After closing at another new YTD high last night, the chart below only continues to amplify. Whether you agree with us that the 21st century is as much China’s opportunity as it was America’s in the 20th or not, both the math and economic balance of power continue to shift China’s way. President Obama finally gave overdue respects to this New Reality in Washington this morning.
At 3,435, the Shanghai Stock Exchange is now up an astounding +88.7%. Yes, I know that the myopia of the moment has folks like Mr Bernanke still searching for the almighty “economic indicator”, but sometimes … some things… like say, the sun rising in the east, are very obvious.
China’s economic growth is now running +8%. Chinese money supply growth is running +28%. And, yes, China’s stock market is a leading indicator.
Be long what China needs (copper, gold, stocks, etc…), and be short what American politicians want China to need (US Treasuries, US Dollars, etc…).
Keith R. McCullough
Chief Executive Officer