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December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Feb. 10, 2005 / 1 Adar I, 5765

Why are the Chinese moving their money out of China?

By George Friedman


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http://www.JewishWorldReview.com | Once in a while, I run across statistics that seem unimportant at first, and then suddenly appear amazing. The Chinese government announced this week that Chinese investment overseas rose by 27 percent in 2004, to $3.6 billion dollars. Contracted investment — investment that has been agreed to but has yet found its way overseas — rose by 77.8 percent in 2004.

That seems like a statistic to yawn by, until you think of this: China's economy grew last quarter by over 9 percent. Everybody is talking about China's economy as unstoppable. U.S. investment bankers are scurrying to get their clients into China. Therefore, why would the Chinese be moving their money out of China? If all the forecasts are correct, and I lived in China, the only place I would be investing is at home.

There are two rules in investing. (Actually there are a lot of rules, most of them contradictory, but these two look good.) First, do what the insiders are doing. Sell when they sell. Buy when they by. The second rule is to never buy at the top — and you can tell the top when people who have no business investing are investing and the valuations become insane.

We said it was time for a recession in February 2000 based on two things: Yahoo had developed a larger market capitalization than General Motors, and my wife's hairdresser had gotten seed money from a venture fund for software for scheduling beauty salon appointments.

Last week I received a spam e-mail from a group telling me that it wasn't too late to invest in China and they had several exciting opportunities they wanted to discuss with me — or anyone who'd listen. When the e-mails for enhancing various functions become mixed with e-mails for not missing the last boat to China, it is time to be careful.

China has been growing at an extraordinary rate for almost 30 years. Of late, its growth has simply been preposterous. The "new economy" hadn't abolished the business cycle and neither has China. Certainly, China is an extraordinary place and it may well have an extraordinary future. However, the idea that it can continue growing at these rates indefinitely is absurd. Growing for as long as it has increases the probability of a reversal of fortunes.

There are, in fact, very serious problems in the Chinese economy. The most important problem is its bad debts, which even the Chinese officially admit to being about $150 billion and which is probably much higher. This in turn reflects the fact that capital is not allocated on a market basis in China, but rather politically, based on who you are and whom you know. China is filled with enterprises, state-owned and otherwise, that loses money but are kept afloat by bank credit.

That credit is not nearly as available as before because of the weakness of the Chinese banks. As credit tightens, business failures will increase. Right now, China is surging exports overseas to keep the cash coming in, but it isn't clear that the country is making money off those exports. It's running fast to stay in the same place. A 9 percent growth rate doesn't mean anything until you find out whether the country is making money off that growth rate. I can grow anything quickly if I sell at or below cost. China is not the first Asian economy to be in this condition. Japan went down to the same disease in the early 1990s, and East and Southeast Asia went down in 1997.

China is late to the game and late to the disease. It is interesting that Japan and East Asia had the same disease. They all had mountainous bad debts and a banking system that was nearly crippled, massive exports that were not particularly profitable and capital flight, where Japanese, for example, bought everything and anything so long as it wasn't in Japan.

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Interestingly, the media gushed over Japan in 1990 and Asia in 1997 the same way they are gushing over China now. They misinterpreted cheap export surges as healthy and the flight of capital out of these countries as a sign of strength. The same thing is happening with China. And like Japan and Taiwan, China has huge dollar reserves — yet which are not used to fix the unfixable financial system.

Between the dogma that China is a sure thing, people trying to invest in China who have no business investing in China, and a complete indifference to any facts that indicate the contrary, China looks as toppy as NASDAQ did in 2000. This is not knocking China. It has put on an impressive show and will be a major player in the future.

But everything needs to cool down, and the longer you wait, the more chilling the bath.

Every weekday JewishWorldReview.com publishes what many in Washington and the media consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

FRIEDMAN'S LATEST
"America's Secret War."  

Friedman identifies the United States' most dangerous enemies, delves into presidential strategies of the last quarter century, and reveals the real reasons behind the attack of September 11 and the Bush administration's motivation for the war in Iraq. Here in eye-opening detail is an insightful picture of today's world that goes far beyond what is reported in the news media. Sales help fund JWR.


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George Friedman is chairman of Strategic Forecasting, Inc., dubbed by Barron's as "The Shadow CIA," it's one of the world's leading global intelligence firms, providing clients with geopolitical analysis and industry and country forecasts to mitigate risk and identify opportunities. Stratfor's clients include Fortune 500 companies and major governments.


02/03/05: Next Pope could, and maybe should, be a Third-Worlder
01/27/05: Decision-day in Iran: Is it for or against United States?
01/14/05: Russia's missile sale to Syria gets back at U.S. over Ukraine
01/06/05: Tsunami realities: Most in need are least likely to get help


© 2005 TMS