QUESTION: I am just a little guy who invests in mutual funds and a few stocks. Ever since I started reading your blog, I have felt a sense of comfort in knowing that eventually, everything will work out because all this has happened before. It is also nice not to feel like I am swinging blindly. Thank you for the peace of mind you have given me.
For a guy like me, is there a date that I should pull all my money out of the US stock market and invest in a mutual fund that is specific to China and the far east?
Or is it not that simple?
ANSWER: Not yet. We have to first get through this readjustment through the Monetary Crisis Cycle. China will rise, but it is just not quite ready for prime time. Just stay away from bonds right now. Interest rates can soar faster than anyone can imagine. We see Italian rates rise from 0.3% to 2.5% in a single day. I have tried very hard to explain that sometimes it is the private sector in trouble, and at other times, the crisis is in government. You have the dollar soaring. So be mindful that the US stock market has not broken out in US dollars and the consolidation for the first half is not yet finished. Of course, if you are not US$ based, chances are you are now watching the US share market make new record highs.