bubbles
People toss around the word “bubble” a lot these days. I suppose that’s because it’s hard to find an American who has not been harmed by financial bubbles recently. In the past two decades we’ve had the tech bubble in 2001, the food prices bubble in 2008-9, the real estate bubble, and these are just the ones that everybody knows about. But for example I’d say gold is a bubble. Yesterday a financial commentator described China as “the biggest bubble in history” and I agree, and I’d expand that to most of these third-and-second-world countries that people are foolishly pouring their money into. But let’s just focus on China. People are rushing to pour money into China, yet the government is not at all transparent nor, for that matter, entirely responsible. Chinese goods are notoriously poor quality, indeed it’s been shown repeatedly that Chinese manufacturers have no qualms about using lead paint on toys, or poisons in milk. Chinese factories themselves are worse than sweatshops. The vast majority of Chinese have an extremely low standard of living, actually, despite all this talk of the Chinese tiger roaring. There is little or no oversight, accounting standards, or plans for sustainability. I could go on. If this was an American company I was describing, nobody would invest a nickel in it. Yet for some reason people are all excited to throw their money at China Inc. Eh, don’t say I didn’t warn you.
If I was going to make a bet on the future, I’d bet on Brazil. They’re where America was 100 years ago. They have tremendous natural resources (India and China, in contrast, do not).
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