Someone once said, “May you live in interesting times.”
I am inclined to think that the newly minted wealthy(?) in China are doing just that, having just lost their ass in the Shanghai Stock Market. Is this the trigger that kicks out the last supporting leg of the global economy? Since the real estate market in China is on a slide those who were looking to conserve their wealth were in the equities market since it is getting harder to move their funds offshore. The rapidly growing “middle class” wanting greater returns turned to stock investing and even leveraged their homes to play the game! POOF! All gone as some of the companies they bought shares in are now worth “Zilch, Zip, Nada!”
Now we wait for the “other shoe” to drop. I doubt the “Grexit” from the EU will cause it directly, but a confluence of conditions will eventually gel to create anxiety in enough investors to start to go to cash which will slow the engine of the economy(people buying stuff) which in turn will slow the exportation of goods that most countries rely on.
Private Equity (PE) funds such as Hedge funds, are gearing up for Buy Out opportunities to reap their profits before TSHTF. Many funds are investing in infrastructure projects in the Euro Zone, but even this strategy may drag out for many years beyond what their usual target dates are.
Being debt free as much as possible and wise investing will let you sleep more comfortably and if there is one thing I enjoy it is a comfortable bed!
May you always have the wind at your back and a “buck” in your pocket.
Until next time,