We are neither affiliated with the author of this essay nor responsible for its content. After North America, Europe, and Japan, the area of China, Taiwan, and Hong Kong "is a fourth growth pole in the world economy" Jue which in was expected to double in size by Today, the growth rate is still on track to fulfill that prediction. Recent Chinese economic policies have shot the country into the world economy at full speed.
This article has been reprinted with permission from Stansberry and Associates and appeared at The Daily Crux. As you undoubtedly know, financial newsletter writers get paid to make bold, exciting predictions.
After all, according to newsletter writers, the world is always either about to end… or about to boom. In fact, what I would like to show you today is without a doubt the single greatest threat to your wealth you will ever face. The reality is, the terrible things and incredible booms we predict almost every day in the sales presentations for our newsletter business rarely come to pass.
As you would imagine, I have some insight into this question. After all, I have written some of the most famously hyperbolic headlines of all time in our industry.
Some of these predictions turned out to be right, like when I predicted Fannie Mae and Freddie Mac were going to zero.
Why would I remind our clients of the single biggest weakness of our business model — our need for hyperbolic sales pitches? What can I say? I firmly believe that if you combine the strategies I explain in these notes with our investment research, you will excel as an investor.
In fact, I know thousands and thousands of investors around the world have used our work to become world-class investors. They depend on us for reliable and profitable ideas. Sadly, though… perhaps because of our marketing, most of the people who try one of our investment newsletters either demand a refund or simply allow their subscription to lapse.
The main reason that happens is because the reason they subscribed — the original hyperbolic headline — did not pan out the way they expected. But… nothing costs you more in publishing. Likewise, nobody wants to read that their cherished financial nonsense is going to come to a bad end.
Or the latest craze: Just mentioning that Bitcoin might turn out badly will likely cost me several thousand subscribers. So… how can you know when a newsletter writer is going to be right about an outlandish prediction… perhaps one that goes against your own beliefs about the market?
In my opinion, the best guide is history. When history says the prices in a market have gotten completely out of whack, the newsletter writer is going to be right every time.
Let me give you one recent example from these pages. Barring the end of the world, the price of oil is going to fall and the price of natural gas is going to rise. At the time, natural gas producer Chesapeake was collapsing because of low natural gas prices and nearly everyone on Wall Street was short natural gas.
I recommended buying Chesapeake bonds and its competitor, Devon, and I predicted a huge rebound in natural gas prices. A year later, the price of gas has doubled. How did I know? A barrel of oil contains 5. One thousand cubic feet of gas contains just a little more than 1 million Btu. Thus, a barrel of oil has approximately six times more energy than 1 million cubic feet of gas.
On an energy-equivalent basis, you would expect natural gas to trade for one-sixth the price of oil. But of course, oil is more highly prized as a fuel source. Historically, looking at the two commodities, the average multiple of gas to oil was about 10x.
That is, a barrel of oil was, on average, 10 times more expensive than one thousand cubic feet of gas. By last April, that premium had reached an all-time high of 55 times. There was no way that kind of price relationship could have lasted.
You should expect oil prices to continue to decline and gas prices to continue to rise.
When this crash occurs, it will be the largest destruction of wealth in history. There has never been a bigger bubble in U. How do I know?About AFP.
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With rapid economic growth, China’s market has kept expanding, and its contribution to the world’s economic growth is on the rise. In China accounted for over one third of the increase in the world’s total imports, contributing more to the growth of world trade.
Summers published an article title, “The Age of Secular Stagnation: What It Is and What to Do About It,” in the February issue of Foreign Affairs. The article explores how expansionary fiscal policy by the U.S. government can help overcome secular stagnation problems and get growth back on.
Die deutsche Energiewende ist ins Straucheln geraten. Zwar klopfen sich deutsche Politiker und Energiemanager noch immer gegenseitig auf die Schulter, dabei leiden sie in Wahrheit doch unter Betriebsblindheit.
Major wars and economic crises force the pace of change within and between capitalist states, giving rise to new alignments and shifts in the geopolitics of world capitalism. 1 At the time of writing this article, turmoil in financial markets triggered by faltering growth in significant parts of the globe was provoking fears that the world economy was plunging into another recession.
The impact of one economy’s growth on the world economy is transmitted through its impact on the terms of trade - which depends on the bias of its growth. (Hicks , Corden , Bhagwati ).