Monday, October 21, 2019

Buyer Beware on China

Newt’s World Podcast -- Episode 38

American investors are being conned into investing in Chinese companies traded on U.S. stock exchanges that have misrepresented their values and over-inflated the stock price. 

Why Are American Investors Funding Chinese Fraud?

COMMENTARY -- By Christopher A. Iacovella
...diligence in China is impossible because the Communist Party won’t allow it. This roadblock should have immediately stopped the sale of these securities to America’s retail investors. But, in true Wall Street fashion, it didn’t because the ETF issuers desperately want access to the Chinese market and the index providers bowed to a regime that pressured them to increase China’s access to global capital. As a result, neither the index providers nor the ETF issuers know whether the Chinese companies in the indexes they sold are Enron-like frauds, arms of the Chinese military, or supporting human rights abuses

China has Printed more Money then any Country in History

TheSoundingline -- Kyle Bass
“The Chinese print more money than any other country has printed, in gross terms, in world history… Since 2001, they’ve printed roughly $30 trillion worth of RMB (Chinese Yuan). Think about that for a second. The debate here in the US, about the Fed, is: ‘Is the Fed balance sheet too big? Is it too large? It got to $4.5 trillion. Should it be $3.5 trillion?’ China has printed $30 trillion worth of RMB in a decade (18 years). The scale to which they have printed is… unprecedented. Can the Chinese run their stock market up? Absolutely. They control the price. They control the printing press. They control the police and they control the narrative. ...As we noted here, China has created over three times as much money supply as the US since 2008.