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What's the time line on this getting started? What's the best strategy for investing? Asset allocation? To be specific Near term: < 6 months Short term: 6 Mo

What's the time line on this getting started? What's the best strategy for investing? Asset allocation? To be specific Near term: < 6 months Short term: 6 Mos - 2 yrs Midterm: 2 years - 5 yrs Long term: 5 years or more what you're predicting here is in line with mine, but yours is way more well thought out ... and globally catastrophic. Where can money be spent right now as an investment?

gscott 7y ago
This may never happen 1. China is converting as much of there funny money Yuan into Gold as possible. This helps bolster the idea that China can pay their debts. https://bloom.bg/2I5TYME https://bloom.bg/2I5TYME 2. China monetary policy is run through banks. When a bank is to far insolvent they will make bad banks and put all of the insolvent loans into those. https://reut.rs/2WvG2zb https://reut.rs/2WvG2zb 3. When China has enough gold to give external investors confidence they can sell off half of their Treasury holdings, create the good / bad banks, and re-engineer the economy. Leaving foreigners on the hook. https://bit.ly/2H7zdxf https://bit.ly/2H7zdxf, https://bit.ly/2vOA1li https://bit.ly/2vOA1li, https://s.nikkei.com/2WgZRuD https://s.nikkei.com/2WgZRuD 4. The world wants cheap stuff. While foreigners will be unhappy they lost their investments they will keep buying from China and China will have a soft-landing from this upheaval. 5. China won't at that point be able to afford to buy any treasury bonds. The US Treasury will be forced to print money and inflation will go up along with various problems. This will force investors back into China because the US doesn't look like it is any better off then China is. It is a lot like someone who declares bankruptcy being able to get credit again pretty quickly. 6. To make sure productive members of China's society work China could make less productive members into caregivers helping to relieve some societal stress. 7. China's government owns part of a lot of private and public companies along with China Utilities. They can raise money by privatization like France has done. https://on.ft.com/2lN2x1F https://on.ft.com/2lN2x1F
- MR4D 7y ago
  Some responses: #1, China is going to have to buy a lot more gold. They only have about 1/4 as much gold as we do. And if they buy too fast, they'll push up the price, which hurts their currency. Not saying you're wrong, but there are limits here. https://moneyweek.com/499249/how-much-gold-does-china-have-a-lot-more-than-you-think/ https://moneyweek.com/499249/how-much-gold-does-china-have-a... #2 - many ways to deal with this, but it has to be in balance #3 - I don't understand your - can you elaborate? #4 - not at the cost of seeing their economies whither up and disappear. An aging demographic curve in most countries is already going to do damage - giving the rest of the country away won't help. We're already seeing increased protectionism around the world in different forms (e.g. the US with tariffs, the EU with regulations, etc.) One example is here: https://www.nwitimes.com/business/local/arcelormittal-idling-steel-mills-in-europe/article_e635ff12-b2d1-5380-b67c-18db0cdc099d.html https://www.nwitimes.com/business/local/arcelormittal-idling... 5 - Not all bad things are created equal. Check out this and read the text next to the graph titled, "China Population Growth": http://worldpopulationreview.com/countries/china-population/ http://worldpopulationreview.com/countries/china-population/ 6 - this doesn't work with an aging population. The demographic curve hurts (see #5 above)
mrtron 7y ago
Imagine you were able to find the magical instrument to bet on this event. Let's simplify and say its based on shorting both RMB:USD and these secondary foreign real estate markets. (the details don't really matter much for this argument) I first heard this IDENTICAL storyline in 2002. This magical instrument has been shit over the last 20 years. RMB:USD is suspiciously flat by design. Real estate in Canada as mentioned has skyrocketed. The long term bet you are proposing has failed 4 for 4. Your near term bet has failed 10+ out of 10+.
- ethbro 7y ago
  Aren't all macroeconomic short plays, by design, about timing? In other words, they all fail unless you can accurately predict when a drop will occur. Consequently you'd expect that even perfect short plays often fail.
MR4D 7y ago
I don't know yet - still working on the problem. A few ideas below. Cash (actual stuff you can hold in your hand, not the plastic stuff) in small denominations. A few thousand in 10's and 20's offers a lot of flexibility to deal with short term issues. US treasury bills. Dividend paying stocks, especially ones without a lot of global exposure. Not sure yet, but utilities might be good, but I haven't figured out the impact of interest rates which complicate that problem. I'm not a fan of gold. It's hard to hold, harder to spend, but if currency valuations fluctuate wildly, a bit might be helpful, but only the stuff you can hold in your hand - a gold fund might not help much, but that's a completely different discussion that I'm not qualified to offer a good opinion on.

