goldminingXpert (30.70)

37 Comments – Post Your Own

#1) On March 18, 2009 at 4:59 PM, 4everlost (30.26) wrote:

GMX,

I appreciate you sharing your perspective.

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#2) On March 18, 2009 at 5:02 PM, Gemini846 (88.80) wrote:

[quote]China's boom was built on the false illusions of globalization, a manipulated currency, and the premise that cheap oil would last forever. Now, we find out, the majority of Chinese cities are critically short such niceities as fresh water--realize they will be paying out the nose for oil over the next decade (they have virtually none domestically) and they are still run by a deadbeat tyranical government.[/quote]

I only see one difference between them and the U.S at the turn of the 20th century. What do you think about India?

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#3) On March 18, 2009 at 5:05 PM, dudemonkey (58.63) wrote:

Not sure I follow the leap from "media company changes name" to "China is done."

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#4) On March 18, 2009 at 5:09 PM, maxhoffa (< 20) wrote:

china is far from done.  if you're not 15-20% into china, you're going to suffer long term.

 

IMO.

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#5) On March 18, 2009 at 5:10 PM, goldminingXpert (30.70) wrote:

dudemonkey... this should help you out. Here's the performance of three Chinese finance related companies:

JRJC (the 10-pound gorilla of the space): -70% since summer 08

CHFI -85% since october 08

XFML (now XSEL) -96% since IPO.

When scammers quit naming scams after a hot fad, you know the bubble truly has popped. And China was one long hot bubble--now that it is over, they face collapse for a variety of reasons involving terrible government, resource shortages, currency shenangians, and massive social crises. Just like you don't see any more scams with "solar" in the name, the pipeline of "china" and "finance" stocks is completely dried out now.

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#6) On March 18, 2009 at 5:11 PM, goldminingXpert (30.70) wrote:

Maxhoffa, and this is for what reason?

My argument is that a crippling shortage of cheap oil, fresh water, human rights, and currencies to sell their goods to will destroy them. What's your refutation?

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#7) On March 18, 2009 at 5:12 PM, goldminingXpert (30.70) wrote:

countries, not currencies* in post 6.

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#8) On March 18, 2009 at 5:15 PM, Schmacko (93.87) wrote:

Here's the performance of three american related financial companies from their 52 week highs to current close price:

BAC: - 82.35%

C: -88.7%

AIG: -97.2%

Apparently america is done too :(

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#9) On March 18, 2009 at 5:23 PM, maxhoffa (< 20) wrote:

gmx: you can pick at the heavy handed market guidance in china, but still, you can't pick at the last decade worth of economic growth we've seen in spite of it.  accurate valuations of specific companies will continue to be a problem for the forseeable future, as will be over-exuberant investor speculation, but to completely give up on the red market is a mistake. 

again, IMO.  

you DON'T give up on what promises to be the largest middle class boom in history w/o taking at least some long market positions.  and as far as cheap oil, water, and human rights goes, those were all in play for the past 5 years of major red china growth.  i'm not sure they'll (1) be long term factors or (2) make any real difference anyway.

 

i'm with you plent of times gmx, just not with china it seems.  i love china and brazil . . . and the u.s.of.a too for that matter

 

 

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#10) On March 18, 2009 at 5:26 PM, maxhoffa (< 20) wrote:

and if cheap oil is a limiting factor, doesn't that preclude any and all economic growth globally (i'm a peak oil guy, WRT cheap oil anyway)?  why would that be limited to china?  or am i not getting the gist of your cheap oil point?

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#11) On March 18, 2009 at 5:26 PM, dudemonkey (58.63) wrote:

if you're not 15-20% into china, you're going to suffer long term.

Probably.  The problem I have with China is that when you play in their sandbox, you are DEFINITELY playing by their rules.  The Chinese government is the organization that decides which companies get lots of access, preferential treatment, low interest loans, and favorable regulation.  The free market does not really have the same impact that the government does.  That means that it's much more difficult to predict which Chinese companies will do well over the long term than it is with freer markets.

