Potential Solution To Global Capital Problems...

[mbga9pgf]

was thinking about this earlier... all the capital has been gobbled up as a result of our record trade deficits... At some stage or other, that capital outflow is going to come back our way. Lets face it, what else is China, Dubai, Saudi and the host of other large SWF holders going to do with the cash? Build ANOTHER castle for the Emir plated in gold?

This gets me worried. If they were playing nice, they would have already intervened surely. But their no. They are clever, and are effectively declaring war economically. They, I reckon, are going to wait until asset prices completely collapse, couldnt get any lower, then pile back in. Why own 10% of a country when you can own perhaps 30% or 40%?

Thoughts peeps??

Reason I mention it is this... Money IS going to be too tight to mention in the near future, yet we, on this site have lots of capital, not the norm. I for one would seriously consider buying into slashed-price blue chips, the ones that China and India needs to leverage itself as world leaders. Pharmas, Big banks, (HSBC?) Steel production, Copper production all imo will collapse/fall dramatically if there is a recession, as consumption of raw goods will fall, no construction etc, the market will over-correct. They are going to be a complete bargain in time, yet with massively rising consumpion in the long term, are the true cash cows. Could multiply our capital holdings, what you all think?

[_w_]

But their no. They are clever, and are effectively declaring war economically.

I think they've been at it for a while, we've just been to stupid to believe it. Japan has been at it since the 50s and the rest of Asia has dutifully followed their example in the last few decades. With China having entered the fray and playing the same game, no wonder we're on our knees.

I quite agree with everything you wrote else though. This is a great opportunity for those with cash and yes, we are talking about doing the same as those b*stard SWF funds.

Edited March 14, 2008 by williamdb

[haggis]

I think they've been at it for a while, we've just been to stupid to believe it. Japan has been at it since the 50s and the rest of Asia has dutifully followed their example in the last few decades. With China having entered the fray and playing the same game, no wonder we're on our knees.

I wuite agree with everything you wrote else though. This is a great opportunity for those with cash and yes, we are talking about doing the same as those b*stard SWF funds.

Of course, Western economies have put their own necks on the chopping block through their short-term economic policies. You can't go bust if you're solvent.