The World's Most Extreme Speculative Mania Unravels in China

Now, as Chinese authorities introduce trading curbs to prevent surging commodities from fueling inflation and undermining plans to shut down inefficient producers, speculators are retreating as fast as they poured in. It's the latest in a series of boom-bust market cycles that critics say are becoming more extreme as China's policy makers flood the financial system with cash to stave off an economic hard landing.

"You have far too much credit, money sloshing about, money looking for higher returns," said Fraser Howie, the co-author of "Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise." "Even in commodities where you could have argued there is some reason for prices to rise, that gets quickly swamped by a nascent bull market and becomes an uncontrollable bubble."