Our blogs tell you WHY. Trillions are flying from around the world into safe haven. The bargains are all in the USA. The adjustment in USA stocks is reactionary to China and ASIA. The China effect – everything will cost the USA less and profits for USA companies will now surge higher – is becoming clear to global investors returning from Vacation early due to the crises. Trading volume has soared in recent days far above seasonal vacation traditions. Record WEALTH SHIFT from Asia and the Gulf back into the USA is taking place. For this reason the early sympathy sell off by computer triggers – was reversed by manual trading -in record volume – and computer triggers were reset to value buy – returning the USA market from a 6% decline to break even Monday.
We anticipate unpredictable volatility. Why? Because China policy makers have lost control of their markets. Central control tools do not work in free markets. Further China failed policies are showing panic – as traders see this failure to control and also see no new bottom. The housing bubble has yet to crash but it comes next and effects the overall Asia economy and banks – lots of banks. That crash is on the way – the real estate super bubble new casters report is “facing head winds” . It is not head winds it is a cliff. Property values adjusted world wide but not in China. They are now affixing to and planners have no tools to make that correction stop or slow down. What do we suggest to China planners.
We see a strategy sift to the world markets in which China policy planners report something along these lines of exploration:
- Admit central control of markets is impossible in global open free market space.
- Not reforms to adjust Chinese markets to full and more transparent global free market transparency will be undertaken between now and year end. This alone will be stabilizing.
- Report the PNC has engaged PRICE WAREHOUSE or DOOLITTLE to audit state GNP and provide Year end and regular third party reporting that is transparent to the market space.
- Report corruption reviews will continue to remove market waste and false pricing on core backbone economics.
- Note reforms will produce a sustainable transition from an export driven manufacturing basis of economic growth to a nation wide tsunami of ENTREPRENEUR small business and internal consumption economics providing a nation wide future stability – using reforms and legal transitions to foster ease in small business sector corruption free – initiation and execution.
Such revised POLICY to the world markets will have the desired calming effect. Placing state run retirement funds in a loss position to a market beyond third parties to control should be reversed as such moves convey panic and disorientated policy from leadership that compounds the problem.
State control and its confidence is shattered in China. Leaders there must restore confidence with reforms the market can trust in the future. Without those policy changes china leadership will be reactive versus pro active to market realities. In our opinion.
America is the huge winner in the current WEALTH SHIFT as reported in today’s decline and subsequent total recovery of market values based on real profits, real solid numbers, and now assurance of lower cost and higher yields for American firms outside the oil sector. But remember the average lifting cost of oil is only $ 18.50 cents and 40 dollars a barrel is a huge % profit. Only in the short time of recent years has the CRIMINAL PROFIT level for oil been present – totally driven by market manipulation and speculation versus real supply demand. Oil is still making enough money – just not the one off WIND FALL profits they consumed during a market abbaration period. Oil is not scare. Oil issuing remade by the earth and is renewable. We are moving off oil anyway. Oil’s peak day has come and gone. Fair market pricing driven by more transparent markets where speculators once again lost trillions and have a very hard road to ever recapture their one off market influence if ever.
If you own Chinese or Asian stocks, let that portfolio ride for years. Its too late to get out now. Focus back in USA investing and use the American Economy as your SAFE HARBOR because in todays world – it simply is the sea wall to the financial storms.
Thats why America did so well – again – today on Monday. In case you were wondering.
Berny Dohrmann – Chairman CEO SPACE INTENRATIONAL