China Stock Market Index :China Now World’s largest economy

China Stock Market Index

China Stock Market Index: China Now World’s Largest Economy

In September of 2014, when we put out the following chart, we stated that the US was on the verge of losing its top-dog status. The picture below is worth a 1000 words and shows how every major empire lost its way.  What the chart does not reveal is that in all cases stupidity coupled with a major dose of arrogance was the main reason these nations fell.

China overtakes U.S. now world's largest economy
As you can see from the above chart, we have two new trends in play. A strong uptrend for China and a strong downtrend for the USA; the trend cannot be changed so the outcome is inevitable.

The IMF just released the latest figures for the world economy. Before we go any further we would like you to keep in mind that in 2000, the US produced nearly three times as much as the Chinese.  So in roughly 14 years, the Chinese turned the table on the U.S. China will produce 17.6 trillion this year compared to 17.4 trillion for the US. Hence, it’s official the U.S has been knocked off its perch and it’s all downhill from here for the U.S.

Things to keep in Mind

Whenever a nation is about to be displaced from its top-dog position, it seems to become more aggressive instead of trying to form new bridges. Instead of learning from history, it seems that we are doomed to repeat it, but this does not mean you have to lose money in the process.  Disaster is nothing but opportunity saying hello in disguise.  This chart indicates that the petrodollar is very close to being displaced and once it is, the precious metals sector will soar to the moon.

This chart also illustrates why China is becoming more vociferous and rebellious towards the USA. They understand the fact that they are destined to be the new top dog, but at the same time they are also building bridges with top energy producers such as Russia, Venezuela, Iran, etc, etc, The most important bridge they are building is with Russia which is not only an energy powerhouse but it is also one of the top arms producers in the world.

What we find interesting is the fact that mainstream media is not covering the fact that both China and Russia are aggressively putting into place procedures to get rid of the dollar.  This shows you how controlled the USA press really is. Freedom of speech, yeah right; more like freedom to misinform as you please. Now you understand why Ukraine is being used as a guinea pig.


China has overtaken the US, to reclaim a position it has held before and it will most likely hold onto this position for a very long time.  For the U.S, the trend is downhill, and it best it can hope that India or some other nation does not knock it even lower down the rung.

Some other interesting pieces of information;

China has a savings rate of close to 50%, which is almost 10 times that of the U.S personal savings rate.

China surpassed the U.S as the World’s largest exporter long ago.

In terms of manufacturing, they buried us years ago too, so this move was all about assured.

Long term China makes for a great long term investment and all strong pullbacks should be viewed as  buying opportunities

China Stock Market Index Aug 2019  Update

FXI iShares China Large-Cap ETF daily Stock Chart

The Chinese  Stock Market Index traded to new lows and in addition, they put in a lower high. Lower highs are generally associated with weakness and signal lower prices in the near term.  In this instance, the Chinese Stock Market Index could be sensing that the trade war is going to escalate instead of the two nations finding consensus.

So far China is losing the trade war fight and the way one call tell this is true is by looking at the stock market.  The Dow is almost trading 50% higher since Trump took office, while the Shanghai composite is now in negative territory.  If  39  is breached on a monthly basis (above chart), then FXI and by default, the Shanghai composite index will be on course to put in a series of new low

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