The Chinese government is attempting to centrally plan its currency and inject enough stimulus to steady its slowing economy. And yet, the Shanghai Composite continues to plummet. China’s stock market is officially in crash mode, down 24% since its January high.
The billion dollar question investors should be asking themselves right now is: Can the Chinese inject enough stimulus to right the ship?
It’s a tall order. Hedgeye CEO Keith McCullough puts it simply: “They’re gonna need a bigger boat.”
In the clip above, McCullough pulls back the curtain on how central planners try to control markets and the unintended consequences it often has when central planning fails.
“When it stops working, like it has in China, it gets really dangerous,” McCullough explains.
Watch the full clip above for more.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.