US stocks set to follow the Chinese crash says Jim Cramer

Posted on 28 July 2015 with 2 comments from readers

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Mad Money presenter and hedge fund manager Jim Cramer knows that no one wants to hear this, but the US markets are going to follow China down.

Some say that Cramer’s theory is completely ridiculous; they think that the U.S. has nothing to do with China. They believe that US markets are not linked because when the Shanghai Stock Exchange Composite Index nearly doubled from November to June, the US market did not double along with it. But that’s not true.

China crisis

First, there is a huge number of large American companies that export to China. Second, because it is now widely known that the Chinese communist government is not as shrewd or masterful as once thought. And third, because the US market is always held hostage by futures trading, which tends to be a reaction to whatever bad is happening overseas.

America has far established itself as the biggest superpower of the modern world and authoritatively interferes in the civil and political issues of countries under crisis. Colonialism had ended much before, but the US has often been called as ‘world police’ because of being omnipresent in all the global issues. If it is the rising tension between the North and South Korea or the hostage camps in the African and Middle-East countries scorching under civil war and extremism, the US is always in the commanding position. For a business involved in creating Bitcoin Loophole review, any drop in the popularity of bitcoins will definitely have a say in its business.

When the level of involvement is like this, it is imperative that any change in the atmosphere of these countries will send waves strong enough to cause some kind of ramification in the US economy.  It may be manifested in the form of decreased exports, reduced oil supply and hence volatility in oil price, manufacturing bottlenecks, self-sided financial policies, weak defense ties and allied relationships etc and China being the largest rising economy and the most populous country, US is bound to get the Chinese rays.

And it’s not like China was doing well in the first place. All of the indicators of economic growth are trending lower. The only shred of hope that Cramer sees is that the Baltic Freight Index still holds up, but that’s it…


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Posted on 28 July 2015Categories: Banking & Finance, Bond Markets, Global Economics, Hedge Funds, Investment Gurus, Investment Management, Personal Finance, Sovereign Wealth Funds, US Stocks, Video Channel