There seem to be a number of very successful investors (I think for instance Jim Rogers and Anthony Bolton) who have decided that China is the place to invest in right now. But isn't China's situation similar to Japan's in the 1980s? I'd invest in China, but I can see it going the same way as Japan. I don't really see that the Japanese goverment could have done that much to prevent the late 1980s bubble, so however aware of Japanese economic history the Chinese government may be, I fear the same thing is going to happen in China. What are your views?
I've been commenting on trader333's post about not knowing the future. I don't know how old you are but I'm into my 79th year.
I can tell you that life is full of surprises and you can only hope that your mistakes will be small ones.
When I was a kid, we were at war with Japan and China was an ally.
When I was a young man there was a civil war in China and Corea and they became part of the cold war, with Japan as an ally.
Now, we find that China is America's biggest creditor, Russia is a democracy and Iran is creeping out of the woodwork.
China is not a democratic country which, arguably, is an advantage that Japan does not have. It, also, has a lot to do to bring its population up to a decent standard of living. It has enough internal work to do to keep it going until the rest of the world gets working again. Its requirements are going to make mineral rich countries like Australia, etc very weathy nations.
Investing there is a very big step to take, even with big funds like Jim Rogers has. Nevertheless, very serious minded funds and banks did get their fingers burnt by investing with Madoff, so investing a prudent amount in China cannot be a worse idea.
I'm fit and happy enough not to want to step off this mortal coil just yet, but I don't envy the young their problems. Just as long as you don't all blow me to bits!
I can tell you that life is full of surprises and you can only hope that your mistakes will be small ones.
When I was a kid, we were at war with Japan and China was an ally.
When I was a young man there was a civil war in China and Corea and they became part of the cold war, with Japan as an ally.
Now, we find that China is America's biggest creditor, Russia is a democracy and Iran is creeping out of the woodwork.
China is not a democratic country which, arguably, is an advantage that Japan does not have. It, also, has a lot to do to bring its population up to a decent standard of living. It has enough internal work to do to keep it going until the rest of the world gets working again. Its requirements are going to make mineral rich countries like Australia, etc very weathy nations.
Investing there is a very big step to take, even with big funds like Jim Rogers has. Nevertheless, very serious minded funds and banks did get their fingers burnt by investing with Madoff, so investing a prudent amount in China cannot be a worse idea.
I'm fit and happy enough not to want to step off this mortal coil just yet, but I don't envy the young their problems. Just as long as you don't all blow me to bits!
I like Splitlink's comment!
And I read an article on this problem too. It's also interesting. It listed 4 differences and 8 simularities between nowadays China and 1980's Japan. It is too long to post here. you can read it by following link:
http://research.fnchn.com/Will_China_reproduce_the_61827.aspx
China's government is much stronger than 1980's Japan. I dont think China will repeat Japan's history~~~~~~~~~~~~~~~
And I read an article on this problem too. It's also interesting. It listed 4 differences and 8 simularities between nowadays China and 1980's Japan. It is too long to post here. you can read it by following link:
http://research.fnchn.com/Will_China_reproduce_the_61827.aspx
China's government is much stronger than 1980's Japan. I dont think China will repeat Japan's history~~~~~~~~~~~~~~~
B
Black Swan
Wise post Split...a couple of Chinese proverbs for you
If you must play, decide on three things at the start: the rules of the game, the stakes, and the quitting time.
With money you can buy a house, but not a home.
With money you can buy a clock, but not time.
With money you can buy a bed, but not sleep.
With money you can buy a book, but not knowledge.
With money you can buy a doctor, but not good health.
With money you can buy a position, but not respect.
With money you can buy blood, but not life.
With money you can buy sex, but not love.
chilltrader
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erm.. the Chinese (?)
scose-no-doubt
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Well apparently, all of those pi55 poor country bumpkins out in the sticks will be buying condos and Chinese cars soon so everything should be fine.
Whatever it is that they make, you can be sure that the population is going to want its share of the little that is left of the world's minerals. This means that when we get back to full capacity again it will be with high labour costs and much higher mineral and energy costs, plus a country that will brook no nonsense from the US, or anyone else.
scose-no-doubt
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Which means that a lot Chinese companies which mostly have very thin margins will not be able to cope and the country may start to lose it's competitive edge in to neighbouring emerging nations.( <-see macro man blog) Makes sense to me but I'm a bean counter lol.
We should take into consideration that this is not a democratic nation. The government will do what it thinks fit. The trillions of dollars it has of western (and everyone else's) debt will help it to import raw materials and, possibly, pass it on to their manufacturers in the form of subsidies so as to make their margins healthier.
This is all surmise on my part and I am, in no way, an economist but look at how the US has been moaning about the pegged Yuan. Unfair practices? They could not care less.
This is all surmise on my part and I am, in no way, an economist but look at how the US has been moaning about the pegged Yuan. Unfair practices? They could not care less.
scose-no-doubt
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Nor am I Split but I personally I think the dollar peg argument is more political than economic. Common enemy and what not.
I believe that it was Robert McNamara who preached to his bosses that economic pressure is much more effective than military. Military force should only be used when all else has failed.
I have the idea that China has got the US by the balls by using that very policy. The amount of US debt that China has is very worrying and it could bring the dollar down. The US has to tread very carefully. The US would have dealt with North Korea like a shot
if they could have got away with it.
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