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The next 1929 Crash nobody is talking about... (And the Canadian middle-class)

Anything related to investing, including crypto

Think China is due for a severe correction?


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joncrx

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Wow, with all the media watching Greece, didn't even know this happened:

China markets dropped 30%

http://www.telegraph.co.uk/finance/...-crisis-is-happening-in-China-not-Greece.html

And when you look at the amount of propaganda and government intervention trying to hide what's truly going on in the China markets, they may be on the precipice of a Japan-esqe correction in currency, etc.

What do you all think?
 
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MJ DeMarco

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Think China is due for a severe correction?

Due? They're in the middle of one. Probably has another 20% left. The rise and irrational exuberance reminded me of the dot com era. When the farmer is neglecting his fields to trade on his iPad, you know trouble's ahead.
 

joncrx

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Love the farmer analogy MJ...

I'm just surprised that there wasn't a lot more coverage of it...
 

MKHB

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Bring it on, maybe cause a little RE crash here is the states....

I could pick up that little place in the desert up against the mountains in Sedona...Indian Wells??? Or a little beach bungalow in
Hermosa Beach...mmmm

Or it could have the reverse effect:

An increased "flight to quality" push by Chinese investors into not only gateway cities, but now into previously shunned secondary and tertiary markets as well.

In other words, don't sell that crappy strip mall you bought in Bullhead just yet, the Chinese are coming and their bringing cash.
 
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iAmTrade

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I don't know how many people know this-

But we do understand that the Chinese Government is playing with the currency exchange rates for their country right? They are the largest manufacturer, in the WORLD, as a country. Doesn't that mean the demand for their Yuan will go up? Because need Yuan's in order to buy their goods? Yes...demand increases prices (in this cases Yuan's value)...but why doesn't it go up? Because China is manipulating it. Ok...so what, I still want my cheap items...

So what?!!!? You have a country that produces everything (not literally but you get my point)...all the government has to do is not manipulate it for 5 trading days and their currency value would be double that of the USD.

China markets dropped... that is bad for us because? I see an opportunity. Now they are even more willing to sell their goods and perhaps at a discount. Choose to invest in companies you think they would not be able to live without...as it seems 30% cheaper in stocks, of a company that is "too important to fail" is GREAT since its bound to go up again soon enough no?
 

Jesse Dallenbach

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China markets dropped... that is bad for us because? I see an opportunity. Now they are even more willing to sell their goods and perhaps at a discount. Choose to invest in companies you think they would not be able to live without...as it seems 30% cheaper in stocks, of a company that is "too important to fail"...

This is definetly possible iAmTrade. What companies and sectors, in your opinion, would meet this criteria and more importantly why?

Thanks in Advance!

- Jesse
 

obrian

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i think it's a bit over the top i mean china is going to be largest economy in the next decade or two to the rate at which they are growing maybe even sooner as well , they have the largest growing middle class.what's happening now is just a little block in the way but nothing major from my standpoint maybe it's a little market manipulation to pull off some major economic move. i don't see china's economy slowing down any time soon and the media knows it but yet still they are throwing shit at the tv screens everyday and spreading propaganda and alot of persons really believe these news, but as i said though it's nothing major.
 
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xuyigang

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I am Chinese native of Shanghai, relatives all hold stocks. Very sad that sidewalking women save money by clipping coupons and save on utility, but very willing to spend in the Stock market when it is at 5,000 points, many I have known have seen 50% of their fund gone in the past two weeks or less.

Being the largest economy does not mean necessarily economic strength, China's GDP was very high before the British invasion, most of the GDP is tea, chinaware and silk, and as of right now, our GDP is heavy in luxury goods, but not in technology, military and other important aspect.
 

tafy

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Theres a few thoughts here:

China the Country: China is the most forward thinking Country I have ever seen, from high speed trains to massive infrastructure projects. They have a 25 year plan that will kick the shit out of the west as we have short term givaways to get politicians in power.

The People: As with most people new to money, and people get caught up with the crowd and the hysteria, the Chinese are going crazy on stocks, RE and anything that they think will make them rich without working, these things will crash, correct and resume the natural trend as always.

Overall: China is the next superpower, once they build some military muscle to stop America from bullying they will share the superpower status with America. The west has hoped China would crash and burn the last ten years but it's not going to happen. They are securing oil and food assets around the world. They own most of the manufacturing capacity. Once they decide to use their power (which they havent yet) the world will shake.
 

hellolin

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I am in China as of now on my vacation, a native of Los Angeles, but let me tell anyone here that has not lived in China, please be careful when you look at the stock market here, they are in fact, works completely different than the regular stock market we got in the US. They do not represent the actual value of the companies whatsoever and they are literally set off as an alternative to gambling in China since Casinos are forbidden and Chinese people absolutely loves to gamble. If you think I am making this stuff up please ask any sensible people in China...
 
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iAmTrade

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China markets dropped... that is bad for us because? I see an opportunity. Now they are even more willing to sell their goods and perhaps at a discount. Choose to invest in companies you think they would not be able to live without...as it seems 30% cheaper in stocks, of a company that is "too important to fail"...

