The Chinese stock market is crashing and has sent world stocks tumbling to their worst first week of the year in many decades…but why? It seems like it is out of the blue but it is not.
In in the aftermath of the global financial crisis China added $15 trillion in stimulus finance compared to Americas roughly $3 trillion in QE. This went into many unwise and unproductive projects, such as the famous ghost cities.
thiat mal-investment is now unwinding as the economy slows and bad loans surface to be dealt with. The link below takes you to a very insightful article from Zero Hedge on exactly what is happening in China. It makes for sobering reading.