Monday, August 17, 2009

China market in a correction now

Policymakers in China have recently put the breaks on rapid loan growth. (See chart below.)

This is resulting in a correction in stocks. The Chinese market has nearly doubled in the past 10 months and was due for a correction, however, this is not the end of the China boom, I want to stress that.

Chinese officials had become sensitive to criticism over loan growth and they have reacted by pulling back a bit. But make no mistake, China is now the global economic engine because the United States has essentially ceded that responsibility to the People's Republic.

America is still mired in recession so China's leaders will soon learn that they have no choice but to stimulate and spend more in order to keep that country's economy vibrant and growing and one that creates jobs.


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1 comment:

googleheim said...

my back stop got me out after getting in months ago on your cue.

now i'll just get right back in with the same procedure

great document, it is a worthy tool
once you get the back stop in place in case of shorting periods like today