Shenzhen Stock Exchange (2010) byLeon Petrosyan. Via Wikimedia Commons . Defenders of the free market faith tell us that price conveys a great deal of information, enough that you can base an entire economic system on it without any central planning or coordination whatsoever. Whether extreme devotion to this principle is wise may not be so important to determine this week as whether free market prices are actually available in many markets. Recent events surrounding the precipitous decline of the Chinese stock market are illustrative of this problem, but I’ll come back to this a little later. Years of suppressing the cost of credit through central-bank imposed near zero interest rates has led to the mispricing of anything that depends on credit. The list is long and includes real estate because mortgages are central to its purchase; oil because cheap bank loans and low bond rates financed otherwise uneconomic […]