Cryin' In Their Beer
Research for Online Investors

by John Dalt

11/17/09

The Chinese are publicly questioning the cheap dollar and concern for the U.S. budget deficits.  This is all talk aimed at the Europeans.  It does not upset the Chinese.  They tie their currency, the Yuan, to the U.S. dollar.  As the dollar becomes cheaper, their exports gain advantage against every other major currency.  They are crying in their beer.

The U.S. has pressured China to let their currency float, which would take away their competitive advantage in exports to the U.S.  They will not do it.  There was a small adjustment in 2008, but since the credit crisis began, the currencies have moved in lockstep.

China gains on all fronts.  They have a built in advantage against the dollar, and as the dollar drops, they gain an advantage against other major currencies.  This will help bring their economy out of the current recession.  Sometime down the road, once the recovery is underway, they will adjust the value of their currency.  But, only a small amount.  They will never let it float, with the value determined by traders.  Free markets are not predictable enough for the Chinese.

Maobama is all over China, even on t-shirts.  Why did it take the Chinese to assign the correct name to our president?  I have been playing with his name for the last year, with “Oh Bama”, but Maobama is just too good to leave behind.  News came out on Reuters this morning that the U.S. is talking to China about buying some of our banks!  You can read the story, “China, U.S. eye pact to help troubled banks.”

The amazing note on this is the Chinese are complaining about our strict regulations and lengthy approval process for financial deals.  The U.S. is negotiating a memorandum of understanding (MOU) to encourage Chinese banks to invest in the U.S. banking system.  I guess they need a way to spend some of their dollars.

With the President making a swing through the Asian Pacific, I thought it might be a good idea to check the Asia Times for some topical news to bring you. There is a letter to ‘Maobama’; this is a great spin on Mao and Obama that has upset the Chinese government. A CNN reporter was arrested yesterday in Beijing for showing a t-shirt during a broadcast. The letter, “Welcome, comrade Maobama” makes a few points, from a Chinese perspective. It may be worth your time to read, it will certainly perplex you.

I would capsulate the take away that we are not able to counter the Chinese government because they deal in long term goals, and use every legal means possible to their advantage, while ignoring those that restrict them.  After all, why would they care about trademark laws and enforcement?

Maobama met with Japan’s Emperor Akihito, and bowed, with a handshake.  Evidently, his mother didn’t conduct any etiquette classes in Hawaii, or his stepfather in Jakarta.  State Department spokesmen did not deny the bow, but said that it was a “sign of respect.”

This follows his bow to Saudi King Abdullah earlier this year.  The White House denied that the president bowed to the Saudi King.

Are you going to believe me, or your lyin’ eyes?

To the mailbag:
On Precious Metals:  “When your cab driver is telling you what to invest in then you might consider the opposite.” ---paid up subscriber S.C.

I agree, we closed the trade in Silver for 11.5% gain in SwingTrader, let’s wait for the right entry point.  I think we will have a chance sooner than you think.---John

“You are very good at what you do. . .  I knew all this on the housing front. .  I think you and Meredith Whitney are the only ones who point out what is going on.  Our country is in so much trouble--and it seems like 90% of the population has no clue.  I just don't get it. . . . . I sold two holdings today to make a little while it was up, as I don't know when it is going to sink again.   And sink big!  How is your daughter now?  Drugs. . . . and they're becoming legal everywhere because it's one of the only ways people in our flunky country can earn money.  How sad.” ---Subscriber T.M.

Thank you for asking about our daughter.  I just talked to her, and she seems better.  She is sore from the wreck this morning.  This deal of slipping drugs in girl’s drinks amazes me.  It would be nice for a dad to catch one of these guys…On the Market…I believe we will go up until fear hits.  We are moving to cash in Swingtrader, Selling in the money covered calls in Buy, Sell, Hold, and watching our stops in the Long-term portfolio.  It is all good, just unpredictable.---John

p.s. thank you for the compliment on the information I try to gather and relay to you.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

MarketToday Home Page

Back to Top