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Tuesday, 1 March 2016

Stocks Nosedive: PANIC Engulfs #China

 We  Told You So 

As much as we truly hate saying it, as well, as warning folks, time and time again, for years and months on end - about the huge, looming Chinese meltdown- it was  as if we are just talking to ourselves. Nobody appeared   to listen.

Conditions here mirror the US markets and economy of the 20's that lead to that  BIG crash. This one is going to be worse, much worse . Why? Just because the extremes are greater and it's a much larger bubble number-wise involving 1.5 billion Chinese people  (US was near 100 million). That's tells you it is potentially 15 times worse in terms of ramifications  based on China's economy alone. 

OK  - now are you going to lend us your ears...

China Devalues Yuan as Stocks Crash


With China devaluing its currency, stocks crashing 3 percent and capital flight accelerating, China has cut back its bank reserve requirements to free up $100 billion in credit.

Facing pressure from huge capital flight, the Chinese allowed their yuan currency todevalue to 6.6 yuan to the dollar on Feb. 29, causing local stock markets to crash by 3 to 5 percent — to levels not seen since late 2014.
To try to stop the rout, China’s central bank cut its deposit reserve requirement ratio by 50 basis points, to 17 percent, in an effort to free up about $100 billion in new credit for the world’s second-largest economy. The cut marks the fifth time in the last 12 months, but the first time since October 23, that China has had to reduce bank solvency to deal with financial panic, according to Stratfor Global Intelligence.

China central bank cuts reserve requirement ratio by 0.5 percentage points 

China's central bank, the People's Bank of China, has cut further the reserve requirement ratio, the amount of cash the country's banks have to hold, in an attempt to calm investor jitters over the world's second largest economy. The PBOC cut the ratio ...

China expects to lay off 1.8 million workers in coal, steel sectors 

The central government will allocate 100 billion yuan ($15.27 billion) over ... There are many issues to be dealt with, including how to pay debt as well as layoffs.

Financial Precipice à la 1929?  

There is a huge laundry list of leading economic indicators I could point you to for visualizing the sick economy, but perhaps the king of all leading indicators is the price of oil. It has absolutely cratered in the past year and a half. It’s gone from well over $100 per barrel to now hovering around $30 and flirting with the idea of going lower, a 70%+ decline. Now why would oil drop in price so dramatically? 

Is it because the Saudi’s are trying to drive the American shale industry out of business? No, it’s much simpler than that. People simply don’t need as much oil because they aren’t producing enough goods because there aren’t enough people willing to buy those goods. When demand dries up, sellers are forced to lower prices to entice buyers to keep buying.

Mervyn King: The  Eurozone is Doomed

The eurozone is doomed to fail and will lurch from crisis to crisis unless it is broken up, according to the former governor of the Bank of England.
In his new book, Lord King claims that steps towards fiscal union will not quell tensions in the 19-nation bloc and could even tear it apart. 
He warns of a looming “economic [and] political crisis” triggered by endless bail-outs, austerity demands and pressure from the “elites in Europe” and the US to create “a transfer union” to solve the eurozone’s woes. 

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