Lessons for 2016: China Can Destroy the World

Saturday, January 9, 2016
By Paul Martin

SputnikNews.com
09.01.2016

China’s stock market collapse and imposition of currency controls threaten to further destabilize the world markets, as analysts predict an end to China’s perpetual growth.

The market collapse over the first week of 2016 showed that China’s roughly 10 percent collapse in the Shanghai Composite Index can reverberate around the world.

The collapse in China ended after the country suspended its trading system “circuit breaker” and its central bank stopped cutting the yuan’s reference rate. The decline did continue in the United States, despite what should be considered a positive jobs report, resulting in a 6.19 percent drop for the Dow Jones Industrial Average. The United Kingdom’s FTSE 100 index also fell by 5.28 percent.

While US markets’ continuing collapse has been tied to the dollar rate and Fed worries, the collapse has been largely linked to China, which initially saw a collapse after the implementation of the circuit breaker, which halted trading following significant collapses, but was then repealed.

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