This is definitely possible iAmTrade. What companies and sectors, in your opinion, would meet this criteria and more importantly why?

Thanks in Advance!

- Jesse

Look up Maslow's Hierarchy of Needs..

All people need, food, shelter...etc...

When the world goes bust, and the USD is not the reserve currency, nor is any paper currency (Which I suspect will happen in my life time ...I'm only 24, won't explain why in this thread, feel free to ask or open a thread and call me to it though :) there are things worth A LOT MORE than any currency...Food. Shelter. And what comes with those...farms, fruit farms, wheat farms, cow farms, all farms, homes, apartment buildings, sheds for the poor, water* it is a NECESSITY...clothing, cheap clothes, underwear, socks, shoes...cheaper transportation- buses, trains, bikes* even taxi's.

Look into power suppliers, electrical companies, solar companies, solar farm companies, electrical component manufacturers,, ISP's, miners of rock salt, salt, copper, aluminum, wheat/bread...I can go on and on. Just some ideas.

Think for a moment of what a person MUST HAVE to SURVIVE. And look at a company that provides it.

That company will grow/thrive- that I guarantee, as long as the management is competent.

Those are the basics to it. And yes, RE, investing, loanable investments etc......WHAT does the Millionaire Fastlane Book say?... Stocks do not create value. Heck, THAT IS WHY they will ALWAYS crash one way or another, because they are not worth zilch unless someone thinks its worth zilch.

:) Good day.
 

The-J

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China is still growing and its real growth isn't due to stop any time soon.

This correction is due to the fixing of some poor practices in the Chinese markets (using stock as collateral for loans, extremely speculative valuation, among others). Beijing is making some pretty drastic changes.

Keep watching it, but it's not 1929. Not even close.
 

Ninjakid

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China's not going through the depression. The vast majority of Chinese citizens are still in poverty, despite the new wealth made by a very small but influential class. Conditions for people will never be as bad as they were under Mao, so people will keep building and expanding businesses, taking money from the rest of the world, and stimulating their economy.

All that's happened is a crowd of enthusiastic business owners have let their greed get the best of them, and were blissfully ignorant because of their stock price. There's gonna more Ferraris and Rolls Royces left in their showrooms, but China as a whole hasn't lost their grip on the world economy.
 
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daivey

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Wow, with all the media watching Greece, didn't even know this happened:

China markets dropped 30%

http://www.telegraph.co.uk/finance/...-crisis-is-happening-in-China-not-Greece.html

And when you look at the amount of propaganda and government intervention trying to hide what's truly going on in the China markets, they may be on the precipice of a Japan-esqe correction in currency, etc.

What do you all think?

yeah, it's down.. big deal.. if you bought at the beginning of the year you are still up big time.. so it's a blip.
 

daivey

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I am in China as of now on my vacation, a native of Los Angeles, but let me tell anyone here that has not lived in China, please be careful when you look at the stock market here, they are in fact, works completely different than the regular stock market we got in the US. They do not represent the actual value of the companies whatsoever and they are literally set off as an alternative to gambling in China since Casinos are forbidden and Chinese people absolutely loves to gamble. If you think I am making this stuff up please ask any sensible people in China...

exactly. china is the wild west of investing.
 

loop101

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Due? They're in the middle of one. Probably has another 20% left. The rise and irrational exuberance reminded me of the dot com era. When the farmer is neglecting his fields to trade on his iPad, you know trouble's ahead.

My uncle had a farm that fell short of reaching a paved road by 18 acres, and his neighbor farmer would never sell him the 18 acres. The neighbor died and his son inherited his farm. The son let the 6000 acre farm turn to crap, while he stayed inside all day. My uncle asked him what he was doing with all his time, and the son said "Day trading". Ten months later, the son came by and sold the 18 acres to my uncle at a deep discount, for cash. He sold it for less than the timber on the land was worth, which was strange. A few days later, the sheriff came by looking for the son. He had lost all his money day-trading, and had then started growing weed in his barns. He had taken the money from the 18 acres, and fled the country. The son had reduced his wealth by like 99% in less than a year, lol.

Ironically, the son could have sold a 50-year lease of the farm to a paper company, kept a few acres for his house, and never had to work again. (it takes 50 years to plant and grow a generation of trees, slowlane at its finest).
 
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obrian

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My uncle had a farm that the fell short of reaching a paved road by 18 acres, and his neighbor farmer would never sell him the 18 acres. The neighbor died and his son inherited his farm. The son let the 6000 acre farm turn to crap, while he stayed inside all day. My uncle asked him what he was doing with all his time, and the son said "Day trading". Ten months later, the son came by and sold the 18 acres to my uncle at a deep discount, for cash. He sold it for less than the timber on the land was worth, which was strange. A few days later, the sheriff came buy looking for the son. He had lost all his money day-trading, and had then started growing weed in his barns. He had taken the money from the 18 acres, and fled the country. The son had reduced his wealth by like 99% in less than a year, lol.

