Albert Edwards at Societe Generale has grave doubts about the American economy.

The S&P 500 index of US shares, he thinks, is about to crash through its half-century support line to 500.

“Technicals say it is time to bail out. Cut equity expose and prepare for rout. US depression looking likely. While China’s 2009 implosion could get ugly.”

Albert Edwards has called this crisis right from way back. He goes on:

“The Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression. … Do you really trust politicians to do the right thing?

“Could the economic situation in China become so bad that it threatens the regime itself? Of course it could. But before being swept away in a tidal wave of worker unrest it has one key tool in its economic armoury it has used before. MEGA-DEVALUATION. China has a track record of such things. At the end of 1993 the authorities devalued the yuan by 33pc.”

Is the way to a Smoot-Hawley II — the Act that caused a catastrophic loss of world trade and the Great Depression? I doubt that a U.S. with Ben Bernanke at the Fed would make the same mistake twice.

However, Edwards continues:

“Amid confidence that the ongoing, massive, monetary and fiscal stimulus will prevent a repeat of the Great Depression, will it instead be competitive devaluation and implosion of world trade that we should watch out for.”