Gary Kaltbaum says China is the classic popping of a bubble! But…

For years, you have been told that the economic  numbers that were coming out of China were suspect.

For years, you have been told to go to youtube to look at China’s ghost cities! https://www.youtube.com/watch?v=wm7rOKT151Y

And then came the recent 100% gain in months. 1999 anyone?

We don’t pretend to know exactly how this plays out but when you force the one-way trade, when everyone is on one side because of the “greed” factor, when everyone is buying even though something was already up 10-fold in months…THAT’S YOUR BUBBLE AND TYPICALLY THE END OF YOUR BUBBLE.

BUT…we always have to put a BUT into the equation. We never used to have to but when we are dealing with central banks that have no shyness in just creating trillions more out of thin air, one never knows what will happen. Did one ever think that a dude named Bernanke, who missed the whole 08 debacle, said subprime lending was working and said the economy was sound…would be able to print $85 billion each month? Did one ever have the vision that we would have 0% rates for 7 years while the rest of the globe prints anywhere between $15-20 trillion depending on who you ask?

Unfortunately, expect more interference, not less. Expect more distortions, not less. Expect Yellen to not raise rates and if things get really hairy, the sounds of QE4.

As far as U.S. markets, we went to sleep last night thinking yesterday’s strong reversal could lead to some upside testing. Nothing doing just yet as “guess the gap” is to the downside this morning.  Yippeee!

And we haven’t even mentioned the nonsense out of Greece. We simply suspect another credit card to be issued to pay off the old credit cards…leaving them in the same position. Genius at work!