Yuan devaluation and worldwide deflation coming.
Japan let loose its yen QE on the world, oil and gas crashed, and the U.S. dollar spiked putting deflationary pressure on the emerging markets, all mentioned in my post, Financial Tidal Waves.
Now it is becoming obvious that there is nothing but vapor supporting the Chinese stock market. The $3 trillion or so that has been destroyed in the last month or so by this market has to be classified as the next financial tidal wave.
Capitalist Exploits explains that the Chinese yuan will be devalued. Can You Hear the Fat Lady Singing? – Part II: The China Connection
Russell Napier explains that deflation will result. Russell Napier: What Happens When Markets Realize China Is A Forced Seller Of Treasuries
It seems to me that prices will drop and manufacturers will get squeezed out. Then when inventory runs out shortages and rapid prices rises will occur but without an economic recovery.