Rodgers keeps thinking China can survive without a strong USA. Yet 60%of china exports go to the USA. If Usa weakens it will breakdown the whole china society, may cause the fall of the communist govt. Look at the chaos of the workers just trying to get home for the new years
the deal that came out of Tiananmen Square was a let up in the capital structure but no let up in the political structure... how long that deal will be tolerated is up for debate.... Adolf and Benito were children of busted economics....
Normally high inflation destroys real estate, what do you think the effects will be on NYC real estate ton of tourism etc... does anyone think that it can have inverse effect there??
Also, a sizeable amount of exports go to Europe...who will for sure suffer if the US economy tanks. It is a global economy. What I liked was that Rogers admitted the Chinese ecomony may also tank, and he addressed the problem with the yuan. It is the century of China, but looking back over the past century, the US also had major obstacles i.e. 07 banking crisis, and the great depression....so it can happen in China. :eek:
China has a billion person population with an exponentially growing middle and upper class. A lot of the loss from exports can be made up internally.
I was ahead of Julian. I was doing this trade back in September 2007. Here's the link on how I did it (with some pointers from a couple knowledegable traders help on this board): http://www.elitetrader.com/vb/showthread.php?s=&threadid=104318 To do it right takes a lot of dynamic balancing buying/shorting 2yr and 30yr bond futures in order to neutralize the convexity risk, but I essentially did a naive version and held it for 5 months (w/ one roll in November): buy 4 2-yr globex zt futures and short 1 globex zb futures. This is not financial advice. You may or may not withstand the volatility of the trade. Just keep in mind that the curve steepener is very much positively correlated w/ shorting equity futures, or long yen futures, or long dollar index. I understand Julian's enthusiasm for the trade, but it is simply a variation of "bet against dollar-denominated asset" trade.
Never really followed Jim. I think he is spot on. I am still short from the "Spike" after Feds and two days prior, shorted heavy in to the fed run.. A little un-easy and did not add more on Friday. But did not cover either. Not sure if I can sustain a 200 point run up, but I will try. I think the market wants to put on a short squeez before it tanks again. However, the Job numbers were not good. Oil has come in some, but the bad news on the "Liquidity Crises is far from over". I may have gotten heavy short to fast. But that is easy in hind sight.
And why do you think there are so many migrant workers trying to get home from everywhere for the new year? It's a sign of the rapid growth of the chinese economy, where just 10 years ago, most of these workers worked at their small town/village, now basically only the children and elderly are left in those small towns. Everyone else has moved to the new development zones that's spawning up everywhere around the cities. There will be big shortage problems when the rapidly expanding chinese middle and upper class start to consume the "luxury" goods currently been exported to other countries. Big money if you can make the right bet in commodities.
Forgive me guys, i know this belongs in Politics and Religion, but i just can't help remarking that Julian Robertson may be in big trouble with the fiscally more responsible democrats moving into the Whitehouse. We could, after all, provide a liver transplant for every American over 65 for less than What Mr. Spend and Borrow's wars will cost us!
Jim Rogers could care less about talking up his shorts. He is one of the courageous few who is willing to speak in the media about the destruction being wrought by the Federal Reserve and perpetually spendthrift governments. He provides great relief from the perma-bull nonsense which is found in most media outlets. The current economic/monetary order is an historic anomaly and probably unsustainable. I think he actually cares about what is happening in America. He knows that he is powerless to change it so the least he can do is warn the masses.