I'm actually staying away from China.  Of the emerging BRIC nations, I think Brazil is by far the best bet.  India is still too fractured to know where to invest and Russia shows no sign of learning from previous self-destructions.  I have more invested in Brazilian securities than US securities as my short-term (next 3-5 years) projections for Brazil are favorable and I can't say that about the US.

I'm still buying US stocks, just not at the rate I'm buying Brazil.

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#12) On March 18, 2009 at 5:27 PM, dudemonkey (58.63) wrote:

Good discussion, by the way.

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#13) On March 18, 2009 at 5:33 PM, maxhoffa (< 20) wrote:

then what's your take on companies like BBL and PBR (and even ag companies such as BG) . . . companies outside of chinese oversight who stand to profit big from red growth?  if nothing else, you need to consider non-chinese companies with a clear path to chinese infrastructure and waistline . . . especially if your argument hinges in part on a lack of chinese market efficienty (which *should* make foreign commodities like BBL can provide relatively cheap).

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#14) On March 18, 2009 at 5:37 PM, goldminingXpert (30.70) wrote:

and if cheap oil is a limiting factor, doesn't that preclude any and all economic growth globally (i'm a peak oil guy, WRT cheap oil anyway)?  why would that be limited to china?  or am i not getting the gist of your cheap oil point?

America has a sizeable chunk of oil/nat gas reserves and we get virtually all the rest from friendly countries (Canada/Mexico/etc.) whereas China has virtually none of their own reserves and have to get their supply from dangerous nieghbors. If the crap hits the fan, China gets cut off before we do, Canada isn't going to say no to their neighbor. The US can also use alternatives such as coal more easily because A) we have more of it, and B) we don't have crippling smog and rivers that catch on fire (anymore.)

If you're long China and haven't read about the national water-shortage, you really should look into it. I'm thinking that a widespread (and increasingly bad) water shortage destroys manufacturing which is by rule water-intensive. How is China even going to power herself--you might say nuclear but it uses a godawful amount of water--Australia doesn't use nuclear precisely because of how much water it consumes.

Our economy is also largely service driven. I don't have the #'s at my fingertips but it takes far more oil to produce a dollar of GDP growth in China as it does in the US. We can weather (barely) the upcoming $200+ oil--it will send China into a cultural meltdown.

I'm actually staying away from China.  Of the emerging BRIC nations, I think Brazil is by far the best bet.  India is still too fractured to know where to invest and Russia shows no sign of learning from previous self-destructions.

Yes, yes, and yes. You are a wise investor.

I'm still buying US stocks, just not at the rate I'm buying Brazil. 

I fundamentally like solvent commodity countries for the long run such as America, Canada, Brazil, Australia/New Zealand. Canada is the best long-term buy and hold opportunity at the moment imo.

That means that it's much more difficult to predict which Chinese companies will do well over the long term than it is with freer markets.

Yes, and just you wait until you have massive riots in China. The government will crack down and the free market go bye-bye. So long to all your ADRs.

you DON'T give up on what promises to be the largest middle class boom in history w/o taking at least some long market positions.

It's going to end up being the biggest class movement bust in recent history. People lifting themselves up to the middle class for a few years just before the oil, electricity, and water ran out.

---

You do all know China has a 1-child policy, right? It has it for a reason. They don't have enough resources to support 500 million people, not to mention the 1.4ish billion they do have.

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#15) On March 18, 2009 at 5:38 PM, Ph1sh55 (28.89) wrote:

"Probably.  The problem I have with China is that when you play in their sandbox, you are DEFINITELY playing by their rules.  The Chinese government is the organization that decides which companies get lots of access, preferential treatment, low interest loans, and favorable regulation.  The free market does not really have the same impact that the government does.  That means that it's much more difficult to predict which Chinese companies will do well over the long term than it is with freer markets."

I'd take the Chinese governments intervention right now over what the US Government is doing.  Christ..

