Obedience is not enough. Unless he is in pain, how can you be sure that he is obeying your will and not his? The power is to inflict pain and humiliation. Power is all about tearing human minds apart and reassembling them into new forms of your choosing. – George Orwell, “1984”

Dear foreigner,

Just returned from a closed-door investing conference at Sagamore Pendry, the Fell’s Point boutique hotel in Baltimore, supported by Under Armor founder Kevin Plank. With a view of Inner Harbor, my team and I met CEOs, senior executives, journalists and investment bankers from around the world. It was truly a one-of-a-kind experience … and it couldn’t have come at a better time.

We saw the impact of Chinese policies on markets last week, so it was good to get a glimpse of journalist Bob Guterma. As someone who lived there for 10 years, he laid out possible endgame scenarios for this Evergrande debt mess.

He compared investing in China to dining on the Titanic after hitting an iceberg. Everyone knows where it’s going …

Shadow prohibitions

He called China’s crackdown on tech companies a “Red New Deal” because of its global impact, and US markets are still in shock. Most of us cannot understand the influence of the Chinese government on its people and the world.

For example, last June Chinese citizens held Zoom Meetings (NASDAQ: ZM) commemorating the 32nd anniversary of the Tiananmen Square protests. Keep in mind that Zoom is an American company and most meetings were hosted through Zoom’s servers in the United States through accounts based in the United States. But the Chinese government had a line of communication with the company and was able to end the meetings because they displeased the Communist Party … a little strange, right?

Referring to 1984, Kodak (NYSE: KODK) posted a photo of Xi Jinping on Instagram by photographer Patrick Wack with a caption calling China an “Orwellian dystopia”. Kodak, an American company, removed the photo and issued a formal apology, saying it “will respect the Chinese government and Chinese laws.”

The government recently imposed a regulation to limit video games to three hours per week, from 8 p.m. to 9 p.m. Thursday, Friday and Saturday. Such a small change had a massive ripple effect on the revenues of video game companies around the world, including its own Tencent (OTC: TCEHY).

And Chinese students abroad have been reprimanded by the government and even denounced by their classmates for opposing the party.

Orwellian, indeed …

But understand this … China is the biggest trading partner of 120 countries, including the United States, so it’s no surprise that we have appeased the country. There is a lot at stake …

China is the second largest economy in the world, it has the second most powerful army, and it has the second largest capital markets. But depending on how you measure these stats, China could very well be No.1 …

However, to the detriment of the country, its stock markets are still below 2007 levels. The United States would be very different if our markets were stuck in 2007, so it is no wonder that when wealth is created in China, it be moved abroad.

The big point to remember is that the Chinese economy is not stable. The Evergrande disorder has affected tens of millions of people. And since Xi Jinping could remain in power indefinitely since the removal of presidential term limits, we could see a power struggle in the near future.

Guterma also mentioned that Democrats and Republicans agree that we need to take a strong stand against China, an idea we saw firsthand on Friday as President Biden hosted the first summit of the Quadrilateral Security Dialogue (Quad). with Australia, Japan and India. The Quad should strengthen its resolve against the communist country.

Return home problem

China is not the only struggling economy. In the United States, many of us simply cannot become the best version of ourselves and be productive in the economy. This is something that I have written about before. Of course, we can buy cheap Chinese goods from Amazon (NASDAQ: AMZN), which creates deflationary pressure. But everything that is important to live is more expensive, a sign of inflation. Check out this chart from Howmuch.net, a financial education website … And remember what is true in developed countries is even more true in developing countries, especially in big cities. Things got cheaper, but life got more expensive.

Who cares if they can buy a 20-pack of bathroom tissue from Costco (NASDAQ: COST)? The real engines of the economy are so expensive that the costs hurt families, housing and even birth rates.

Our government needs to improve our human capital so that we can be more competitive, have access to financial markets and control our finances. And if Congress’ thoughts on canceling student loans are true, it would be a boon to the economy unlike anything we‘I’ve seen it ring in a new era of American economic prosperity much like Roaring ‘20s.

Current trend

One of the many benefits of being in this business – and I love it – is seeing new technologies and trends before they go mainstream.

And this is good news for you, dear reader, because I can relay this information directly to your inbox.

We saw a live demonstration of a cybersecurity company that easily encrypts your personal files so that hackers cannot access them even if they gain access to your computer. With all the cybersecurity threats these days, this business will become popular with businesses around the world.

I was given a hand-rolled Bahamian cigar (don’t tell our custodians in Washington) from the founders of the First Caribbean Stock Exchange. They also created the first government-backed digital currency, which I have been saying for years is the future of crypto. Central governments won’t let cryptos run any longer and will undoubtedly create their own digital currencies, making all other cryptos obsolete. This idea has much better prospects than linking a currency to Bitcoin, as El Salvador did. With price fluctuations of up to 30% in a single day, Bitcoin can destroy the wealth of anyone who owns it. It’s gonna be a big deal …

We also had lunch with oil tycoons who are disrupting the industry and making oil investments accessible to the retail investor. With this company, you will receive royalties and can even transfer your 401 (k) to the company fund.

Another theme of the conference was environmental, social and corporate governance (ESG) investing, in particular the fact that many companies are distancing themselves from tobacco. But I don’t agree here, because tobacco is one of the most important commodities in the United States. I wouldn’t bet against them.

And liquid fuel isn’t going away anytime soon, as alternative energies require broader system changes, and it remains to be seen if that will happen in the near future. So look for cleaner sources of liquid energy like hydrogen and kerosene.

Once we sit down and review the financials, I’ll feel comfortable giving you more information.

In the meantime, stick to your investment plan and don’t worry too much about the markets because there is a lot to look forward to.

To your wealth,

Alexandre boulden
Editor, Foreigners Club

After Alex’s passion for economics and investing drew him to one of the world’s largest financial publishers, where he rubbed shoulders with former Chicago Board Options Exchange traders, hedge fund managers from Wall Street and analysts at the International Monetary Fund, he decided to take a pen and guide others through this new era of investing. Check out his publisher’s page here.