Interact
Member access
Follow
Browse
SuperInvestor TV
ยป Doom gloom and the elephant in the room
Date published: 28/11/2011
Doom, gloom and the elephant in the room
The Indians have an interesting expression about “the elephant in the room”: this is the thing that everyone is aware of yet nobody talks about. Much like the odd smell in the elevator, the Emperor’s new clothes and when great-aunt Euna’s blouse becomes unbuttoned at Christmas lunch: there are some things we just do not wish to mention.
Designed to save embarrassment or awkwardness, these undiscussed topics merely lead to more awkward silence or stilted conversations about “Lovely weather, isn’t it?”
Somebody may probably mention the actual elephant in passing, just quietly and hopefully you will hear it and it will make you think. Or perhaps someone will mention it in public and will actually get away with it. Much is made of the news in the press that the UK is coming to its knees and the riots are just the beginning.
Perhaps in a country such as the UK whose main export in the last few years was purely financial products and not physical products, the alarm bells could have been rung earlier. The USA had a similar Titanic fall, due in part to its exports of bad loans and questionable financial products (does anyone remember the US sub-prime crisis before the GFC, or the US stock market “tech-wreck”?).
Any country (or any business) who is exporting questionable products (whether financial or physical) is going to be in trouble sooner or later. The recently-maligned China is, as far as we can tell, still churning out physical products of reasonable quality (for the price). Many economists are predicting a fall in China or a substantial slow-down in the Chinese economy. I would ask them “Have you been there?”
It is overly simplistic to state that China would collapse because the USA and UK or European nations can no longer afford to buy Chinese products. If the GFC came ten years ago, it may have affected the newly-emerging Chinese economy greatly; now, not so much.
Ten years ago, the Chinese were criticised for their “sweat-shops” and minimal wages. Nowadays the average Chinese wage is a lot higher than the old “$1-a-day”. Nowadays the Chinese can afford to buy locally-produced products such as mobile phones, digital cameras and flat-screen TV’s.
China’s economy, due to its rapidly-increasing middle-class is now becoming almost fully self-sufficient. They no longer need to sell products to the west. Any economist who fears that China may collapse needs to look at the elephant in the room and realise that it is actually a dragon.
If another country collapses like many European nations, it will create little impact on the GFC. The big scary question is: what if China does NOT collapse? What if they get stronger and the west gets weaker? Where will we be then?
Kevin Rudd speaks Mandarin already. Perhaps the rest of us had better start learning. Speak the language of the conquerors and discover how to invest into their companies. Google “what is an i-share” and you may find that Asian investments have not only out-performed in the past 5 years but may well do so into the future.
For more information, or to discuss your specific situation, please contact me directly.
Jeremy Britton
24HourWealthCoach
Jeremy Britton is an independent wealth coach and transformational speaker. Past investment performance is not a reliable indication of future performance. Think outside the square at www.24HourWealthCoach.com.
Now that you have read this, what do you think? Do you have other ideas? Please share you views with other members (eg by blog or discussion form) and/or request professional member(s) to contact you directly.
