China's Stock Bubble

In the last three weeks China's stock market has dropped by about 25%. Thats roughly $2.36 trillion dollars, or ten times the GDP of Greece. Its a metric fuck-ton of money.

China's stock market is still up about 20% from the beginning of the year.  Due to the massive growth we see in the graph above the law of averages states that a "balancing" was in order. The question is how much more their stock market will drop and how that effects us. Analysts predict it could drop another 35%  which would be roughly another trillion dollars.

So how does that affect us? Well;
"What happens in China will turn out to be far more consequential than any sting that Greece may deliver over the coming weeks or months,'' said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. "As China's equity markets lose their roar, the risk is that demand more broadly on the Mainland could take a hit. That would knock out an essential engine of world demand over the past decade. As dramatic as events in Greece currently appear, however, ultimately, it's difficult to see these proving decisive for the world economy.''

China has been pushing hard to develop as hard as could to modernize and get on equal foot with the rest of the world. That may slow or stop, hurting businesses and industries that have building China's infrastructure.

"Study strategy over the years and achieve the spirit of the warrior. Today is victory over yourself of yesterday; tomorrow is your victory over lesser men." - Miyamoto Musashi