The world’s stock markets are spiralling down. The US equity market has fallen 10% in the last month, a figure that is called a ‘correction’ in investor terminology. That’s not yet a crash or ‘bear market’, usually measured as a 20% fall. But it’s going that way.
Stock markets are diving because it seems that the big investors, banks and financial institutions globally, are worried that China is imploding and planning to devalue its currency hugely, thus driving down the rest of emerging economies, many of which are already in recession (Brazil, Russia, South Africa etc) and so will pull down the rest of world, the major advanced economies, into a global slump.
The economists of many investment banks, previously confident of economic recovery and lauding the great emerging market ‘miracle’, are now in a despond of despair. For example, analysts at the UK bank, the Royal Bank of Scotland…
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