by John Galt
July 9, 2013 05:00 ET
Psst. Not every market in the world has Helicopter Ben to pump and dump bonds and equities on the American public, er, suckers.
What would one say if one of the largest economies in the world has experienced a 67% top to this week’s price decline in their primary stock market?
Nah, keep guessing after reviewing this chart:
From the start of the US economic crisis until July 5, 2013, which is now almost 49 points worse, the market above is down over 67%. The reaction on Wall Street?
That really is what the jerkwads are telling their retiree customers and advising them that the government has their back even though they did not in 2007-2009. Of course one of the world’s largest economies can handle a 67% stock market decline, right?
Not so much.
Sadly this decline has yet to test its 2009 lows as illustrated by this chart from Yahoo Finance:
If anyone thinks this is just one index, the CSI-300, the other widely tracked index from China is just as atrocious:
(chart from CountryEconomy.com)
What does this mean for us? Liquidity we are pumping into our system that is being used to keep our banks alive is no longer sufficient to keep Europe and Asia from declining into a corrective deflationary depression to remove speculative excesses. As long as the central banks in those regions continues to depend on the U.S. Dollar as the world reserve currency they will suffer from an economic contraction created by American financial irregularities that prevent their business cycles from operating independent of Federal Reserve policy decisions. When the Chinese Communists realize that Bernanke’s policies are his failing and no longer willing or able to protect their long term bond investments in the United States it will be game over for America also. Our equity charts will quickly duplicate theirs unless the Fed and Congress elect to coordinate a hyperinflationary policy destined to wipe out the viability of the US Dollar as the world reserve currency.
Welcome to Chinese Checkmate gang. Coming our shores in a brutal manner soon.