For the last month all eyes have been on the unfolding calamity in Greece during which its flirtation with an impending ‘Grexit’ — the exit of the nation from the EU — looks all the more possible.
But as dire as that eventuality would be for the European economy, a growing chorus of market analysts are pointing to the mayhem in China as the tipping point for what could presage a global financial crisis.
What has quickly become an eery similarity to the events that led up to the 1929 crash, China’s stock market dropped 30% in value in recent weeks after the economy experienced a radical boom of 100% growth in the last year.
On Monday Chinese officials extended massive safety measures to prevent such a crash including an interest rate cut to record low levels along with a freeze on new stock listings.
The Chinese market losses since nearly a month ago hover currently at the equivalent of a staggering three and a quarter trillion dollars. That pales in comparison the meager $237 billion GDP of Greece.
Signs that the events will likely have a huge impact on global markets was evidenced yesterday when the Dow dipped several hundred points and the NYSE was suspended due to a mysterious ‘technical glitch’.