I hope everyone is enjoying the new year! I am still working on The Psychology of Trading: Part III, and I want it to tie up any loose ends with it so it might be next week when I publish it. If you have any questions or suggestions in the mean time please feel free to email them to me;
you can email blog suggestions to : J_Derek_Blain@hotmail.com
But in the meantime I want to share something a little off the topic of stocks but still within the finance realm. i sent a letter to a prestigious newspaper after reading a few articles and I still haven't responded. It reads as follows:
To The Editor:
There has been so much press about harmful Chinese goods being manufactured, and products that don't last and are of shoddy quality.
What really bothers me is that people are only starting to notice this now - through 2006 and 2007 more than ever. The most obvious explanation for this is because of the media: So much media attention has been given to negativity regarding china. Contrary to everything said the last several years, quality standards on Chinese products have skyrocketed in the last decade. Inspections have increased and what passes for import-qualified goods is a much harder standard to attain.
What it can all be attributed to is the rapid growth of the Chinese economy - it has outpaced the US economy over 5x in as many years. I am Canadian so I don't get pomelled with the same amount of dogma that America does, but I can say this: It only makes perfect sense to undermine China's ability to grow as much as possible.
There are several reasons for this:
Oil - Demand for oil in the US is growing fast, but in China it is growing 100s of percent faster, as more people there are entering into the middle class. America needs as much of the oil as it can get (being by far the most oil-consuming country in the world), but still at a reasonable price.
By having the media make a huge fiasco out of a few product defects there is a good chance of decreasing China's imports. This will decrease economic growth, thus lessening the amount of oil/production supplies/income in China.
The second reason of course is as old as dust. America is strictly anti-communist. China is a communist country and therefore apprehension exists as a rule of thumb.
The third and final reason is the amount of debt owed to China by America - over $1 Trillion. By discouraging the import of Chinese goods, this gives the US a bargaining chip which they can use to leverage against their debt and negotiate.
It just bothers me that you never mention those kinds of things on the news. I find that more newsworthy in and of itself than any number of small defects. At some point the people of North America will see the game the media plays with government and in my most sincere prayers will take drastic measure to realize the true meaning and purpose of news.
Please respond at your convenience: I look forward to finding out if any of your journalists would write an article of this nature!
Feedback time: Do you agree with what I've said or not? I apologize in advance to any die-hard American patriots out there. It is not an offense to you or the idea of your country, simply the execution of that idea in these times.
Let me know what you think. Psychology Part III will be out soon!