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#16) On March 18, 2009 at 5:45 PM, Donnernv (< 20) wrote:

GMX:

Just a small point.  Nuclear power plants don't use a godawful amount of water.  Water is circulated through the plant for cooling, but it's returned to its source.  Very, very little is consumed.

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#17) On March 18, 2009 at 5:47 PM, goldminingXpert (30.70) wrote:

In regards to those individual stocks, I have no opinion on Bunge. I felt that the entire ag industry was way overvalued last year and so I haven't studied it in depth. Recently, I've gotten comfortable with Syngenta (SYT) under 40, but most of the ag names, cough Monsanto cough, are priced at markups the mafia would be proud of.

BBL--I don't see any reason to suspect demand for base metals is about to rebound. I'll be interested in a few years when the global depression ends.

PBR--Haven't studied it in particular, but I am coming around on big oil at these levels. I particularly like BP for the fat dividend.

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#18) On March 18, 2009 at 5:49 PM, maxhoffa (< 20) wrote:

gmx: did you hold any chinese stocks the past 5 years?  all of those factors have been in play, oil was as expensive as it ever has been, as it's likely to be for the next 5-7 years, and china has flat out killed it.  if you didn't invest in china, i hope you saw equally good performance. 

china has issues.  the entire world does. i'm still buying.

i don't think china needs 'cheap oil' to thrive, although you raise a good point re: the NRG cost to produce $1 of chinese GDB vs. u.s. GDP.  that's an interesting angle.  china was doing fine with oil well over $100 though, and i think they'll do fine with oil in the 70-100 range i see it trading in for the  near future.

 

 

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#19) On March 18, 2009 at 5:54 PM, maxhoffa (< 20) wrote:

MON will own, by court order, the legal rights to a good chunk of everything you eat . . . that is one squared away legal department.  i think monstanto will do just fine.  and yeah, mafia is about right with those guys.

 

i like AG in general.  overbought in general last year, but then so was everything else.  

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#20) On March 18, 2009 at 5:55 PM, OldEnglish (28.09) wrote:

Everything is relative. China will suffer but America will suffer more. XFML is nothing in comparison to Madoff/Stanford. Corruption is rampant in China. It's so bad they're almost honorary Amercians.

China has huge problems and is already in recession contrary to the fake reports their government puts out. Jim Chanos has already pointed out that power usage doesn't drop in an expanding economy. 

However, oil will remain cheap relative to the renminbi. Unemployed Americans certainly won't be buying any oil. Put away your Hubbard Peak oil charts. At $80 a barrel China can use coal gasification effectively. They already have several plants that do just that. Tyrannical dictatorships don't worry about trivia like global warming. In addition, America is pursuing a policy of ineffiency. Alternative energy isn't as competitive and the Chinese know that. America will continue to become less competitive.

Even with all its corruption and problems, China is still more capitalistic that America. 1) People save money. 2) They don't have massive and unfundable entitlement programs to reward the non-competitive. 3) A lack of fresh water is self limiting. And, China is doing something about it: China punishs rather than rewards people who have children they can't afford.  A policy America will never have the courage to adopt.

Even with a 50% change in currency valuation, Chinese products will still be a better value at Walmart. China has a far brighter future. Human rights? The right to have babies and homes you can't afford and then stick a gun in your neighbor's face to pay for them? Spare me.  As for tyranny, the United States has more people in prison than China. Tyranny is forcing your neighbor to pay for EIC, Section 8 housing, Medicaid, Medicare, presciption drugs, food stamps... Yes, I can complain about it anonymously on the internet but I would be ruthlessly punished financially if my opinions were made public.

In America, you have the freedom to agree or to strongly agree. 

 

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#21) On March 18, 2009 at 6:02 PM, maxhoffa (< 20) wrote:

i'm in germany, so it's off to bed.  but bottom line for me (or near bottom line) with respect to oil and china, china has shown far more GDP growth with a far smaller fossil BTU/population comsumption than the u.s. . . . again, cheap oil helps those margins out but doesn't significantly limit overall growth of the red economy from what i can see

i'll follow your advice and look into H2O though

 

g'nite

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#22) On March 18, 2009 at 6:12 PM, goldminingXpert (30.70) wrote:

I'd take the Chinese governments intervention right now over what the US Government is doing.  Christ..

