Jay, I like it when we agree. It does make me nervous though. I suspect I'm in a dumb herd when we all noddingly head off in the same direction.
Way back in May 1999 I was saying it was time for the big crunch, the dramatically cut interest rates and the printathon marathon around the world. I am amazed that it has taken so long to get to where we are [4 years]. I am also surprised how low things went and how slowly markets clear. I am not convinced there has been complete tidying up yet. Not at current interest rates.
When US$ interest rates are back up to 5% or thereabouts, I'll consider that the storm has passed. They are still cutting for goodness sake [which seems a quaint and somewhat archaic phrase in the context].
<Buy gold, sell dollar, and on LT basis, stay away from the Yuan, for it will crash against the dollar when China cranks up the printing press to wash away its own social security and banking sins.>
The dollar and yuan must level up as wealth increases in China and people are not prepared to work for $1 a day any more, or even $50 a day. China has got a great opportunity to print themselves huge piles of yuan, which they can sell to companies wishing to invest in China. Because of the burgeoning China economy, they can go on printing yuan and selling yuan for years at umpty $billion a year, without causing inflation as measured in yuan in China.
If the yuan is as undervalued as people seem to think, then it's obviously time to sell dollars to the yuan sellers and use those yuan to buy stuff in China. I haven't personally checked that this urban myth is correct, so I haven't done so yet. I suspect that maybe the yuan is not that far away from a fair price.
I suppose I should sell $, buy yuan then buy gold in China. Then cart it outa there back to NZ and hide it under the house. Somehow, I can't imagine such a simple scam would work. There must be a gold export barrier. That's a bit tricky though, because gold hides easily in a hollowed out shoe. I could nickel plate some gold golf clubs and zip that through the lines.
I've got US$. Yuan are half price. There must be something I can do to help even the balance.
Mqurice |
