Importance of International Diversification
by Simon Black: Vast
Business and Investment Opportunities in Mongolia
the last few days at a Chinese offshore strategies symposium here
in Shanghai as a guest of the conference organizer. Its been
a fabulous event, full of camaraderie and relationship building,
all set in one of the Pudong districts finest hotels.
the overall good vibe lies a very somber goal. There are no illusions
here about whats going on in the world. No one is trying to
spin a good news story about bankrupt, insolvent western nations.
And, surprisingly, prominent Chinese economists were even critical
of Chinas own long-term economic prospects.
speaker yesterday morning railed against Chinas quantitative
easing measures. As a percentage of GDP, Chinese money printers
make their American and European counterparts look like pithy amateurs
trillions have been conjured out of thin air, most of it
ending up in the housing sector.
the Chinese didnt learn much from the US property bust; theyve
made precisely the same mistakes, and its starting to have
serious effects on the broader economy.
speaker after speaker acknowledged the massive insolvency issues
that await the United States
and further argued that Greece
is just the beginning of Europes problems.
the thing about governments going bust its been happening
for centuries. Default is nearly as old as the concept of the sovereign
bond itself, and history is generous with examples.
Spain has defaulted
15 times since the 16th century. Greece has defaulted 5 times since
the 19th century. Portugal has defaulted 7 times since the 16th
happening right now is nothing new. Neither is government response.
You see, when
governments get deeper and deeper into debt, their options start
to run out. They become desperate, and history shows a common pattern:
impose capital controls. They compel individuals and businesses
to repatriate funds from abroad, or prevent them from moving new
funds overseas. This is happening in several countries right now.
Argentinas fascist president Cristina Fernandez just ordered
oil, gas, and mining exporters to repatriate all export revenue
back to Argentina. This was her very first presidential decree after
winning re-election just days ago.
thing theyll do is direct capital into government bonds. Pension
funds, central banks, commercial banks, private corporations, and
even individual investors will be forced into the safety and
security of government debt. That means YOU.
This is also
happening all over the world right now Hungary, Ireland,
the rest of the article
October 28, 2011
© 2011 Sovereign Man
Best of Simon Black