Don't be so quick. You might get what you wish for. Their market dropped 70% in the course of months--way faster than ours. We were upset when America banned short selling financials, well China never allowed financials in the first place.

Nuclear power plants don't use a godawful amount of water.

Take a gander at this report from the government of Australia

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#23) On March 18, 2009 at 6:17 PM, goldminingXpert (30.70) wrote:

grr, never allowed short sales.

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#24) On March 18, 2009 at 6:22 PM, Schmacko (93.87) wrote:

China will start to enact tougher enviornmental protocols to work on their water and desertification problems.  Does anyone remember when acid rain was heavily talked about in the US?  Does anyone hear about it anymore?  You can get corporations to change if you have the will to make it happen.

China will continue to move into africa to get greater access to natural resources including oil and they have no problems working with countries we won't touch.  Sudan anyone?  They supply 10% of china's oil imports and as long as china has their back sudan will keep on commiting genocide.  I'm sure Iran has no qualms about selling oil to china as well.

China continues to rapidly grow and evolve their military.  They recently sent ships to perofrm escort duty for merchants around somalia and I'd say twenty-thirty years ago they wouldn't have had the logisitics or tech to do that.  They're still mainly a brown water navy but they're rapidly increasing their blue water capabilities.  Blue water navies are the true face of force projection in the world and once china feels adequate in that area I expect them to flex their muscles more.

They still have lots of currency reserves and a lot of buying power and I don't expect that to change much.  In terms of lacking people to sell goods too I'm sure they'll find ways to greater diversify their trading partners over time and probably increase domestic consumption as well.

They're basically turn of the century america like someone else pointed out earlier.  They're more pure capitalist than we are and I expect that and the fact their govt just don't give a f*ck to keep them chugging along.  They're being hit hard right now, but who isn't?  China will go back to pimping it's low cost goods to the western world when things start to turn, in no time.  Are we suddenly going to start manufacturing everything ourselves again?  Doubt it.

Give China 50 more years.  They'll be a military super power as well as an economic one and then we'll see what the world looks like.

The only thing that will stop that from coming true is massive social unrest in China, and the government is very good at stomping that out by any means necessary.

 

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#25) On March 18, 2009 at 6:48 PM, MacroMined (27.90) wrote:

goldminingXpert

My argument is that a crippling shortage of cheap oil, fresh water, human rights, and currencies to sell their goods to will destroy them. What's your refutation?

It's all relative... I'm not seeing how China will be more heavily impacted by expensive oil than the U.S. or Europe. China is developing massive assets in the South China Sea, and signing oil supply deals all over the world while the U.S. and Europe are throwing every trillion into an endless black hole of debt. China also has massive coal reserves and metals, including a significant supply of gold. Access to resources will be one defining factor for nations in this new global economy, and China has access to some amazing stuff. The U.S. has great stuff too, don't get me wrong, but as the epicenter of the financial crisis with more than $11 trillion being tossed after it... we have crippled ourselves from enjoying the full benefit.

I'm no sinophile or anything of the sort, but objectively speaking, I'd take the Yuan over the USD any day.

Without a doubt in my mind, barring an outbreak of hostilities that tips the economic balance of power back away from China... I see China as the global economic leader for a generation yet to come.

 

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#26) On March 18, 2009 at 9:24 PM, throwerw (30.09) wrote:

i would agree with oldenglish that china is more capitalistic than the US.  Anybody who has actually been there could attest to that. On average, the students I've met in China are far more driven than those I go to school with in the US.  They have saved their income for a rainy day and are now buying up some of the resources they will need in the future for cheap.  I don't see expensive oil having a big effect on China's growth.  Most people take advantage of the extensive public transportation that's available or just ride bikes and electric scooters.  Their oil reserves out in the the northwest are potentially massive.  Oil plays a far smaller role in china's economy than it does in america, where nobody can get anywhere without driving a car.

