End of the China bull?

[warakawa]

Btw, if you are a Chinese, why are you using a Japanese-sounding name?

There are many Chinese, Korean, Vietnamese, Africans people in this world that use European sounding names. What's your point? Must I put Ding, Chang, Xiao, Zhang, Wang, Li or Guang in my name to prove my ethnicity to you?

 

[warakawa]

I'm pretty sure its going to have a crash mate. It just looks to much like a credit induced construction/housing speculation boom at the moment. They have the negative real interest rates and everything.

well let me know when that happens yah, so I can sell all my mining stocks.

 

[alphaman]

Chinese labour cost is rising, but there are still cheap labour in other countries. A China crash will certainly have a short term effect on XJO, but I doubt demand for Australian dirt will crash.

 

[tothemax6]

There are many Chinese, Korean, Vietnamese, Africans people in this world that use European sounding names. What's your point? Must I put Ding, Chang, Xiao, Zhang, Wang, Li or Guang in my name to prove my ethnicity to you?

No it was more a question stemming from the anti-japanese sentiment which my chinese mates have.

well let me know when that happens yah, so I can sell all my mining stocks.

I have started a thread about this very thing (in general investing section) .

Chinese labour cost is rising, but there are still cheap labour in other countries. A China crash will certainly have a short term effect on XJO, but I doubt demand for Australian dirt will crash.

It will smash demand for australian dirt.

 

[GumbyLearner]

well let me know when that happens yah, so I can sell all my mining stocks.

I disagree with your analysis warakawa. YOU should let me know when the average Chinese investor is short gold/silver, difficult to extract metals eg. antimony,tungsten, graphite, moly, rhenium and of course rare earths etc... So then I'll dump them . Chinese real estate is completely irrelevant to my investment portfolio plan for the next 10 years. Just my opinion. This is not financial advice.

But at present I'm long Agriculture especially wheat. There were problems in the winter of 2009 and now many parts of China that grow wheat haven't had a drop of rain since September 2010. Bring on the nine mile snipers shooting into the clouds in the hope that it may change the situation! Not to mention all the Ag tariff barriers that operate worldwide these days.

DYOR

 

[tothemax6]

I disagree with your analysis warakawa. YOU should let me know when the average Chinese investor is short gold/silver, difficult to extract metals eg. antimony,tungsten, graphite, moly, rhenium and of course rare earths etc... So then I'll dump them . Chinese real estate is completely irrelevant to my investment portfolio plan for the next 10 years. Just my opinion. This is not financial advice.

The issue is that the construction boom accompanying the real estate bubble draws in huge amounts of resources. We are supplying much of these resources.

Btw how are you long wheat? CFD?

 

[GumbyLearner]

The issue is that the construction boom accompanying the real estate bubble draws in huge amounts of resources. We are supplying much of these resources.

Btw how are you long wheat? CFD?

RJA & a whole bunch of beings that need to eat, including us humans.

Here's a one year chart to CLICK ON

http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined

 

[Uncle Festivus]

China's ghost cities, again, more confirmation of the unsustainable 'made to order' centrally dictated command economy - what a bust it will be................and we will follow?

http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

REPORTER: Is China experiencing a property bubble?

GILLEM TULLOCH, FORENSIC ASIA: Absolutely. A property bubble like which I don't think we've ever seen.

REPORTER: Bigger than the one in the United States?

GILLEM TULLOCH: Yes, I think it will make the United States pale in comparison. It is said that there are 64 million empty apartments in China.

REPORTER: 64 million?

GILLEM TULLOCH: 64 million.

 

[CamKawa]

China's ghost cities, again, more confirmation of the unsustainable 'made to order' centrally dictated command economy - what a bust it will be................and we will follow?

http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

REPORTER: Is China experiencing a property bubble?

GILLEM TULLOCH, FORENSIC ASIA: Absolutely. A property bubble like which I don't think we've ever seen.

REPORTER: Bigger than the one in the United States?

GILLEM TULLOCH: Yes, I think it will make the United States pale in comparison. It is said that there are 64 million empty apartments in China.

REPORTER: 64 million?

GILLEM TULLOCH: 64 million.

Interesting. Thanks for the post.

 

[tothemax6]

Yes, its going to end very badly. The IMF are complete quacks with their '8% growth for the next 20 years' outlook on China. Just shows you how clueless these people are.

For this reason I have stayed away from anything China is importing a lot of, i.e. companies with exposure to coal, iron ore etc. However, this is merely to reduce the size of the loses that will ensue if I do not spot the burst in time. Pretty much any Aussie stock, and many international stocks, will be hammered when the China 'growth' story is revealed for what it is: a crack up boom fueled by credit expansion and government stimulus.
Good luck to them with the latest 5 year plan .

 

[isplicer]

^ WHen do you think our mining stocks such as RIO and BHP will start getting affected, if the above is true?

 

[Uncle Festivus]

^ WHen do you think our mining stocks such as RIO and BHP will start getting affected, if the above is true?

They should be benefiting big time from the terms of trade but alas for the exchange rate killing that golden chook? It's not showing up in record highs for their share prices ie flatlining?

As long as everyone understands that what is holding the house of cards up, both in China & the rest of the world, is money printing (inflation) which as we can see leads to product/commodity inflation. Or no inflation if you ask Ben Bernanke, with the proviso that if there is inflation it will only be temporary???? Just like oil at $110 won't be a problem for 'the global recovery'

As long as they keep printing, there is going to be a 'recovery' until........there isn't?

