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Matthew Cowie
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Financial Analyst for Mutual Fund Investor Guide; currently living in Beijing, China. Previously worked as a financial analyst for for Fidelity Independent Adviser Dion Money Management. Articles written have appeared on CNBC.com, Yahoo Finance, theStreet.com and Seeking Alpha.
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Investing in Chinese Stocks
  • Liu Jun Luo: The Gold Smash Is The New Opium War 0 comments
    Apr 18, 2013 10:53 AM | about stocks: GLD

    Liu Jun Luo is an intersting blogger. If China had a ZeroHedge, he would be featured on it. He predicted the 2008 crisis and was looking for a gold smash in 2010. He has told Chinese people in Beijing not to buy homes for over two years because prices will collapse. He has predicted an epic dollar rally to take the yen to 250 and the renminbi to 20 to $1 (with hyperinflation for China), and have the U.S. back on top economically. He's literally the mirror image of so much U.S. opinion that paints the Chinese as smart long term planners. He thinks the U.S. government is smart and the Chinese government is run by morons. For example, the U.S. dominates the knowledge industries, while China built up commodity manufacturing. Case in point for his argument: the bulk of iPhone profits go to Apple and they use contract manufacturing.

    This is my quick and dirty translation of his latest, which dubs the gold smash a "new Opium War":

    The gold smash is designed to wipe out the people with high cost basis in gold. But if gold plunges 10% in a night, why was the Dollar Index so weak and why did the renminbi hit a new high?

    This is WWII strategy. First, use tanks and artillery to blast a hole in the lines, and then send in the army to rapidly and violently penetrate the lines. Well, in the financial war, gold is the tanks and artillery, the dollar index is the army. The Americans and Chinese "Yeltsins" are working together to raise the renminbi exchange rate and pull in more people to buy the dips. Today is the "gold gap" campaign, but by the end of April or in early May, this will shift to the "dollar index army" and it will be rapid and violent.

    Military war and financial war use different results to reach the same outcome.

    Original: 黄金大抄底与"新鸦片战争"

    Translation from English to English: big dollar rally coming to make China puke gold. Just as the English came for Chinese silver.

    He's been off with predictions before, so I don't post this to hype a crash in the next month. Rather, give a Chinese perspective on the crash. So many gold bulls think the Fed is trying to harm them, but the Chinese see the Fed coming for Chinese gold.......

    Themes: gold, China Stocks: GLD
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