America has had its fair share of scams and ponzi schemes  as well.  you are using faulty logic in your assessment of china's economic prospects.  you have a nice caps rating but you are way off on this one.

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#27) On March 18, 2009 at 9:58 PM, Seano67 (55.52) wrote:

You also have to consider the Chinese mindset. They are above all else pragmatic, and in many ways view this recession as being a painful yet useful time-out from the rampant growth they'd undergone in the prior decade and especially leading up to the Beijing Olympics. That rate of growth was just too much, and if it continued unchecked, it left open the possibility for a truly massive collapse. But now they can take a little breather, take a look around and see where they're at.

They take the historical perspective as well as a very forward looking one- they're not thinking about just tomorrow, next week, next month or next year, but they think in terms of decades and centuries ahead. They really do.

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#28) On March 18, 2009 at 11:58 PM, goldminingXpert (30.70) wrote:

Oil plays a far smaller role in china's economy than it does in america, where nobody can get anywhere without driving a car.

This just plain isn't true and is the crux of the problem. Transportation isn't the issue--it's energy. And manufacturing uses a ton of it. Our economy is not nearly as energy dependent as China's because we quit making stuff.

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#29) On March 19, 2009 at 3:24 AM, fransgeraedts (99.93) wrote:

Dear GMXpert,

i humbly disagree. Even though i agree with many of the critical things you and others have said about china and its economy.

Yes, there was a china bubble...that is china stocks got widely overvalued. And yes as part of that bubble scams got sold to the unsuspecting public. I am tempted to say, what else is new?

There is however a big diference between the bubble in China stocks  ..and the reality of the underlying economy.

I would argue that the end of the bubble while negative in the short run, is positive thereafter  ..it is part of the painfull education of an investing public. Among other things the scams go belly up.

The same goes for the growth-recession they are now experiencing. That is healthy too. It will kill of businesses that are not competitive. It will bring a slew of stateowned and badly managed businesses to their knees.

So lets talk about the real economy.

1.Its biggest problem is that the state is still to much involved in key economic decision making on a micro-level.

2.Its second biggest problem is that that state is corrupt.

3.Third is that it is still not a democracy.

4.Fourth is the shortages in oil, water etc. that have always threatened the Middle Kingdom.

5.Fifth that there is always the chance of social unrest on a gigantic scale...even though long term that probably would be a positive.

However, there are big positives that in my view outweigh the negatives.

1. There exist now a deeply entrenched Chinese capitalism. That is flourishing state meddling not withstanding.

2. The Chinese culture has many elements that are very positive for economic development along capitalist lines. The three most important are a materialistic outlook, an entrepeneural spirit, an ethic of hard work.

3. Wages are still low, which makes manufacturing very competitive.

4. Productivity of labor is still low; it can be raised easily and fast.

5. Education is good in comparison to the wealth of the nation.

6.There is a gigantic reservoir of labor still to be developed.

7. There is a growing and booming middle class that produces a flourishing inner market.

8. There is enough capital to finance the necessary investment internally.

I am convinced therefore that china is (finally) on a growth path that is comparable to those of the other confucianistic societies ... singapore, hongkong, japan, south-korea. It is in the early stages of that path. And that will mean high growth punctuated by deep (growth-)recessions.

I am also convinced that it will finds it way to democracy. Even though it will not be easy and will take longer then i would wish.

fransgeraedts

 

 

 

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#30) On March 19, 2009 at 10:37 AM, FleaBagger (32.74) wrote:

Again, I did not read the rest of the comments before responding to this, so if I parrot someone else's, I apologize.

GMX (prior to correction): My argument is that a crippling shortage of cheap oil, fresh water, human rights, and currencies to sell their goods to will destroy them. What's your refutation?

