Tony Daltorio

China: The Brightest Star on the American Investment Horizon

There is NO China bubble, but there is one in ALL US assets.


On Dec 10 12:42 PM DrBenway wrote:

> >> The only dark cloud on the horizon is the prospect of increased
> Chinese inflation from the declining yuan.
>
> I can offer a few other dark clouds:
>
> - An unsustainable real eastate bubble (especially commercial). When
> I was in Shanghai, I stayed in half-empty hotels 5 start hotels paying
> about $80 a night
>
> - A huge manufacturing overcapacity. China's prices have actually
> DEFLATED while the economy is supposedly growing at over 8%. Just
> look at any data
>
> - A stimulus-driven non-organic GDP growth. What will happen after
> the stimulus is withdrawn and there's still no one to export to?
>
>
> All in all, it is not a matter of if the Chinese bubble will poop
> but when.

Five Reasons China Is Not a Bubble

One more reason China is NOT a bubble:

Look at most of the commenters - very bearish on China - which for a contrarian investor like me says that the China investment story is still in the early innings.

Asia: The Next Big Bubble

These articles talking about the China bubble and ignoring the biggest bubble - the US - always amaze me as to their lack of knowledge.

The author should pick up a recent issue of the Financial Times and read about how within a few years, the Chinese will be doing trillions of dollars in business in the renminbi and begin to internationalize their currency.

And despite the authors's claims, US banks have NOT repaired their balance sheets - the dirt has merely been swept under the rug.

The Great Bubble of China: Beginning of the End or the End of the Beginning?

What absolute poppycock. Do you work on Wall Street?

If not, you sure have swallowed their Kool Aid. The coastal cities in China being the economic growth engine was true 10 years ago, not today. Economic growth is coming from the vast interior provinces of China.

You also speak of China's low moral standards. In comparison to Goldman Sachs and the rip-off kings of Wall Street, they are choir boys.


On Jul 29 10:52 AM Susan Weerts wrote:

> It is easy to say today that “all that talk in the 80's was just
> hooey.” Let's compare 80's Japan before it collapsed and China today,
> every companies in the world raced to open an office in Japan and
> hot money flew in left and right. Its stock market and housing market
> sky-rocketed. Japanese was on the shopping spree to buy anythings,
> from 7-up chains, Rockefeller center, MGM(or paramount) and etc as
> well as various resources (they gulped up coal, oil and etc) worldwide.
> (Even today, they imported enormous coals, which stored somewhere
> underground in Northern Japan) They had the largest currency reserves
> in the world back then while USA was in a huge deficit and in the
> midst of housing burst. They transferred its old export economics
> into technology-oriented. They had an artificially depressed currency
> compared to $. They launched massive infrastructure projects, including
> bridge-to-nowhere (compared to china's build it, destroy it, and
> build it). They had (still do) very high saving rate.
> They passed massive plans to stimulate its domestic demands...<br/>
>
> It is true that Japan were lack of land and resources. Most of Chinese
> developments concentrates on a few of coastal cities, which are lack
> of land and resources. It is true that you can view these cities
> acting as a hub or financial center for its future inland developments.
> You need some sort of organic growth in those inland areas to foster
> the credible/sustainable growth. China can not just build itself
> out for the future growth, especially majority of building are in
> the already-developed areas.
>
> In addition, Japan's mom-pop organization hierarchy contributed some
> synergy to its economics developments (although it is debatable.)
> China faced more back-stabbing, infighting, and bureaucratic red
> tape.
>
> Then again, anything is possible. China might successfully negative
> itself to the top. As you said, USA might just roll over.
>
> I just want to point out the similarity between 80's Japan and China
> today. Correct me if I'm wrong. I didn't have the first-hand information
> on 80's Japan.

The China 'Bubble': Buy, Sell, Or Hold?

Some of the most amazing comments I've seen on Seeking Alpha were made by "feel-good" Americans full of hubris saying how deplorable conditions in China are.

Yes, there are deplorable conditions still in many parts of China with many horrible business paractices. People forget that China is an EMERGING market. When the US was an emerging market decades ago, the working and business conditions were not so good either.

But China is making unbelievably rapid progress and will be THE economic power in the not-so-distant future.

Not investing in China today is like those European investors in the late 1800s who fluffed off that emerging market - the US - as too wild and not investible.

The Dollar Is Safe for Now

The author is missing the key point. Yes, China will not dump trillions of dollars onto the market at once. But, China has already started down the road of GREATLY reducing their future purchases of US Treasuries.

The consequences of this action will be that the Federal Reserve will have to print even more money - monetize even more of US government expenditures.

This will lead to a much weaker US Dollar over the next few years and much higher inflation.

Buy China: It's Actually Benefiting from Global Recessions

Your point is well taken. However in comparison to phonied-up American statistics and obscure reports from financial firms, I'm more likely to believe Chinese statistics than US statistics.


On Apr 02 09:20 AM rm96696 wrote:

> Once again the writer takes Chinese data a face value. He writes
> that Chinese gdp grew 8 percent per year between 2001 and 2003 despite
> falling house prices. Is he sure? Has anybody noticed that the chinese
> publish data almost in real time. The only country as quick is singapore,
> but they only have to cover one city...
>
> While I grant that the chinese economy grew very rapidly between
> 2004 and 2007, clearly the data from 1998-2003 is absure.
> Frankly, I don't think the chinese government (or anyone) really
> knows how fast (or slowly) the chinese economy is growing.
>
> The only certainty is that, having stated on many occasions that
> it has a target of 8 percent growth and it is confident of meeting
> it, they government will report that the economy grew at slightly
> more than 8 percent at the end of the year.

Economic Fault Lines Emerge

Gee, that's funny I travelled all over the world too and I saw that the US is the laughing stock of the globe.

Your point about our political system is correct is you're talking about the America of 50,100 or 200 years ago. Now the political system caters to the people who want 'it' and they want 'it' right now without having to break a sweat.

Future economic leadership will belong to the people who are willing to work and save. That is not America.


On Mar 29 01:26 PM InvestBaboo wrote:

> While production lies elsewhere the leaders of the free world are
> American companies and enterprises. It is natural in a "GLOBAL" economy
> that the arms, legs and perhaps a big portion of the body may lie
> elsewhere in the world while the brain lies in America. Schiff asserts
> that the whole body must lie in a given country and then (and then
> only) the overall production of that body is attributed to that country.
> This is wrong.
>
> What needs to happen to the American workforce is that they need
> to climb to be the brains of the operation and not the producers
> at the lower level. Many in the workforce have done this and as a
> result are thriving in their profession. While I think that in the
> short run there will continue to be suffering and wage degradation
> in the long run Americans will figure out exactly how to play their
> role in the new global economy.
>
> America is the only country in the world that has the best possible
> political system to assure future growth. India and China have incredible
> internal social and political issues and Europe is a divided continent.
> China will not rule the new economy -- America will.
>
> All the soapbox pontification aside one needs to look at the charts
> and follow the famous adage "The trend is your friend till the bend
> at the end". At the present there are daily and weekly buy signals
> on a wide spectrum of companies in a wide spectrum of industries.
> Peter Schiff's doom and gloom predictions aside it appears that world
> investors are voting for America with their wallets. Do not miss
> the beginnings of what could be one of the greatest bull market runs
> in history. Rarely if ever do you get a chance to buy name brand
> American global behemoths at incredible bargains. If you invest today
> you will be a very happy camper in 5 to 10 years.
>
> I have traveled all over the world and I can assure you that no country
> has what it takes to be the world leader like America. The throne
> belongs to America and will stay with America for the next several
> decades.