Sat, Jan 24, 2015 - Page 8 News List


China economy built on lies

If China’s economy is booming at more than 7 percent annual growth as their government says, then why are so many business leaders leaving the country?

After Asia’s richest man recently sold off all his property in China as I reported previously (Letters, Sept. 22, 2014, page 8), he took his Hong Kong holdings and quietly transferred them to a new shell company in the Cayman Islands. As I queried before, what does he know that normal investors do not?

US real-estate agents are not bound by the anti-graft disclosure rules that affect other types of investors, which has led to booming property markets in California and New York, as rich Chinese squirrel their ill-gotten gains offshore.

More recently, the number of people from Hong Kong applying for permanent residency in Taiwan has zoomed into the thousands. If you are holding luxury property, now is the time to find some “greater fools” to sell to before the inevitable housing market crash.

In other news, former soldiers who were originally part of the UK army in Hong Kong are petitioning for passports and land ownership rights in Britain. They, like many others in China and Hong Kong, see the chalk drawings on the wall and are desperate to create a “plan B.”

Why talk about “one country, two systems” vis-a-vis Taiwan when China’s “one system” is creating a completely dysfunctional “griftopia” that benefits only select cadres? What kind of economy is that?

How can investors make proper decisions when China’s government flagrantly lies about their economic statistics? Even Bloomberg and Reuters are slowly catching on to the graft, money printing and mal-investment in China.

How can growth be so high when electricity production is so low? How can collateral-based loans for copper and iron ore still be repayable following the commodity price crash?

China’s economy is a house of cards built atop a wind-swept mountain of lies.

My intention here is not to disparage the editorial choices of one of the best English-language dailies in Asia. Instead, I would direct readers to the recent online Saxo Bank report titled This is the endgame for central banks to learn about the situation affecting global finance and where investors fit in.

The simplest solution to guard oneself against stupid governments, monetary policy idiocy, rampant money printing and increasing volatility is to become your own central bank. Gold and silver, in your pocket, represent true wealth preservation with no counterparty.

I wrote a poem about this:

It’s all gonna crash.

The center cannot hold.

Sell your stocks and go cash,

And then run out and buy gold.

Please remember that a bunch of morons are in charge of global monetary policy. Solving a debt crisis by adding more debt is insane.

Hopefully, Switzerland’s recent revaluation will increase sanity, but I would not count on that. After all, the Swiss voted down the gold referendum.

Investors, be your own central bank. Allocate at least 10 percent of your savings to any gold coins with a picture of the queen.

Do it now. Time is short.

Torch Pratt

Yonghe, New Taipei City

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