A Freudian slip, perhaps? There is no reason to think that China keeping their goods and selling them to each other is any worse for them than selling their goods overseas for rapidly devaluing currency. So they invested a lot in the U.S. that will be a distant memory as an industrious, increasingly capitalistic people with manufacturing strength sheds the deadweight of the American/European borrower-consumer. Oil, fresh water, and even human rights are surprisingly easy to come by for a wealthy, economically free country. By trading our property rights for the illusion of economic safety, Americans have traded away the best defense of our human rights, and our level of the same will trade places with China's this century.

You seem increasingly jingoistic in your defense of America's primacy in the world, even as reasons to prefer America to China are evaporating (or switching sides).

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#31) On March 19, 2009 at 11:34 AM, MrSucrose (< 20) wrote:

GMX-

 

I agree with you.  They also have an old work force that is going to drag them down.

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#32) On March 19, 2009 at 4:30 PM, GVdrone (< 20) wrote:

Oil isn't a problem for their businesses/consumers, the govt substidizes it and the govt has plenty of cash. It doesn't cap industrial/consumer growth.

I'd say oil isn't a problem.

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#33) On March 19, 2009 at 6:40 PM, sentinelbrit (93.13) wrote:

With regard to your comment on your profile. The economy is not a great predictor of where the stock market is going in the short term - even in the long term it is questionable. I prefer valuation, sentiment, news flow (change at the margin). I think there is a good chance the market will trend higher (I'm in the Kass camp). I think MF should run a weekly survey of investor sentiment - I bet it would be a good contrarian indicator. I don't think I have read one person arguing that the rally can continue - everyone is still mistrusting it. I admit that I worry we'll have a big retracement of the gains, but I have some firepower left. I'm about 60% long.

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#34) On March 20, 2009 at 5:26 PM, goldminingXpert (30.70) wrote:

You seem increasingly jingoistic in your defense of America's primacy in the world

If you knew me in person, you'd realize how ironic that statement is. I can't stand America's government, am a proud libertarian with anarchist tendencies, and wish to emigrate as soon as it is feasible. That said, China isn't near the top of--or even on--the list of countries to which I would flee.

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#35) On May 04, 2009 at 1:16 PM, metoo105 (29.43) wrote:

You've gone overboard with the rhetoric, I imagine. But it should be obvious that China is NOT a third world banana republic. Your rhetoric there is precisely the kind of thinking that led to the overshoot of enthusiasm before. There is a Second World, and China is a member of it.  Use GDP per capita or something of that sort.

Next - human rights is only an issue as long as the people involved find it a problem. It's a bs issue that critics use to hammer China. Never mind that the folks in China are mostly pissed off about economic property issues. Give those displaced peasant Chinamen factory gigs, and they won't give a hoot what they can or cannot say in Tiannamen Square. But if they screw that up, then there's a collapse coming. The issue that kills me is constant harping on the free speech issue which makes me think that most reporters need to take a class on 1st A. law so that they could shut up and stop reporting lies about the US system of governance - WHICH THEY DON'T FRIGGING UNDERSTAND!!

You seem reasonable at times, but your rhetoric doesn't always seem that way. If you want to get into futurology, don't you think that the best you could say is that there's a 40% China's course ends in tears (or plows). That is, it's at best a probabilistic. But worse (for us anarchists) the world is pretty damn post-historical now that the global population count is 6 billion.

 

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#36) On May 04, 2009 at 1:55 PM, Alex1963 (29.33) wrote:

Hey GMX

I find your initial premise extremely weak but I do get the skepticism of China's continued growth/strength. I 'll look into the water issue too (good tip) but my guess is I'll end up finding a good infrastructure investment there positioned to capitalize on solving the problem. I respect your opinion and look forward to any dissenting points. 

I posted this on a similar blog and made some tweaks for your blog. 

China has a totalitarian Gov't and can make relaitively quickunilateral adjustments unlike all the other large economies.

China has a lots of room to grow their middle class and in standards of living in the lower class while still keeping the population "controlled". This may reverse as you suggest but IMO not before I can ride some stocks up. 

With this vast pool of some of the world's cheapest labor they can become the bargain provider of nearly anything you can name that has a market for export. Except maybe food.

