Hi tradestrong, I have to differ. The dollar is primarily bought because of the deleveraging. Excessive supply of money being drawn out the system has to be bullish for the dollar. Same thing with the yen. Private equity relied on leverage. It is broken now. Repatriation from emerging markets is another reason. If you look at the Chinese bond market (though a very small one compared to the US, the government didn't have to borrow much), you can see the yield isn't abnormally higher than the US. In fact, 10yr is trading at 3.21, that's 8bps less than the UK, and about 12bps higher than Germany. So in terms of sovereign security it is OK, at least in bonds. Come back to the demand side of western consumers. Export is falling fast. That is correct. And China has built up over-capacity over the years. But it has been trying to address this problem since 2006-07 by jacking up rates. Unlike the US, there is not a housing bubble in China. If you look at a few big cities yes there is. But if you look at China overall there isn't one. In a lot of places house prices has gone up 50% whereas income has gone up 100%. (Read it somewhere but I don't have the sources, and I made up the numbers but it's something like that) Domestic demand is still strong. I want to point out that, and a lot of people forget about this, China has a very high savings rate. Demand could quickly pick up when people realizing the money isn't paying them interest in a bank and start spending. When you get 20% growth in vehicle sales, that's hardly a demand shock, yes? China has its problems but at the end of the day, who am I to say that Chinese market is going to fall? After all our job is to buy what goes up and sell what goes down. So far the market has been cooperative. The investment bankers who lost money are talking deflation; while people like Soros, Rogers, and John Paulson are talking inflation. I don't generally take advice from people who lose money. There is going to be inflation down the road and it's going to hurt the dollar, whether you like it or not. When? I don't know. I wish I know but I don't.
If countries or corporations do not invest in their internal industry or infrastructure, how are they supposed to become wealthy? Oh it's simply really, they will simply tell foreigners to buy US debt at an accelerated rate for eternity, and print money based on those foreign losers holding US assets. The US purchasing power was not historically this high, you are obviously ignorant of that fact. I would tell you to obtain a GED, but apparently you would not even be qualified.
BTW Having a huge reserve during this crisis has to be a major advantage, yes? Simple finance, debts are more expensive in an deflationary enviroment. Yet it is something the US is accumulating at a rapid speed. Just take a look at the 5yr auction this past week. The tail was 5 basis points. 1bp in the 5yr paper is 1-1/2 over 32. So 5bp is 7 1/2 over 32. Let's make it 8/32 for ease of calculation. So for every million paper they sold they paid an extra $2,500. They sold $34 billion, which means they paid $85,000,000 extra for a 5yr paper. Debt is not wealth. It has to be paid back. If you're printing $1 trillion dollars a day people will not want dollars.
why would anyone post such things in a public forum? This is who I'm competing with in the market. Will he take my money or will I take his?
Nice move for the stocks I mentioned. Now it's time to look for small stocks that will be manipulated by people with some money. They can with tiny/small float. ASIA: sold today and will watch to trade again. CPSL: stell. Steel in general is a good sector to trade now. I mentioned X in another thread when it was about $18. ESLR: solar stocks have been doing well. These stocks at one time were a lot higher. STP is not china but a rule breaker (Motley Fool). Good news lately.
CYOU : a spinoff from SOHU. Very good fundamental. New IPO. Has a lot of potential, Just like buying SNDA NTES at the beginning.