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The really worrying financial crisis is happening in China, not Greece

China looks like it is heading for its version of the 1929 stock market crash

by Jeremy Warner | TELEGRAPH.CO.UK | July 8, 2015

While all Western eyes remain firmly focused on Greece, a potentially much more significant financial crisis is developing on the other side of world. In some quarters, it’s already being called China’s 1929 – the year of the most infamous stock market crash in history and the start of the economic catastrophe of the Great Depression.

In any normal summer, a 30pc fall in the Chinese stock market – a loss of value roughly equivalent to the UK’s entire economic output last year – after an ascent which had seen share prices more than double within the space of a year would have been front page news across the globe.

The dramatic series of government interventions to stem the panic – hitherto unsuccessful, it should be added – would similarly have been up there at the top of the news agenda. Yet the pantomime of the Greek debt talks, together with the tragi-comedy of will they, won’t they leave the euro, has relegated the story to little more than a footnote – even though 940 companies, more than a third, have now suspended trading on China’s two main indices.

The parallels with 1929 are, on the face of it, uncanny. After more than a decade of frantic growth, extraordinary wealth creation and excess, both economies – America in 1929 and China today – are at roughly similar stages of economic development. Both these booms, moreover, are in part explained by extremely rapid credit growth. Indeed, China’s credit boom dwarfs that of even the “roaring Twenties”. Borrowed money, or margin investing, played a major role in both these outbreaks of speculative excess.

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About Sam Chaney

Sam Chaney holds a Bachelor of Science in Accounting and Bachelor of Arts in Economics from California State University, Fresno. He worked in the healthcare industry for 5 years as a financial analyst. Sam began his broadcast career on public access television at the Fresno Community Access Media Collaborative in October of 2012 with We Are Change Fresno TV. His shows include interviews with voices you will not hear on the mainstream corporate controlled media. He also broadcasts Weaponized News a talk radio show on 1680AM in Fresno, California with his partner Stuart Webb. Tune in Saturday night's from 6-8PM on 1680AM. He is an owner of the alternative news website WeaponizedNews.Com.

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