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The Realism of China's Market Correction and the Global Effects

What goes up must come down. And China's main stock market - the Shanghai Index, more than doubled  in the 12-months up to mid-June, 2015, the BBC-News reported early this morning. 

Therefore, it should come as no surprise that the main stock market of the communists has been plunging over the past two weeks - reaching an-eight-year low last Friday, falling farther yesterday and again today, despite a multi-billion dollar cash infusion from the Beijing government and its cohorts to influence the 'invisible hands' of market forces.

Over valuation of Chinese stocks, the lack of public transparency, weak manufacturing numbers and simple fate are all contributing to falling stock prices in China. But a real concern to the West should become sparked once China's inevitable hiccups sharply effect and influence western markets to the point where Asian faltering, sends jitters through American markets -  lowering the main indices to four percent and reducing the average 401-K plan by $6,000 to $9,000.

Wall Street, which has banked on the all-power people-controlling Beijing government to whip and to maintain stability in China, has failed to diversify American exposure to adverse global markets in light of the many signals sent by Chinese markets. Moreover, Wall Street has failed to consider the up tick in arrogant rhetoric emitting from the Beijing government in recent months. Despite China's over consumption of many world products, it is still a non-democratic government, thus it remains prone to volatility.

Like the drinker that calls for "one-more for the road" and ends up having three before a calamity, like the gambler winning a wad of cash and insisting on one more spin before losing losing all  his winnings and his family's savings, Wall Street has remained in bed in communist China for far too long. 

Though this Chinese market correction is not a calamity to China since less than three percent of its population owns stocks and because the country still has a large stash of cash, it should serve as yet another alarm for Wall Street to hedge against future Asian market corrections with the premise in mind that as no company is too big not to fail, then no economy is too big not to fall.