China Is Where You Should Be Investing
Recently I received an interesting newsletter describing why China is where you should be investing…I have edited the newsletter to focus on the main story…
America’s biggest benefactor—the Chinese government—is about to pull the plug on the U.S. markets. The giant sucking sound you hear will be what’s left of your wealth going down the drain! If you don’t reposition your assets now, the shockwave could wipe out what’s left of your wealth.
Here’s why…
The banking crisis, the liquidity squeeze, and the collapse in home prices has sent China fleeing U.S. stocks as if being chased by the running of the bulls in Spain.
They hold trillions in U.S. debt that’s worth less and less every day. Their investment in Blackstone is down 84%, not to mention the shellacking they’ve taken on Morgan Stanley. Across the nation, China investors and workers are “mad as hell” as they see layoffs mount as China Investment Corporation executives are attacked in newspapers and blogs across the nation.
And the Chinese government is listening carefully. They know more than any other nation that financial instability can lead to political instability. Which is why they are taking their money out of U.S. Treasuries and using their trillions in cash reserves to corner the oil markets while prices are low and the returns are much greater. Why, in the last 30 days, $39 billion earmarked for U.S. Treasuries were diverted to buying huge stakes in Russian, Brazilian and Venezuelan oil companies. At the same time, they lent Brazil $10 billion in return for a pledge for 160,000 barrels of crude per day.