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Do not open your luxury store in Bejiing right now!

July 8, 2015

Caterpillar sales of heavy equipment in China are down 80% for the last 3 months compared to the peak of 2011. There is no wealth without heavy construction as the foundation. The stock market in China was inflated purposely by the central planning masterminds of China. Stock trading groups had orders not to let the market drop. If life was only that simple as the China manipulation of their economy.

Now is not a great time to open a luxury brand store around Beijing with a new millionaire every minute. The new Mercedes dealer opening or the next Tiffany diamond bracelet sale may stop suddenly as wealth evaporates with the sinking China stock market and dropping real estate market.

China wanted to quickly become the top country and top economy in the world. It was an ambitious goal after the violent and lethal results of Mao Tse Tung’s Cultural Revolution. The criminal industry of substandard counterfeit steel bolts, counterfeit designer goods, and pirate copies of copyright protected intellectual property were accepted to feed more US dollars into China. The manipulation of currency in combination with a flurry of new stock offerings added to the rapid growth of money for China.

Most of the Chinese investors use margin to get stocks with loans from banks. (Just like our Great Depression experience with banks loaning to customers for stock investments.) So the small investor gets a need to add money to his losing investment. Selling dropping stocks adds to more loss in stock value. The bank does not want to hold stocks for their loan, so the banks will sell stocks. The loan client has no money to the pay the loan for the stock that is now sold. Chinese banks can sink under the losses.

USA could not believe that China would lie, steal, and cheat to get ahead faster. Corporations discovered that book keeping standards for business accounts and reporting of assets are creative writing in China. How can you invest in a company on traded in China? You do not know if anything is true on their valuation! Does anyone remember the Chinese small business owner from Arkansas delivering paper bags full of cash to Bill Clinton during his campaign for president? He wanted to get permits to distribute little goofy plastic toys in USA.

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One Comment leave one →
  1. July 8, 2015 2:50 pm

    Reblogged this on Brittius and commented:
    There goes my Million Dollar idea: Yankee Chop Suey Shop franchises all over China…

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