Bleeding Edge

Making Money has been easy in China for the last 30 years — yet now it has gotten easier…

Recent economic events in China have created turmoil in the global markets. Many economists believe that China is experiencing a financial and economic meltdown.

Yet in the eyes of experienced and long term China investors who are deeply vested in China — this apparent meltdown is nothing more than a popular narrative, perpetuated by the scare mongers.

After last week’s fever we are here again to report that China’s economy is still holding up reasonably well.

First, China’s economy is on pace to grow at 7 percent this year. Wage growth has continued to grow at a rapid pace, and more nonagricultural jobs have been created this year than ever before.  These are strong growth indicators and thus I do not believe that these data points are consistent with an economy heading for a hard landing.

Second, many economists believe that the economic decline in China’s industrial sector is a sign of a slowing economy. This is a far too simplistic explanation because for the past three years, China’s economy has been moving away from the industrial sector, with the services sector driving the economy forward.

Third, economists believe that the debt burden incurred by China in recent years has thrown the country into a financial crisis. This couldn’t be further from the Truth because, after China’s modest depreciation of its currency earlier this month, there has been no substantial change in the exchange rate between the US dollar and the renminbi.

Lastly I see that the yuan/renminbi is holding strong against the US dollar…

And this is a clear sign that the country is not in the midst of a financial crisis.

Shaking off the fluff and fleecing the birdies is not a meltdown — it’s just course correction work.

Live with it or get out of margin.

Aren’t emerging markets fun?

Yours,

Dr Kroko

PS:

As for the fear sellers, the margin holders, and the chicken-littles crying that “The Sky Is Falling in China” we deeply regret their precarious psychological condition; but they must see their crying out loud need for strong Freudian Therapy.

After many many years of couchsurfing while speaking to stern men wearing hipster glasses, beards, and pipes — they can rejoin the fray.

But until then — please take your Meds gentlemen and shut the Fvck up; cause you know nothing about China.