So it looks like the PBoC's "unprecendented" moves to turn around the selloff in Chinese securities has failed miserably, and may have made the situation even worse. The Shanghai composite index closed another 6% down today, after losing a third of its value over the past few weeks.

Put another way: Chinese savers have had massive amounts of money wiped out. How much? Over 10* the size of the Greek economy. Or, coming up to $3 trillion.

No end to the bloodshed in sight, and it's now rippeling out to the Hong Kong market, as well as Chinese-linked shares in New York.

This has been a major blow to the credibility of the Chinese central bank, the People's Bank of China, as well as the Chinese politiburo in Beijing. They've gone as far as "banning" any negative talk about the markets on all Chinese media. Many major international players are now questioning whether any Government-backed asset is safe in China.

Combine this with a falling property market, and flat-lining growth, and this really could be the beginning of the end of the Chinese economic miracle.

Expect property prices in Hong Kong, Melbourne, Sydney, Vancouver, New York, San Francisco/San Jose, to continue rising dramatically in the next 12-15 months, while the Chinese 1% try to move as much out of their borders as possible.

USD will continue its surge this year, and US Treasury yields will also fall, thanks to this and the situation in the Eurozone.

I wonder if we will have a renewed Chinese "interest" in fighting for the Senkaku islands in order to redirect attention.

My girlfriend (who's Chinese, so is in touch with a lot of what's going on in the Chinese media) has said that they are blaming it on "American hedge funds and financial institutions", who are trying to take down the Chinese economy, telling the population to "sacrifice" their fortunes to help the country.

Of course, none of the big boys in the market are falling for this crap, so they're all still getting out. Meanwhile, there will be a lot of "novice" investors (primarily older people and those from agricultural districts) who will believe this line and will continue to, effectively, throw their money into a bottomless hole.

That would be sad.

Gold still going down though, maybe because of all of the wealth thats been destroyed? Heard over 3 trillion has been destroyed in the past month on the Chinese stock market.Price should hopefully shoot up again once the inevitable next round of QE starts.Don't think it'll be long now.

QE started last weekend, that's what I meant by "unprecedented" moves by PBoC. They are "creating liquidity" and straight up buying stocks with it.

The People’s Bank of China will inject capital into China Securities Finance Corp., which is owned by the securities regulator, according to the statement by the China Securities Regulatory Commission. The company will then use the funds to expand brokerages’ business of financing investors’ stock purchases.

so where were the doom prophecies when the Chinese stock were low to begin with?

Being "low" isn't an issue. Going up and then going down rapidly is an issue, because what it means, in essence, is that a lot of people have moved a lot of money into the market, and now they lose it all.

Well, if you look at graphs you can see the obvious bubble on a chinese market was starting to grow a year ago. Now it is busting, which is normal. The real questions here are:
1. How will it result on REAL economy. You know, producing smth, not making money out of the air.
2. Who's losing money. 3 trillions loss is too huge for old chinese people savings. It should be some international money involved as well.

No worries, China can always take territories away from their neighbors. They'll be fine xD