Agreed - the bigger the bull, the bigger the bear. Removing all...

Agreed - the bigger the bull, the bigger the bear. Removing all the economic labels, asset price cycles have been around for centuries in virtually every society.

That what China is attempting has not been done before does not mean it cannot be done, just not to the same unsustainable scales of compounding grrowth. To support growth in credit based currency systems requires the support of the currency. The capitalism model requires increasing prices, since it is only increasing numbers that produces positive relative gains in a traditional sense.

Being predisposed to competition for +ve gains is a currency trap.

If China grew their gold reserves in similar fashion to the US from 1910 to 1940 and were over-reserved, I can guarantee this would not be a conversation. There would then be no doubting China's (or anyone elses) capacity to outlive any depression in global activity however long the duration. This is precisely what the US, Germany, France did in the modern era (post 1900, so far so good). This is merely a period of depressed activity that has everyone better educated, interconnected and far more aware of real time events.

In spite of the reserves, the US still suffered repetitive depressions equal in magnitude to the 2008 drop.

We are all now wired into this thing called globalisation 24/7. Yet the battle for economic supremacy drives certain societies perpetually. Shorting now means massive sums can be made from falling prices - so it is either support the bull or feed the bears.

This should not be turned into a cultural war is my underlying message. There is plenty I dislike about American self-righteous hypocritical egotism, but I can still tolerate their preferences for ignorance and corruption.

The rest of the world has learned to work with the US culture of corruption and corporate anarchy, it is about time they reciprocated to the rest of the world.

Which is where the true test of the strength of China and the integrity of her culture is yet to be properly stressed by modern capitalism. The US is giving it every shot. The zen of the pre-capitalism Chinese culture should be able to handle it with consumate ease - long live confucious!! The more they westernise, the more anarchistic will be the change.

I agree if it disintegrates, it will be spectacular. But I don't share the certainty. They have to fly the colours until they are torn apart from within.

To suggest 1.3Billion people of deep religious and cultural beliefs would/should adapt to another system of governance and abandon hundreds/thousands of years of heritage in the space of 1 generation is a bit optimistic.