Ironically, the son could have sold a 50-year lease of the farm to a paper company, kept a few acres for his house, and never had to work again.
lol interesting story.
 

webcomber

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The Chinese manipulate markets and currencies, but they have nothing on the U.S. All markets in the U.S. are manipulated, from zero interest rates, the most important price signal in capitalism, to "the plunge protection team" that keeps markets from falling, manipulations in commodities, silver, gold, and currency to protect the dollar's world reserve currency status, insider trading, and price manipulation across the board. As soon as interest rates rise, the house of cards will be exposed for what it is. When the market finally has its way, it will make 2008 look like a spring shower.
 
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obrian

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The Chinese manipulate markets and currencies, but they have nothing on the U.S. All markets in the U.S. are manipulated, from zero interest rates, the most important price signal in capitalism, to "the plunge protection team" that keeps markets from falling, manipulations in commodities, silver, gold, and currency to protect the dollar's world reserve currency status, insider trading, and price manipulation across the board. As soon as interest rates rise, the house of cards will be exposed for what it is. When the market finally has its way, it will make 2008 look like a spring shower.
i agree with you 100% ,the currency market manipulation is affecting the third world countries worldwide because due to the exchange rate 1 us dollar would be equal to $150 - $500 in some countries and that makes importing goods from first world countries a problem. i respect the US but i feel like their is a volcano waiting to erupt again which has been dormant since 1929.
 
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daivey

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DeletedUser394

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LOL

the only wealth in CAnada is in "home equity" from highly over valued homes.

cash poor, equity rich.

Reading comprehension fail?

'The most common figure used by researchers and economics professors when comparing middle class economies across different countries is median annual income, standardized to U.S. dollars.'

This has essentially nothing to do with home equity.
 

daivey

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Reading comprehension fail?

'The most common figure used by researchers and economics professors when comparing middle class economies across different countries is median annual income, standardized to U.S. dollars.'

This has essentially nothing to do with home equity.


In the first paragraph they say $15,000 was median in US vs $14,000 in Canada in 1980.

no where else in the article does it go over median income.. which is funny.... since you are using this for the basis of your argument.

lastly, wealth isn't measured by income..

Also, before you call people out for "reading comprehension fail" my POST talked about WEALTH. CASH POOR EQUITY RICH.

Which is truth in Canada.

One more thing... even if our median income is high, our purchasing power is weak. What a shitty link to a sub par article with no sources.
 

Ninjakid

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daivey

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@daivey

http://www.theglobeandmail.com/repo...orlds-richest-study-suggests/article18090490/

“Middle-class incomes in Canada – substantially behind in 2000 – now appear to be higher than in the United States,”

When you're middle class and still can own a million-dollar house like some people do in Canada, I think it speaks for itself.

That's what you don't understand.

The middle class that own million dollar homes in Toronto and Vancouver, bought those homes years ago - which have now sky rocketed.. The wealth the middle class has in Toronto and Vancouver (lets face it the only cities that matter in Canada) is all in house hold equity.

And, lastly, even if income is higher, the purchasing power is MUCH MUCH lower.. Someone making the same amount in the US versus someone in CAnada - the person in the US had WAY more purchasing power.

So we MAKE MORE because we HAVE TO, to survive.

How can you associate that with Richness??? You can't.

Far from being richer than anyone.
 
D

DeletedUser394

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In the first paragraph they say $15,000 was median in US vs $14,000 in Canada in 1980.

no where else in the article does it go over median income.. which is funny.... since you are using this for the basis of your argument.

lastly, wealth isn't measured by income..

Also, before you call people out for "reading comprehension fail" my POST talked about WEALTH. CASH POOR EQUITY RICH.

Which is truth in Canada.

One more thing... even if our median income is high, our purchasing power is weak. What a shitty link to a sub par article with no sources.

huh?

Investopedia is one of the most respected websites on financial matters on the internet.

Also, econ 101: There are two ways to measure wealth (whether you like it or not). These are facts and are not subjective.

1. Income
2. Net Worth


And I don't disagree that the housing market is beyond overvalued. I'm just calling out people that post factually incorrect statements. (ie the original person I responded to, not you).

China does not have 'the wealthiest middle class', regardless of which of the two criterion that one chooses to use. That is factually incorrect on every level. But people love to propagate inaccurate information.

Anyway, if we want to use your preferred criteria (networth), https://en.wikipedia.org/wiki/National_wealth Or you could do nominal GDP per capita. That's the best we can do with regards to measuring net worth.

That's why income is a lot easier and more widely used measurement.

China is not at the top, eh? So he was wrong again :)

Ps: 3 separate paragraphs mention income in the article that I link to.. I'm done. Going back to stacking money. have a nice day.
 
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Ninjakid

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The middle class that own million dollar homes in Toronto and Vancouver, bought those homes years ago - which have now sky rocketed.. The wealth the middle class has in Toronto and Vancouver (lets face it the only cities that matter in Canada) is all in house hold equity.
So... it still counts as your net worth?
And, lastly, even if income is higher, the purchasing power is MUCH MUCH lower.. Someone making the same amount in the US versus someone in CAnada - the person in the US had WAY more purchasing power.
I don't see why this matters. What you're talking about is the result of inflation.

Anyways, I don't feel like arguing over this. I'm out.
 
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MJ DeMarco

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