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China's Money Class
Andrew Mickey, Editor, BreakAway Investor
October 18, 2006
China’s foreign exchange reserves are growing like wildfire along with its worldwide status. As the burgeoning superpower continues to be a net exporter, its foreign exchange reserves will only continue to grow.
Many experts are predicting the decline of the dollar -- especially since billions of them are already held offshore in the form of Eurodollars and petrodollars. The Chinese, however, haven’t created a tradable dollar-denominated asset like their European and Middle-Eastern counterparts. They’re hoarding them all for themselves; but there’s a problem.
Who wants to work for nothing? You’re willing to work in exchange for a paycheck that you can use to buy things, right? Right now, the Chinese have been avoiding the basic laws of economics and have been essentially working for nothing. Even Milton Friedman would agree the system can’t hold up.
That’s why times are changing in the East Asian country, which has a growing middle class quietly starting to become spenders rather than saver. In the process they’re going to start unloading the massive foreign exchange reserves the country has acquired and start realizing the fruits of their labor.
The transition has already started. My colleague, Todd Schoenberger, has identified this trend and alerted Diligent Investor members to the pressing investment opportunity with what he calls China’s “Money Class.” Right now there are only 70 million members of the “Money Class,” but within 10 years there will be more than 250 million. That’s a lot of spending power and will have a definite impact on the world economy and your portfolio. Check out his full report here.
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