http://www.forexconspiracyreport.com/yuan-and-panic-of-chinese-mom-and-pop-investors/ Yuan and Panic of Chinese Mom and Pop Investors The Chinese stock market has taken another plunge of 7% until authorities used a circuit breaker mechanism and stopped trading. Chinese mom and pop investors want out of the stock market and every time trading resumes sell orders flood the market again. From the Forex point of view our interest is in the Yuan and panic of Chinese mom and pop investors. The New York Times writes about how the second big Chinese stock plunge of the year has effects around the globe. Chinese stocks plunged on Thursday, by more than 7 percent, forcing officials for the second time this week to halt trading for the day – in this case, after just 29 minutes. The big question now is how much of the turmoil might eventually prove to have more to do with the internal dynamics of the Chinese market, where the first wave of sell-offs began last summer, or how much is based on broader economic fundamentals that will have a further impact on global growth. The Chinese economy is slowing from its previous 10% per year per year growth and every time another economic report shows this to be happening investors want out of the market, all at once! To start the year a manufacturing report showing another month of contraction started the selling binge. At the heart of this issue is the value of the yuan versus other currencies. The Chinese currency is overpriced and will fall in value as the market is allowed to take its course. In response many Chinese investors are converting their yuan to dollars, euros, yen or British pounds and investing offshore. The flight of capital out of China worsens the country’s economic contraction causing more panic in the markets and more money sent offshore in a recurring feedback loop. We asked the question in our most recent article if yuan losses will accelerate.

1. By www.ForexConspiracyReport.com

2. The Chinese stock market has
taken another plunge of 7% until
authorities used a circuit breaker
mechanism and stopped trading.

3. Chinese mom and pop investors
want out of the stock market and
every time trading resumes sell
orders flood the market again.

4. Before We Continue…
Click the links below to get your
FREE training materials.
Free Weekly Investing Webinars
Don’t miss these free training events!
http://www.profitableinvestingtips.com/free-webinar
Forex Conspiracy Report
Read every word of this report!
http://www.forexconspiracyreport.com
Get 12 Free Japanese Candlestick Videos
Includes training for all 12 major candlestick signals.
http://www.candlestickforums.com

5. From the Forex point of view our
interest is in the Yuan and panic
of Chinese mom and pop
investors.

6. The New York Times writes about
how the second big Chinese stock
plunge of the year has effects
around the globe.

7. Chinese stocks plunged on
Thursday, by more than 7 percent,
forcing officials for the second
time this week to halt trading for
the day – in this case, after just 29
minutes.

8. The big question now is how
much of the turmoil might
eventually prove to have more to
do with the internal dynamics of
the Chinese market, where the
first wave of sell-offs began last
summer

9. Or how much is based on broader
economic fundamentals that will
have a further impact on global
growth.

10. The Chinese economy is slowing
from its previous 10% per year per
year growth and every time
another economic report shows
this to be happening investors
want out of the market, all at
once!

11. To start the year a manufacturing
report showing another month of
contraction started the selling
binge.

12. At the heart of this issue is the
value of the yuan versus other
currencies.

13. The Chinese currency is
overpriced and will fall in value as
the market is allowed to take its
course.

14. In response many Chinese
investors are converting their yuan
to dollars, euros, yen or British
pounds and investing offshore.

15. The flight of capital out of China
worsens the country’s economic
contraction causing more panic in
the markets and more money sent
offshore in a recurring feedback
loop.

16. We asked the question in our most
recent article if yuan losses will
accelerate.

17. The yuan will need to fall a lot
more in order for the currency to
match a true market value.

18. The speed at which this happens
will largely depend on how fast
those in charge let it drop.

19. As yuan losses accelerate Forex
traders will anticipate an
increasingly weak currency until at
some point the yuan will
overshoot and then correct.

20. The Chinese economy is the main
driver in this situation.

21. Again, the timing of the yuan’s fall
will likely be controlled by Chinese
authorities who will limit trading
whenever it is ready to spin out of
control.

22. And Chinese authorities are
increasingly worried about the
steady shrinkage of their economy
with its political and social
consequence.

23. In short, the Chinese accept the
dictatorial rule of the Communist
Party because the economy has
been growing.

24. When the economy collapses all
bets may be off.

25. The Spillover into the West

26. The world is interconnected as
never before and when mom and
pop investors panic in China
markets react across Asia, Europe
and North America.

27. As Reuters reports Wall Street
opens sharply lower on news of
the rout of Chinese stocks.

28. U.S. stocks opened sharply lower
for the second straight day on
Thursday after China allowed the
yuan to decline further and oil
prices slumped to near 12-year
lows, raising concerns over the
state of the global economy.

29. A weakened U.S. economy would
lead to a weaker U.S. dollar and
take some of the pressure off the
yuan.

30. But China has a serious set of
problems that have not been
addressed over the years.

31. The cause and effect circle of poor
economic news, panic of mom and
pop Chinese investors, flight of
capital, and weaker yuan and
worse economic news is likely to
continue into the coming year.