Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Chinease Communist Party - with over $1 trillion to Invest

Stock-Markets / Investing Feb 20, 2007 - 10:07 AM GMT

By: Money_and_Markets

Stock-Markets

If you watched much CNBC last week, you might have thought it turned into the “Ben Bernanke channel.” That's because the cameras were fixed on the Federal Reserve Bank Chairman's two-day testimony to Congress.

Given this kind of superstar treatment, it's no wonder most investors consider Bernanke to be one of the most powerful financial people in the world. Don't get me wrong, Bernanke, as well as people like Warren Buffett and Bill Gates, are definitely forces to be reckoned with. But there are also big fish across the pond.

Today, I want to tell you about two other investors that top my “world's most powerful” list. I'll also tell you what they're likely to be buying, and how your own portfolio can benefit …


Guo Shuqing and Lou Jiwei: The Biggest Investors You've Never Heard Of!

Guo Shuqing and Lou Jiwei: The Biggest Investors You've Never Heard Of!

These two senior officials of the Chinese Communist Party look like the men who will head up two new offices that will handle China's $1.1 trillion dollars of foreign exchange reserves.

Guo Shuqing is the chairman of China Construction Bank, the third-largest bank in the country, and is likely to lead the new state-owned investment company. Lou Jiwei, Vice-Minister of Finance, will run a separate office called the State Foreign Exchange Investment Company.

Here's the important part: These two new Chinese offices will probably be modeled after the system that's currently being used by Singapore. That country's government owns and operates two investment companies called Temasek Holdings and Government Investment Corporation (GIC).

Temasek Holdings is the Singapore government's investment arm, and is 100% owned by the Ministry of Finance. Established in 1974, it runs a diversified global portfolio worth $129 billion.

Temasek has partial or full ownership of lots of Singapore-based companies such as Singapore Airlines, Singapore Telecommunications, and Neptune Orient Lines. It also has significant stakes in foreign companies like ICICI Bank (India), China COSCO Holdings (China), Bank Danamon (Indonesia), and Quintiles Transnational Corp. (USA).

The company is so rock solid that both Moody's and Standard & Poor's have assigned it their highest credit ratings (Aaa and AAA, respectively). And since its inception 31 years ago, Temasek has delivered a compounded annual total return of 18%!

With results like that, you can understand why China is eager to emulate Singapore's model.

Right now, China has hundreds of billions of dollars in low-yielding U.S. Treasury bonds. And you can bet that the country wants to put some of this money to work in more exciting investments.

Where I Think China Will Invest Its $1 Trillion …

Right now, China has hundreds of billions of dollars in low-yielding U.S. Treasury bonds. And you can bet that the country wants to put some of this money to work in more exciting investments.

Not only does China want to increase its returns, it's also very concerned that a falling dollar could wipe out the paltry returns it is receiving … and possibly even result in all-out losses.

The country has been tight-lipped about its specific investment plans, but here are four areas that I think Shuqing and Jiwei will be targeting:

From Wall Street to the Great Wall: How to Invest in China
$19 (34% discount)From Wall Street to the Great Wall: How to Invest in China


Natural Resources:
China desperately needs natural resources to fuel its breakneck growth. So I expect the country to take significant stakes in coal, oil, copper, natural gas, steel, uranium, and other natural resource companies. It may even consider making outright purchases. Remember, CNOOC already tried to buy Chevron in the recent past.

Gold: Asians and Americans have very different views when it comes to gold. In the U.S., gold is an insurance policy against inflation and currency devaluation or a vehicle for speculation. In Asia, however, gold is used as a basic savings account … the way we use passbook savings and money market accounts. Because of this worldview, I expect China to convert a large part of its reserves out of paper assets (like bonds) and into gold.

Real Estate: Asians love real estate almost as much as they love gold. And if China pays any attention to Temasek's successful investment model, they'll invest heavily in real estate and construction companies.

Problem-solving Companies: The Communist Party often invests for social reasons as well as monetary ones. For that reason, I expect China to invest more aggressively in companies that can help solve many of the country's social ills. I'm talking about companies that focus on issues like air and water pollution, transportation, and health care.

What China's Investments Mean For Your Portfolio

Now that I've told you what areas I think China will be investing in, the next step is to connect the country's shopping list to the investments most directly poised to profit ...

First, metals should stay hot — gold, silver, and uranium stocks are likely to keep going higher. I'm not a metals expert like Larry or Sean, but I think the gains are going to keep coming for many of these investments.

Second, other natural resources are likely to ride the same wave. Many commodities — oil, wheat, natural gas, soybeans, etc. — look poised to go higher. As I've said before, the simple rule is, “Buy whatever China is buying.”

Third, foreign investors are holding a ton of U.S. Treasury bonds, and all that buying has kept U.S. interest rates low. But if a country like China reduces its stake in our bonds, interest rates could move up. If you're holding bonds, I'd stick to shorter-term maturities right now.

Fourth, if I could only make one single investment bet, it would be Asian stocks. I'm talking about the kind of companies I just told you China itself is likely to buy, as well as other undiscovered gems.

After all, many Asian economies are still posting phenomenal growth. Plus, the U.S. dollar looks like it's going to keep falling. That makes this a great time to add some non-dollar-denominated assets to your portfolio. Subscribers to my Asia Stock Alert service are doing exactly that … and making a bundle in the process.

Bottom line: Don't make the mistake of ignoring what happens across the Pacific Ocean. China is a 600-pound tiger tearing through the financial markets, and ignoring its next move could prove deadly to your investments.

Best wishes,

Tony Sagami

P.S. Don't forget! Your access to our free one-hour teleconference “The Easy and Hassle-Free Way for Reaping Windfall Profits in Foreign Markets” ends tomorrow! Just call 1-888-348-4629, and when prompted, enter your passcode 995980, followed by the pound (#) sign. Or if you're overseas, dial 719-884-8882.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.MoneyandMarkets.com


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in