As Stephen Roach explained in his book ” The Next Asia” and Bill Gross declared yesterday in Bloomberg, China is facing a bubble of their own to confront.

Gross : ” “It’s gearing up for export that doesn’t find an end consumer, that’s the real problem in China.”

The “systemic risk” of new asset bubbles in global economies and markets is rising with the Federal Reserve keeping interest rates at record lows…

The Shanghai Composite Index of shares returned 84 percent this year. The index is valued at 35 times reported earnings, more than doubling in a year.

Under what Pimco has termed the “new normal,” investors should be prepared for lower-than-average historical returns with heightened government regulation, lower consumption, slower growth and a shrinking global role for the U.S. economy.