Two words...China...and...Liquidity... And in conjunction with that, the fall of the US as the world's economic superpower.
China is projected by Goldman Sachs to become the dominant economic superpower by 2050, with a GDP approaching $50 trillion. (versus projected $33 trillion US GDP, and $38 trillion for India) That's trillions, with a capital T. Haven't we heard ad nauseum on this thread how trillions trump billions?
While many on this thread argue about the relative merits of gold and whether it has topped or is in secular bull market, the indisputable secular economic trends related to China probably offer a more favorable risk/reward ratio over the next 10-20 years.
How many times have we also read on this thread that many are doomed by their own DNA, as a result of our inherent hubris and greed? Similar to the hubris that led to the downfall of the British Empire, a case can be made for the same thing happening to the US.
Mark Twain once said, history does not necessarily repeat itself, but it does rhyme. Five hundred years ago, China was the world's dominant economic power, and it is likely to regain that superiority. Who was it that said the only thing we learn from history is that we learn nothing from it?
I continue to enjoy this thread for its animated and intelligent discussion, but I eschew gold as an investment, opting instead to continue placing very large bets on China and anything else which will benefit peripherally.
You make money by anticipating the anticipation of others. One thing I am anticipating is that the dot com bubble will be dwarfed by the mania that will eventually occur in China. (one could argue that what is happening on the Shanghai Exchange already constitutes at least an incipient mania)
In a country where ninety thousand new brokerage accounts on a daily basis don't even make a dent in the massive Chinese population, (and combine that with the proclivity for gambling in the Chinese culture) who is to say that this won't become the mother of all parabolic spikes?
Got tulip bulbs?
J. Arena |
