Hey R,
Regarding J.R., whom you mentioned, here's a little excerpt from his interview with "InvestorWEB, for the Thinking Investor" [....which, of course, excuses the denizens of the Thread of the living Dead, For the Serious(ly disturbed) Investor....]
Rogers: The Soviet Union is on the edge of change: catastrophe and collapse. That's one of the reasons I'm bullish on raw materials. Everything is caving in and there will be massive civil war and localized civil wars. Meanwhile, they won't be able to sell all those natural resources to prop themselves up as they did in the '70s and '80s.
Other places where there is massive change? Throughout Africa, Latin America, China. Africans are all becoming capitalists, fast. In Latin America they're starting free trade zones, tearing down the regulations and controls. They hope that we'll be in these someday. I do, too, but you can't count on Washington to get it right.
GNL: I don't question that socialism is dead and economies are becoming freer, but in some countries certain social attitudes stand in the way of those changes. Which countries will best take advantage of change?
Rogers: There are social attitudes that oppose everything. During the Revolution there were Tories here who said we don't want to leave England. They resisted the winds of change and they went broke.
Where will the effects will be biggest? China. It will be the richest country in the 21st century, the "Century of China." It's got major problems right now.
GNL: I don't remember the exact Chinese per capita income, but $450 comes to mind. From $450 a year to the per capita income of the U.S., say, $24,000 a year, is a big jump. People don't just need better jobs, they have to put in bus stations and sewage lines and electricity distribution and telephones and faxes, etc., etc.
Rogers: That's why they're going to be rich. They're going to be building infrastructure while we're spending our money on welfare payments and tanks, neither of which increase future productivity.
Let's say your numbers are approximately correct. By 2020 - 2030 China will have the largest economy in the world, not the highest per capita income. All you have to do is extrapolate from here. They'll have a major set back or two, but so will we. China will have its problems, but capitalism has been exploding there since 1979.
If I had told you in 1900 that in 40 years the U.S. would be the richest country in the Western Hemisphere, much less the world, you would have called me nuts. Argentina is the richest country in the Western Hemisphere, that's where you should go, not to the United States. Well, Argentina was, but things changed pretty dramatically.
The U.S. was a huge debtor nation in 1900, but the money was being spent on highways, canals, railroads, factories, and we got a massive payoff in the 20th century. That's what's happening in China. We're broke, they're not. They've got gigantic foreign currency reserves at the moment, we're a gigantic debtor nation.
Other trends in China will make them rich. There's a great political and economic vacuum developing in Siberia, with gigantic natural resources in Siberia, but no labor and capital to develop them. China has all the labor in the world, desperate for natural resources, needs capital. Japan has all the capital in the world, desperate for labor, desperate for natural resources, so Chinese labor will move into that vacuum (this is already happening by the way) to develop those natural resources. As America had the Far West, China's got Siberia to relieve its social and economic tensions.
The Chinese also have another advantage over many other parts of the world: the overseas Chinese. There are millions of them, and they have expertise and capital to invest in China. We had the English in the late 19th Century, they have the overseas Chinese.
Regards,
John :-)
ps: Ooooops! There, I went and did it again. Like old Lou Costello, "..I'm a ba-aa-aa-ad boy.."!! |
