We all know by now that our economy is on the decline, and the the dollar’s purchasing power has fallen; it is clear that we are past the point of “recession” and either on the edge of or just beyond the edge of a depression.
There have been reports of our economy plummeting in November of this year, and now there is more ammo for that gun. Many investors, and financial analysts claiming that China’s economy will tank this year due to their own real estate bubble.
Cornerstone Wealth Management CEO David Hefty predicts that the Dow will drop to 5000 this year after China’s economy goes tits up.
“You can’t build cities for millions of people and have them half full – there’s problems with that, and not only are they going to be facing this real estate crash themselves but they’re facing inflation, so they’re going to have to slow their economy down in the midst of a real estate crash, and I didn’t even mention Europe,” said Hefty.
Business Week has been keeping an eye on the Chinese markets:
China’s Shanghai Composite Index may drop as much as 6 percent after breaching the 250-day moving average for the first time in a year, Shenyin & Wanguo Securities Co. said.The benchmark gauge plunged 4.8 percent to 2,980.3 yesterday, the most in eight months, on concern government measures to curb real estate speculation will slow economic growth. The index may extend losses until reaching the next support level of 2,803…
Bloomburg notes this about the Chinese economy:
In China, where property prices rose at a record pace in April and consumer prices climbed at the fastest rate in 18 months, the economy faces the risk of a “significant slowdown,” Roubini said.“China should be tightening monetary policy, increasing interest rates and let its currency appreciate over time,” he said. “They are too slow, they are not doing it fast enough.”
Perhaps all of the fuss I’ve heard about our economy being flushed in November is due to China’s real estate bubble bursting and rippling throughout the globe leading us to another Great(er) Depression.