This is like a classic pyramid scheme in which more and more folks buy in. High expectations are met and more folks buy in. This pyramid comes crashing down when liquidity fails to keep things on track.
In much the same way as the coming implosion in the silver ETF market. China's false valuations like paper silver will one day have to be called. When that happens, the valuation of China's assets or in the case of silver ETFs, the actual silver will have to be handed over. Simply not possible.
China's markets are 50-100% over valued. Government sanctioned and propagandized. If the dollar regains strength, China's bubble will burst, the liquidity will vanish before your very eyes.
So, is that why China is now pouring billions into cold hard assets, including gold and silver as well as other exotic metals and hard assets and positioning itself to bail out on the dollar? Ruined dollar, the yen reigns supreme.
It is not difficult to comprehend when the Chinese property and stocks bubbles would burst. Strong Dollar, China's bubble bursts.
China is now experiencing a wild west of emergence and growth that is no different than what has happened in other emerging markets in previous years. A weak US dollar always leads to bubbles in emerging economies that are hot at the time. Strong dollar, bubbles burst!
Buyer beware.
