Chinese stocks >>> US stocks

Discussion in 'Trading' started by detective, Dec 3, 2007.

  1. I know what everyone is thinking and I have been a skeptic of the Chinese stocks for quite some time but there is going to be a continued rotation out of developed world stocks and into developing world stocks, in particular China. I don't see this force being stopped anytime soon, and it is actually going to be one of the downfalls of America.

    Prosperity in China is not good for America. Why? Because the amount of resources in this world are finite, and capital is theoretically infinite due to fiat currencies. The actual wealth of developed countries as measured by the amount of energy used and material wealth will go down as China takes their share of the pie. It is a zero sum game when the world is bumping up on its limits for both energy and natural resources. The only way this gets resolved is through a global recession and China will fare much better than the US in the next global recession. They will take massive share away from the US as their cost of labor is much lower given nearly the same infrastructure.

    The only thing that will save US stocks is high inflation, which will keep stock prices up due to the greater supply of dollars.