by Charles Hugh Smith
Of Two Minds
When the stampede tumbles off the cliff, buyers vanish and markets go bidless.
The shock wave unleashed in China on January 23 is about to hit the U.S. economy and shatter everything that is fragile and fantasy, starting with the U.S. stock market. The shock wave is still reverberating through the vulnerable Chinese economy, toppling all that is fragile: auto sales, sales of empty flats in Ghost Cities, shadow banking loans that cannot be paid, workers’ wages that won’t be paid, businesses that won’t re-open, supply chains dependent on marginal enterprises and most saliently, the faith of the people in their hubris-soaked, self-serving leadership.
The fantasy in the U.S. is that the shock wave doesn’t exist. Since the shock wave has been hurtling with undimmed force toward the shores of all-mighty American complacency beneath the Pacific, unseen, America’s laughable fantasy has spread through the thundering stampede triggered by the fools in the Federal Reserve in early October.