They have massive fiscal reserves available with which they can aim their export economy at anything they like. 

With these reserves available they are well positioned to replace or compete with both the US, World Bank and the IMF etc as a political powerhouse. This can, is being, and will contune, to be leveraged in myriad ways.

Because they do not allow their currency to be traded they can, and do, manipulate their currency far more easily than other major economies and therefore have unmatched fiscal flexibility.

They have tremendous national brand loyalty not to mention the benefit of state support, backing and outright ownership of many of their largest, most successful and well positioned industries and companies.

They have the world's 3rd largest economy but only India can claim the same poulation or potential growth statistics.

China has a totalitarian Gov't and can make relaitively quickunilateral adjustments unlike all the other large economies.

China has a lots of room to grow their middle class and in standards of living in the lower class while still keeping the population "controlled".

With this vast pool of some of the world's cheapest labor they can become the bargain provider of nearly anything you can name that has a market for export. Except maybe food.

They have massive fiscal reserves available with which they can aim their export economy at anything they like. They are already locking up positions in many commodities and I bet oil will be another. Notice how little flap there has been altely here in the US and elsewhere over their impactful stake buying ofinto critical & sensitive industries. 5 years ago there would have been vocal & universal outrage.

With these reserves available they are well positioned to replace or compete with both the US, World Bank and the IMF etc as a political powerhouse. This can, is being, and will continue, to be leveraged in myriad ways.

Because they do not allow their currency to be traded they can, and do, manipulate their currency far more easily than other major economies and therefore have unmatched fiscal flexibility.

They have tremendous national brand loyalty not to mention the benefit of state support, backing and outright ownership of many of their largest, most successful and well positioned industries and companies.

They have the world's 3rd largest economy but only India can claim the same poulation or potential growth statistics.

(By the way India is still a representative Gov't and also hampered with terrible systemic political corruption. Those two factors combined hamper their ability to compete with China for superpower status. IMO)

They have a population with ingrained habits of saving & frugality. Any per capita income growth will be another potential growth/lending source for the economy especially if the  gov't can encourage the savers to bank their etra instead of buying gold, j ewelry etc. (this is a tall order, tho)

I believe they play a very long game and are obviously intending to become the superpower. To forge lasting ties and to market goods. I think they are perfectly willing to subsidize steel or any other export until they have ensured a wide "moat" advantage.  

So all in all I like the overall long and short term prospects for current and future China investments. And I don't see a bubble issue at this time. 

I believe they play a very long game and are obviously intending to become the superpower. To forge lasting ties and to market goods. I think they are perfectly willing to subsidize steel or any other export until they have ensured a wide "moat" advantage.  The success of an aconomy has many factors obviously and what I think China has is a huge political advantage.Many ways to parlay their increasing influence in the world into economic advantage.

So all in all I like the overall long and short term prospects for current and future China investments. And I don't see a bubble issue at this time. 

Good post rec from me

Alex 

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#37) On May 10, 2009 at 2:21 PM, Alex1963 (29.33) wrote:

Hey GMX

I'll check back here in case you do have time to reply. Aways interested in your analysis and rebuttals. Pardon the sloppy copying & pasting. I see now I didn't catch that a few points were double pasted but I did edit to specifically addresss your post.

I did follow up on your excellent water scarcity point & found some good info if you're interested. It doesn't strike me as all bleak tho they have a tough row to hoe, no doubt.

http://www.ens-newswire.com/ens/jan2009/2009-01-15-01.asp

http://www.chinadaily.com.cn/bizchina/2009-02/09/content_7455718.htm

http://whyfiles.org/131fresh_water/2.html

http://worldwatercouncil.org/index.php?id=25

This last one points out that the water cirisi is not confined to China, tho the consensus is that that they seem to be the country with the largest issue. We in the US will are facing major issues of our own. I've been researching some companies for investment in fact, since I saw a article in Inc "Blue Is The New Green".

Thanks & good luck with finals

Alex 

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