Hi ild,
The bubble migrates, travels, and generally gets passed around. Our job is to track it, use it, and then abandone it, before the riot starts.
Generally agree, except about the Olympic bid.
<<The huge income gap between coastal China and Taiwan or Korea evidently cannot be justified by differences in infrastructure, technology or education.>>
I add, nor political system or corruption level.
<<We have argued that Korea and Taiwan have to converge toward either Japan or China ("Living with Revitalized Giants", September 18, 2000). Japan has intellectual property and consumer brands. China has scale and low cost. The past export successes of Korea and Taiwan were due to a strong yen and belated economic development of China. The core of the Taiwanese and Korean economies is mass production. Their success depends on 1) inexpensive labor, 2) low-cost capital, 3) good infrastructure, and 4) management expertise in manufacturing. China now has all four.>>
Yup, this is also what I see, except that the vast majority of improvements in China is still in the future. The monster is big.
<<With both China and Japan becoming "normal" economies, Asia/Pacific is experiencing the ultimate mean reversion. Can one argue that living standards in coastal China should be so dramatically different from Taiwan's or Korea's? If the answer is no, it would carry huge implications for investment strategies. More and more businesses are evidently reaching the same conclusion: They act with their money. In the first quarter, the unaccounted capital flow in China's balance of payments turned to a positive US$16 billion, the first time since 1996. Between 1998 and 2000, unaccounted money totaled over US$100 billion in outflow. Money is creeping into China, not out.>>
I think gold and platinum, physically smuggled in, is good, and I think helping the bigwigs learn how to get atleast part of their money out, is also good.
Chugs, Jay |
