Monday, July 20, 2009

China - What are they saving up for?

I remember when I was a kid, I used to get a weekly allowance. I used to spend it as I wished. But when there was a specific reason, I would save my money towards the larger purchase. Like Nike Air Jordans, roller blades, etc.

So my question is simple. What is China saving up for? I fear the answer...

1 comment:

  1. Here is the answer - according to John Mauldin:

    "In the card game called Old Maid we played as kids, the loser was the one who ended up with the "Old Maid" at the end of the game. For the past decade, the Chinese sent us "stuff" and we sent them dollars in the form of electrons. They in turn invested those dollars in our debt so we could buy more stuff. It was a form of vendor financing.
    And now the Chinese have apparently decided to pass the Old Maid of the dollar on to other parties, who will sell them their assets for dollars. Seriously, did anyone not think they would do this? Massively selling the dollar, which so many conspiracy-theory types keep saying they will, was never really a rational option. But using those dollars to acquire productive assets? Very smart, very rational. If you figure out what they want to buy and get there first, there are profits to be had. Attention should be paid."