gscott 7y ago

This may never happen 1. China is converting as much of there funny money Yuan into Gold as possible. This helps bolster the idea that China can pay their debts. https://bloom.bg/2I5TYME https://bloom.bg/2I5TYME 2. China monetary policy is run through banks. When a bank is to far insolvent they will make bad banks and put all of the insolvent loans into those. https://reut.rs/2WvG2zb https://reut.rs/2WvG2zb 3. When China has enough gold to give external investors confidence they can sell off half of their Treasury holdings, create the good / bad banks, and re-engineer the economy. Leaving foreigners on the hook. https://bit.ly/2H7zdxf https://bit.ly/2H7zdxf, https://bit.ly/2vOA1li https://bit.ly/2vOA1li, https://s.nikkei.com/2WgZRuD https://s.nikkei.com/2WgZRuD 4. The world wants cheap stuff. While foreigners will be unhappy they lost their investments they will keep buying from China and China will have a soft-landing from this upheaval. 5. China won't at that point be able to afford to buy any treasury bonds. The US Treasury will be forced to print money and inflation will go up along with various problems. This will force investors back into China because the US doesn't look like it is any better off then China is. It is a lot like someone who declares bankruptcy being able to get credit again pretty quickly. 6. To make sure productive members of China's society work China could make less productive members into caregivers helping to relieve some societal stress. 7. China's government owns part of a lot of private and public companies along with China Utilities. They can raise money by privatization like France has done. https://on.ft.com/2lN2x1F https://on.ft.com/2lN2x1F

MR4D 7y ago
Some responses: #1, China is going to have to buy a lot more gold. They only have about 1/4 as much gold as we do. And if they buy too fast, they'll push up the price, which hurts their currency. Not saying you're wrong, but there are limits here. https://moneyweek.com/499249/how-much-gold-does-china-have-a-lot-more-than-you-think/ https://moneyweek.com/499249/how-much-gold-does-china-have-a... #2 - many ways to deal with this, but it has to be in balance #3 - I don't understand your - can you elaborate? #4 - not at the cost of seeing their economies whither up and disappear. An aging demographic curve in most countries is already going to do damage - giving the rest of the country away won't help. We're already seeing increased protectionism around the world in different forms (e.g. the US with tariffs, the EU with regulations, etc.) One example is here: https://www.nwitimes.com/business/local/arcelormittal-idling-steel-mills-in-europe/article_e635ff12-b2d1-5380-b67c-18db0cdc099d.html https://www.nwitimes.com/business/local/arcelormittal-idling... 5 - Not all bad things are created equal. Check out this and read the text next to the graph titled, "China Population Growth": http://worldpopulationreview.com/countries/china-population/ http://worldpopulationreview.com/countries/china-population/ 6 - this doesn't work with an aging population. The demographic curve hurts (see #5 above)

mrtron 7y ago

Imagine you were able to find the magical instrument to bet on this event. Let's simplify and say its based on shorting both RMB:USD and these secondary foreign real estate markets. (the details don't really matter much for this argument) I first heard this IDENTICAL storyline in 2002. This magical instrument has been shit over the last 20 years. RMB:USD is suspiciously flat by design. Real estate in Canada as mentioned has skyrocketed. The long term bet you are proposing has failed 4 for 4. Your near term bet has failed 10+ out of 10+.

ethbro 7y ago
Aren't all macroeconomic short plays, by design, about timing? In other words, they all fail unless you can accurately predict when a drop will occur. Consequently you'd expect that even perfect short plays often fail.

MR4D 7y ago

I don't know yet - still working on the problem. A few ideas below. Cash (actual stuff you can hold in your hand, not the plastic stuff) in small denominations. A few thousand in 10's and 20's offers a lot of flexibility to deal with short term issues. US treasury bills. Dividend paying stocks, especially ones without a lot of global exposure. Not sure yet, but utilities might be good, but I haven't figured out the impact of interest rates which complicate that problem. I'm not a fan of gold. It's hard to hold, harder to spend, but if currency valuations fluctuate wildly, a bit might be helpful, but only the stuff you can hold in your hand - a gold fund might not help much, but that's a completely different discussion that I'm not qualified to offer a good opinion on.