"what's happening? Is it the US or China market?"

I received a phone call from an old friend of mine today. We were fellow students from the same university and neighbours during our final year. It has been some time since we made contact and he called me up suddenly for a Chinese New Year wish. Lucky him because my mobile's battery was damaged the last few days and I have just bought a new battery today.

At the end of our conversation, I told him to be careful because the market is coming down with second dip. My prediction is that the second dip is worse than the first. The first thing he asked was, " what happened? Is it the US or the China market?" I ended up have to explain that I don't depend on US nor China market but by reading of chart.

Anyway, a thought on what he said, it seems like the importance of China has superceded Japan. People are more concern about the well being of China and its stock market movement creates significant influence to other market. In fact, many CNA forumers link the movement of STI partially on SSEC. This was unheard of during the 90s when I have my first taste of TA.

I still remember at that time, my teacher mentioned that by 2010, China will take over USA as the biggest economy of the world, and Japan will be drifting further down. For now, he is not far off. While China still seems to depend on US for its economy, its recovery is the fastest. USA on the other hand is still in the midst of struggling to climb up. Now if my earlier reading of Dow is right, US is heading for even bigger trouble and Obama's era might not last long. China would probably in a year time supercede even USA.

The other prediction that my teacher made was that the world would be entering a 5 years recession or depression. I was devastated in 1998 when I heard this, I got a feeling of the end of the world coming then. Doing a comparison now against what he predicted. Yes, recession did arrive. It came a year earlier than his prediction. Yes, we are not yet out of the recession, this is the second year and if it is a A-B-C-X-A-B-C wave, it may last around 4 years. Would such event be possible?

Just look at Japan, it was coming down since the 90s and still have not seen day light this year. It has been in a depression for 20 years. If that is possible, what's 4 years as compared to 20?

Since we touched on Japan, I kind of wonder, how could the Japanese still managed to survive in harmany after so many years of recession? Well, may be not. They did have a change of Government recently. But would such move help?

Looking back at what happened in the US during 1920s. US was in deep depression under President Hoover until the people voted him out. In his place was President Rosevelt. Rosevelt was charismatic, he gave people hope (I think he would be the Obama of his days). He tried in many ways to push the economy up, but in the end to no avail. What saved USA and the World from the recession eventually was World War II.

So will the new Japanese Prime Minister be able to pull Japan out of their great depression? He seems charismatic and him being elected into office gapped up Nikkei225. Other than that I do not seem to find him any better.

If the world is coming to a loooonnnnnggggg recession or depression, we might just study history and we will know eventually what would be the event that can help. It is ugly, cruel and inhuman, but it is a human act and unavoidable. The only hope that we can ask for is "let it not happened in our country" but in truth, who can escape if the World come to war again?

Mind you, I am against war, it is unnecessary a waste of human life and resources. But with limited resources and unlimited wants, there bound to be scarcity, thus formation of choice and opportunity cost. It is a necessay act to reset and recreate abundant. I still remember that I mentioned of this opinion to my Economics lecturer when I was in my JC 2(1985), he brushed it off as an incorrect view, looking back, I find my view to be not far off.

The question remains for the war would be "who should be the victor?"