Hot Commodities by Rogers Jim;

Author:Rogers, Jim;
Language: eng
Format: epub
ISBN: 9781119048763
Publisher: Wiley
Published: 2014-09-29T00:00:00+00:00

THE UPSIDE OF THE DOWNSIDE

China will stumble along the way, but those 1.3 billion-plus consumers aren’t going away. The Chinese will be back saving their more than 30 percent and investing it. Millions of homegrown entrepreneurs will be looking for ways to get rich. People in the countryside—and those 300 million heading to the city—are bound to covet goods that their city cousins enjoy, such as electricity, running water, cell phones, computers, and labor-saving devices. Only 4 percent of the people, in cities as well as rural areas, have cars. Not even the Chinese can create steel or iron ore or copper or sugar or soybeans out of nothing. They will have to buy stuff, and that will give another boost to commodity prices.

The U.S. had several serious setbacks as it rose to power, glory, and riches. In 1907, for example, Wall Street’s and the U.S. Government’s finances collapsed—just as U.S. dominance of the twentieth century was about to begin. Japan is the great success story of the past 60 years, yet in 1966, just as it began rising as the richest country in the world, Japan’s entire financial system collapsed. Selling investments in the U.S. or Japan owing to setbacks would have been a serious mistake. And should the Chinese slip, by the time they recover the Communist Party will be a relic. The capitalist genie has been too long out of the bottle. Those girls in Shanghai shopping at Armani and the local fat cats driving BMWs and soon Cadillacs care little about the Chinese Communist Party. The last demonstration I read about in Tiananmen Square involved a group of property owners complaining about getting ripped off by developers. The only Party slogan that young and ambitious Chinese are likely to utter is that line from the Deng Xiaoping years: “To get rich is glorious.” When foreign entertainers tour China, one of the provisos is “Relevant departments will carry out strict reviews of performance clothing.”

Talk about losing battles. Decades ago, hard-line Maoists warned that you can’t separate foreign investment from the “poison” of capitalism and dreams of “bourgeois freedom.” They were right—and the unintended consequences of China’s capitalist turn are still hard to imagine. The smart investor, however, will be paying close attention for opportunities to cash in on China’s excellent adventure in capitalism.

For the time being, the best way is to buy commodities—and particularly during times of correction and consolidation.

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