The chart below may be too complicated to fathom, but it’s a glimpse inside the mind of a central planner, or a government. Friedrich Hayek would have had a field day with this kind of chart as he had written on numerous times about the dangers of central planning, and how the economy is too complex for the state to handle.
This chart shows Chinese officials trying to regulate their stock market since 2014. The People’s Bank of China (PBOC) and Beijing imposed this strategy to circumvent a full-blown financial collapse. Well, it isn’t working, as many suspect would happen.
No wonder why people in China don’t trust the stock market; because it’s manipulated by the state.
Here is the chart from RBS Macro Credit Research:
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