Chinese Boomtown: A Report from Big, Bustling Beijing

Posted by Bill Bonner - The Daily Reckoning

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Yes, dear reader…prices are falling. In April, the US producer price index fell 0.1%.

Oil fell to $72 yesterday. The Dow fell 114 points.

Copper is down more than 20% from its high. Chinese stocks are down 21% so far this year.

The CRB – a measure of commodities prices – is down about 12%.

Even gold got whacked yesterday – down $13.

What’s going on?

Well, we’re in that long period of adjustment known (to us!) as the Great Correction.

In the first stage…

…the markets discover that its assets aren’t worth as much as investors had thought….

…creditors find that their credits aren’t as good as they had believed…

…consumers realize that they don’t have as much money to spend as they had hoped…

…businesses find that they don’t have as many sales as they had projected…

…and governments wake up to the fact that tax revenues are coming in at less than expected levels.

… more HERE