The world booms on with stock markets, gold and oil all sitting happily near their recent highs, looking pucker and ready to head on up. The Greek crisis smoulders on but is not enough by itself to spoil the show. A Euro holed below the water-line by a Greek default is hardly going to encourage lenders to lend at low rates of interest when the fear of sovereign default becomes more real. But until it happens, Greece has not succeeded in projecting real fear onto the investment agenda.
The situation seems to be holding out for a greater shock, more worthy of bringing an end to the greatest global asset price inflation in history. The testosterone-fueled bull charge wants to see some real financial carnage on a far greater scale before it is willing to hang up its boots.
The Greek crisis is, in any case, already old hat, and what’s Greece in any case? A mere 3% of the eurozone.
No, the hedge funds leveraging risks, making fast profits, want a crisis, that measures up in scale to the boom, which has sent asset prices spiralling ever on upwards since the year 2000, making all in the game into multi-millionaires.
These all-conquering markets and hedge fund heroes are not going to allow a mere bit of Greek chicanery to knock them back. Oh no.
But have no fear. A crisis on an altogether greater scale seems to be heading our way. The Greek crisis rocked the boat with a quake on the Richter Scale of 3, but it is now China that could be about to send a real tsunami wave spilling over the shoreline and smashing the over-exposed edifice of international finance, shocking the world.
Property prices in Shanghai last month fell 10%. That sounded like a 10% annual decline in reports, but it wasn’t. Prices actually fell 10% in a month.
A few China experts are beginning to worry as to what might be going to happen next. The government is desperately trying to reign in an unstoppable boom, with restrictions on lending, but with 60% of the Chinese economy now depending on construction, the effects of stopping the property boom will rapidly have knock-on effects economy-wide, and worldwide.