Notice China has been printing Renminbi at a faster pace this decade than the dollar or euro.When researching for this project, this was quite a shock. While China’s currency is not a worldreserve currency as the U.S. dollar is, the Chinese are following the same path the U.S. has. This piece of data reinforces the idea that at least part of China’s economy is in a fiat money-induced bubble, which is a topic for another article

http://www.scribd.com/doc/52376061/PDF-Charting-the-Economy

 

[Whiskers]

China's ghost cities, again, more confirmation of the unsustainable 'made to order' centrally dictated command economy - what a bust it will be................and we will follow?

http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

REPORTER: Is China experiencing a property bubble?

GILLEM TULLOCH, FORENSIC ASIA: Absolutely. A property bubble like which I don't think we've ever seen.

REPORTER: Bigger than the one in the United States?

GILLEM TULLOCH: Yes, I think it will make the United States pale in comparison. It is said that there are 64 million empty apartments in China.

REPORTER: 64 million?

GILLEM TULLOCH: 64 million.

Agree them's big no's uncle... but it's only one empty appartment per 20 of population.

I understand it was over 65 million back in March 2010 based on electricity readings.

Do you have any idea what the actual vacancy rate is?

 

[Uncle Festivus]

Agree them's big no's uncle... but it's only one empty appartment per 20 of population.

I understand it was over 65 million back in March 2010 based on electricity readings.

Do you have any idea what the actual vacancy rate is?

Nope. A big assumption based on meter readings as you say. But if correct and we are now 12 months on, then several million more have been added again.

Now as the number of people able to afford (urbanised) such dwellings is approx 45% of the population, and you then allow for a husband, wife & 1 child as occupants of each unit then the vacancy rate is much worse. That is still assuming that only a section of that urbanised population can then still afford the prices asked, which I don't believe they can hence the oversupply and the Ghost Cities.

Do what I do these days for just about any news that comes out, especially from China - double the bad news & half the good news, and you just about get the right news?

 

[tothemax6]

Nope. A big assumption based on meter readings as you say. But if correct and we are now 12 months on, then several million more have been added again.

Now as the number of people able to afford (urbanised) such dwellings is approx 45% of the population, and you then allow for a husband, wife & 1 child as occupants of each unit then the vacancy rate is much worse. That is still assuming that only a section of that urbanised population can then still afford the prices asked, which I don't believe they can hence the oversupply and the Ghost Cities.

Do what I do these days for just about any news that comes out, especially from China - double the bad news & half the good news, and you just about get the right news?

The amazing thing is that the most recent news I heard is that they are pushing for even more construction. People genuinely think that pouring steel and concrete into buildings that no one needs means China is experiencing 'economic growth'. So few people, its seems today, know what the hell they are talking about.

Unclefestivus, what do you think will indicate the imminent crash? I am at a loss as to what indicators I should be looking for. I have some ideas such as watching for a reduction in iron ore imports. This could indicate that the chinese steel manufacturers are receiving less orders, which would in turn indicate that construction is slowing. However, the lag here is probably huge. On the other hand, I cannot for the life of me find good data anywhere, on stuff like import/export rates etc. And I doubt there is a source of data for 'chinese building starts'.
What are your thoughts on this?

 

[nioka]

Unclefestivus, what do you think will indicate the imminent crash? I am at a loss as to what indicators I should be looking for.

The indicator to look for is the date this topic was commenced. Now more than three yeas on and the situation hasn't changed. Those worried about the end of the Bul run and sitting back have missed out on the best investment opportunities that I have ever seen.

 

[So_Cynical]

The indicator to look for is the date this topic was commenced. Now more than three yeas on and the situation hasn't changed. Those worried about the end of the Bul run and sitting back have missed out on the best investment opportunities that I have ever seen.

And the next big opportunity will be the bottom of the china bull collapse. i just hope im sitting on a beach in Thailand by the time that happens.

 

[tothemax6]

The indicator to look for is the date this topic was commenced. Now more than three yeas on and the situation hasn't changed. Those worried about the end of the Bul run and sitting back have missed out on the best investment opportunities that I have ever seen.

Personally, I have not been sitting back, since I agree with you - it could be another 3 years before the crash happens, for all I know. However, as anyone who invested in US property during the 2003-2008 'bull run', in 2007, will know - sometimes the bull is a mirage. The economics are quite clear - China will take a substantial economic hit at some point in the near future. They are in a credit expansion fueled speculative construction boom, with the negative real rates and all, and it will crash.

The issue is when. I very much do not want to be sheepishly sat with aussie stock holdings when it occurs.

 

[explod]

Personally, I have not been sitting back, since I agree with you - it could be another 3 years before the crash happens, for all I know. However, as anyone who invested in US property during the 2003-2008 'bull run', in 2007, will know - sometimes the bull is a mirage. The economics are quite clear - China will take a substantial economic hit at some point in the near future. They are in a credit expansion fueled speculative construction boom, with the negative real rates and all, and it will crash.

The issue is when. I very much do not want to be sheepishly sat with aussie stock holdings when it occurs.

Would you include gold and silver producers in that mix to x6 ?

 

[tothemax6]

Would you include gold and silver producers in that mix to x6 ?

Yes I would not want to hold those either, all hard commodities and resource stocks will get whacked during a china crash, along with all aus equities. Silver more so than gold, due to the higher industrial demand component in its price. The gold price was higher prior to the 2008 crash than it was after the crash, for instance. My current thoughts would be to be in government bonds prior to the crash. My assumption would be that two things would happen after this - all governments involved will start fiscal and monetary loosening (throwing credit at random stuff, aka 'stimulus', and printing money), including Australia (although I think Australia will have a center-right government at this point, so the fiscal aspect will be less severe). I would then probably buy gold.

I would then wait until the crash had finished, and follow Rothschild's famous advice.