Did U Think The Ponzi Scheme Would Last?

China Punishes FXP Holders

1-2 more weeks and FXP will be a buy again for a nice run to 50 or 60. Anyone who thinks China is out of the woods yet is insane. FXP got pummelled by the Chinese gov't promising monster stimulus. In other words, this is just a gov't induced bear market rally, and we all know they can be fierce. But at some point very soon the gov't intervention news will be priced in and then people will again return to their senses about the 12-24 month dismal prognosis for China.

How much of their vaunted manufacturing machine will remain after the depression? People uprooted their whole lives in search of promised prosperity. They abandoned their family farms and moved to cities to work in factories but are now giving up face (losing face is a big deal in Chinese culture) and moving back out to their family farm where they will probably not easily retake their former position of authority (someone else will likely have filled the vacuum and will be resentful of the returnees). Given all this, how likely will the farmers be to run into the city for more factory jobs the next time the economy starts to boom? There will be mistrust after this debacle, that's for sure. The wages will have to be a lot higher next time around to attract labor and China will thus no longer be hypercompetitive as they were over the past 15 years relative to the rest of the world.