Saving Money

From a Yahoo! News story: “BEIJING – China's central bank said Saturday that its foreign exchange reserves rose 16 percent year-on-year to $1.9537 trillion by the end of March. China's reserves, already the world's largest, increased by $7.7 billion in the first quarter. In March, the reserves increased by $41.7 billion, it said, $6.7 billion more than the same period last year. Analysts believe China holds up to 70 percent of its foreign reserves in U.S. dollar-denominated assets, including Treasury securities. Beijing has taken steps to hold down the price of exports by cutting taxes on exporters and stopping the rise of China's tightly controlled currency, the yuan, against the U.S. dollar. Economists say both steps could strain relations with trading partners if China is seen to be competing unfairly.” It’s always easy to say that your competitor is unfair when he’s way ahead of you. The Chinese are good savers and prudent spenders. If they wanted to, they could ruin the U.S. by simply cashing in their poker chips.

China

There's this story on the net about a statement by the new Secretary of the Treasury having to do with China's manipulation of its currency so that their exports have an unfair advantage over domestic products. It's been like that for quite some time. However, this is not a good time to be making statements like that. The old rule still holds true: never negotiate from a position of weakness. "The statement, which is certain to anger the Chinese government, comes at a particularly sensitive time, with economies in both the United States and China weakening and tensions already rising around the globe over trade. The United States, moreover, is increasingly dependent on China to finance its ballooning deficit." So said the New York Times. It will get interesting, to say the least.

Listen up

I have been advising my eight readers to buy stocks - 100,000 shares to start - as long as they are safe, conservative companies they're buying into. I also said the market has gone as low as it's going to go - 8500 - give or take. Today, the market went up by almost 900 points - 10%. Now, we continue to hear dire predictions about the housing sector. The housing sector will hit bottom in about three months. Some say it won't hit bottom for another year or more. I say no, no, no - three months max. Why does the media enjoy scaring people? Because FEAR sells. The lady at left proves the economy is about to right itself. Hemlines are a better indicator of the state of the economy than any ECONOMIST. Remember that.