As a money manager since 1992, I can tell you personally that one of the things managers do, way before the U.S. markets open each day at 9:30 a.m, is to first look at the world financial markets. One of the first to be examined is the “Asian” markets and most specifically, Hong Kong, which opens 12 hours prior to the U.S. markets.

Hong Kong’s “capitalist” system, which has been going strong for over two decades now, has led many a U.S. market to boom. Although, of course, U.S. news affects U.S. financial markets, many money managers will also tell you that “Asian” markets, especially on a good day, normally bring prosperity to U.S. markets.

So yes, the U.S. stock market demand has very much, for the last two and half decades, followed the “Asian” markets. But that could all be about to change as of the date of writing!

China has been accused of many things in recent years, while its leaders say the world has been misinformed about what is happening inside the country.

They say, for example, that the 1997 law, which allowed China to regain control over Hong Kong, effectively ending the United Kingdom’s administration of the territory as a former British colony, created a “free market” system of government in Hong Kong over the prevailing “communist” system in the rest of mainland China.

Yes, this almost “two systems – one government” approach was China’s choice.

In the beginning, many did not think such a two-regime system could last, but after 23 years, as it progresses into its third decade, a whole new generation has become accustomed to the fact that this has just been, up until now at least, the normal way of life in Hong Kong.

However, on Thursday, May 21, China issued its new “national legislation” in Hong Kong to pretty much step in and take over, implementing crackdown laws and stepping up police presence.

The protests which have taken place in Hong Kong in recent years have sparked this move. Many Hong Kong protesters no longer want to be affiliated with China, and have asked the world for assistance.

In turn, Chinese authorities asked their Hong Kong counterparts to come down hard on the protesters, but Hong Kong police have pretty much allowed the protests to go ahead, and Hong Kong authorities have not done anything legislatively to either stop the protests, or to disassociate themselves from China.

So, how will a new generation of youth respond? How will the governments of Hong Kong, China or the world, for that matter, respond?

What I do know is this – if a Chinese crackdown begins, the financial markets of Hong Kong will tank! This tanking will spread to other financial markets until it hits the U.S. just as fast as the coronavirus did.

And how will Wall Street respond? The old timers might balk! Many might figure it will spread to the U.S. markets and expect them to fall. Many younger Wall Street brokers have never seen this before – so how will they respond?

This is indeed a very dangerous situation. We could have Hong Kong tanking with bad financial news, while the U.S., though showing a bit more growth recently amid signs of the “re-opening of the economy”, is still teetering on the brink of a possible recession.

But if one is to believe that a “second coronavirus wave” is going to happen, and our U.S. economy continues to go down, coupled with the tanking of the Hong Kong market, then we will be looking at a triple whammy effect.

It is therefore conceivable that all ends of the wave, the Asian and U.S. financial markets, could create a worldwide depression.

As we are learning with the current coronavirus crises in the U.S., while our country has been able to handle the crisis financially, it has been with sad side effects; unemployment now hovering at 25 percent.

If the double whammy effect takes place i.e. the tanking of Hong Kong, we could be looking at U.S. unemployment rates of 35 percent, without even discussing a possible second coronavirus wave. This is how important the China / Hong Kong crisis is to the U.S. economy.

If a second coronavirus wave does hit, then this triple whammy could bring unemployment to as high as 55 percent.

Maybe, what’s even more scary is that I am not sure that our current 2020 presidential candidates, Biden and Trump, have the foresight or courage to implement a plan to save Hong Kong or the U.S.