Inflation in China -
"I believe planet-wide inflation is way up and will show through, not in Chinese manufactured goods prices, or India provided services, but in just about everything else;"
I will take the opposite side of that - I expect there will be modest real inflation in China, as most of the 'low hanging fruit' has been picked and building the next factory will cost a little more.
This inflation (or absense of deflation) will spread to factory prices, wages, property values etc.
Factory owners will see their tight profit margins expand. Wages will start to rise for speciallists, then middle classes, and factory workers. Farm prices will also rise a bit.
This will make life less of a struggle.
With profits and wagers rising, there will be a growing domestic market, in addition to foreign investment for export. These trends will feed on accelerate each other.
High profits AND unit growth in China + possible currency appreciation will make China a 'must have ' investment allocation.
I expect the overall China stocks, excetpt tech to double or triple in about 3 years. That means 30-50 % growth .
I have recently bought CHN, the closed end fund, and will be buying more. The China energy companies will also do well.
So I will predict 5-10% real growth for China for the next five years (maybe more), PLUS a little inflation - meaning pricing power - leading to 20-50% growth in profits, and even higher increases in stock market asset values.
Don't know how closely India will follow China - leadership , historical, cultural differences - but I expect a big positive move in India also.
Have not figured out where this will leave Japan, Korea, etc. or Phillipines, Indonesia, Malaysia. Or Russia, other than having a big market for their oil.
So I expect the excess worlwide liquitity will push of prices of China investments. |
