The global markets just reacted to another 7% plunge in Chinese markets – the biggest bubble of our time.
Go on the Internet and look up any article about China’s economy. Nine times out of 10 they’ll acknowledge the problems in overbuilding, real estate vacancies, rising debt and everything else.
But they always take the position that China will be able to have a soft landing. Through government guidance, they’ll be able to transition to a consumer-driven economy like the U.S. instead of a government-driven infrastructure and exporting one.
Meanwhile, very few analysts in the financial media think that stocks are in a bubble, when this rally since early 2009 looks exactly like every bubble in history.
And that’s the problem – when it comes to predicting the future, humans are invariably almost always wrong.