I’ve known James Rickards for years. We’ve shared ideas over steak dinners. Swapped stock picks on the back nine. I consider Jim a friend. But friends, he could not be more WRONG about what’s happening in China right now.
In his recent piece, “China: The Helpless Giant”, Jim paints a dire picture of the Middle Kingdom – a crumbling empire beset by plunging demographics, malinvestment, and a looming credit crisis. To hear Jim tell it, “China’s failing growth engine” has hit a “dead end”, spelling economic disaster for us all.
But I’m here to tell you, my astute reader, that this is pure poppycock. Balderdash. Horse feathers of the highest order! Because while Jim is busy sounding the alarm, he’s missing the bigger story. The real opportunity. And if you follow his advice to “dump Chinese stocks”, you could be leaving a fortune on the table.
You see, Jim makes the classic mistake of fighting the last war. He’s still stuck in a 20th century mindset, where conventional economic theories reign supreme. But we’re in a new era now. And China is rewriting the rulebook.
Yes, China faces headwinds. Jim correctly points out their debt-to-GDP ratio exceeds 300%. But he fails to grasp how China’s unique system of state capitalism turns this bug into a feature. When you control the banks, debt is just an accounting entry. China can keep the plates spinning indefinitely.
Jim also trots out the tired old trope about China’s “ghost cities”. But he misses the point – overbuilding is a stimulus strategy. Those empty apartments are a store of value, a wealth effect in waiting. When the time is right, China will unleash that pent-up demand and supercharge their consumer economy.
Most importantly, Jim completely ignores China’s ace in the hole: their booming tech sector. Giants like Alibaba, Tencent and Baidu are on the cutting edge of AI, 5G, blockchain and quantum computing. This is the real story – a 21st century innovation economy that will leave the West in the dust.
So here’s my advice: don’t believe the China Cassandras. When everyone else is running for the exits, that’s the time to be bold. To zag while others zig.
I’m putting my money where my mouth is. Just this morning, I issued a strong buy alert on 3 high-flying Chinese tech stocks to my premium subscribers. And I’m betting big with my own portfolio.
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The 21st century belongs to China. You can either get on board and ride the dragon to riches – or get left behind with the pessimists. The choice is yours.
But I know where I stand. And I’m betting Jim Rickards will be eating his words before long. Stay tuned.
