closely, and as we’ve note previously, they are being told to make sure they have physical assets like cash, gold and silver on hand in anticipation of a serious destabilizing event. The reset is coming, and as was recently noted by Brandon Smith of Alt Market, the next stage of the elites’ plan for total global economic centralization is about to be in full effect.
With China’s stock markets now imploding on a scale that can only be described as a crash, it is only a matter of time before the chain reaction of derivative-based defaults leads to similar detonations across the entire world.
What comes next is anyone’s guess, but it won’t be pretty. One possible outcome, as suggested by analyst Greg Mannarino, is pretty much the worst imaginable scenario and one we have urged our readers to prepare for:
It’s created a population boom… a population boom has risen in tandem with the debt. It’s incredible.
So, when the debt bubble bursts we’re going to get a correction in population. It’s a mathematical certainty.
Millions upon millions of people are going to die on a world-wide scale when the debt bubble bursts. And I’m saying when not if…
When resources become more and more scarce we’re going to see countries at war with each other. People will be scrambling… in a worst case scenario… doing everything that they can to survive… to provide for their family and for themselves.
It’s a scary proposition and one from which escape for the general population of the world seems impossible. As Mannarino notes, “there’s no way out.”
It will be, for all intents and purposes, every man for himself. The elite know this and that is likely why they are buying aircraft landing strips, rural hideaways and divesting themselves of paper assets.
If we are, in fact, on the cusp of this next great paradigm shift, it will be littered with panic, widespread civil unrest and shortages of essential good necessary for survival. It is a scenario for which the government has prepared for over a decade, but as former DHS head Janet Napolitano has wanred, such an emergency will leave the government overwhelmed and unable to assist those in need.
That means you’re on your own and your only saving grace will be that you take steps to prepare for disaster ahead of time.
As collapse survivor Selco has warned, once this goes down there will be little room for error: Either you’ll learn fast or you’ll end up dead.
Of course, we could be overreacting. The Chinese stock market crash is happening so far across the ocean that we probably don’t need to be paying attention. And as for Greece, Americans will never have to line up in front of empty ATM’s hoping to get enough money out to put dinner on the table.
The government would never let that happen, right?