nova

U.S. vs. China: Has Trade War Begun?

Ben Gee wrote:
" Put on your seatbelt, we are going for a rocky ride. How far and how fast the trade war will esculate will depend on how stupid our leaders are?"

Obama got into the office with help and money from blacks and unions. Now, he is paying back endangering the rest of America.

U.S. vs. China: Has Trade War Begun?

Yes, an inevitable trade war just started. This is not an issue for investors.

The issues for investors:
- Where will China put their US$$ to prevent a major financial loss on their side?
- Where and how will China retaliate (economically, financially, and geopolitically)?
- How soon & fast will US inflation starts to accelerate?

China Becoming a 'Middle-Class' Nation

Unfortunately, too many people have no clue of what they are talking when they discuss China, its economy, its political system and its culture..

This is what America all about. Remember a shoeshine boy offering Wall-Street investing recommendations just before the market crash back in Nov.1929?

Can China Convert Itself into a Consumer-Based Economy?

Speaking about China, it is important to understand and remember that China is still a communist country with a government-controlled economy.

Chinese government & communist party develop and implement China's strategic objectives. As of now, China strategic objectives are the same they were 5 or 10 years ago. Specifically, using their export, to generate substantial foreign currency reserves to:
- Acquire advanced technologies
- Acquire access to and possession of strategic materials
- Substantially improve their military capabilities
- substantially enhance their geopolitical physical presence all around world

Consequently, discussions about Chinese consumerism are nonsense!

Dose China want to improve standards of living of their people? Yes, but it is not their major objective.

PS
There is nobody in the USA who intelligently cares about its strategic objectives.

China: A Reason to Be Cautious

Investing in Russia? Good luck! At any moment, Russians can do anything they like, and you can kiss your money good-bye. Yes, one can try Russian legal system (assuming someone is a total idiot and likes to get killed).

As for China, their economic miracle reminds me very much Stalin's economic successes in the Soviet Union in 1930s. Unfortunately for China and the rest of the world, their economic model is not sustainable creating in a long run a major geopolitical confrontation. Finally, Chinese manufacturing advances resulted, in a large degree, from free transfer of American technologies. This avenue is about to be closed very soon.

No comments about India and Brazil.

Something Is Happening in China: How Investors Can Profit

Twenty-tree years ago, everybody thought that Japan was "unstoppable" overtaking the rest of world.

Now, many people think the same about China. Will an "unthinkable" happen to China when it will become suddenly stagnant and overwhelmed with too many problems? It is a good question.

Right now, using its cheap and forced labor, and technology bought and stolen from all around world, China has developed incredible industrial capabilities.

However, China has many weaknesses that could seriously jeopardize China future:
- China is a Communist state with its bureaucracy running the show. It is a very inefficient economic model and very slow to change.
- China is an "export-dependent" economy. It has very little control of its economy being too dependent on outside world.
- The rest of world has very little money to pay for Chinese export.
- China is very dependent on outside world for natural resources, commodities supplies from oil to industrial materials to agriculture, et.,. In its quest for natural resources, China inevitable will enter into a major confrontation with other major industrial powers.
- It will be very difficult for China to stimulate its economy. China population has very little money to spend. Their standards of living are very low.

The Bottom Line: Chinese future is not that clear.