Saturday, May 26, 2007
Direct economic impact of a fall in Chinese share prices maybe modest
The Economist: The great wall of money
China's economy may be less vulnerable to a bursting of the stockmarket bubble than it appears
Posted by sold 2 rent 1 @ 01:31 PM (177 views) Add Comment
1 Comment
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1. sold 2 rent 1 said...
Whilst The Economist may be correct on this matter at the end of May, how will China cope if the bubble keeps rising at this parabolic rate?
We know bubbles keep inflating for much longer than expected. We know the final phase of the bubble is the most extreme.
The number of new stock trading accounts increased by 50% in 1 month
Maybe next month they will increase by another 50%
And the month after that another 50%
By September we could see 1 million new accounts a day being opened. This would be 5 times the number in April.
I am not saying it will happen but the Chinese stock market has the capacity to double or even treble in the next 4 months.
It will only take another 50m to 60m new accounts to reach this dizzy level. This is less than 5% of the population