The China stock market has plunged into a tailspin. After rising an extraordinary +150% over the past year, the Shanghai Stock Exchange Composite Index has fallen by nearly just as notable -30% in the past three weeks. Despite the fact that China stocks are still +80% higher than they were just one short year ago, the recent sharp plunge has compelled Chinese policy makers to fire all of their stimulus and liquidity guns in a frantic attempt to stem the decline. How the recent market chaos in China ultimately plays out remains to be seen, but the response by Chinese policy makers in recent weeks raises and worthwhile question. What would U.S. Federal Reserve Chair Janet Yellen do if the S&P 500 Index was falling by -30% in similarly short order?
Please click on the link to read more of my post on Zero Hedge.