SSE.LT

Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose… Lou said CIC was building a broad investment portfolio that includes products designed to generate both alpha and beta; to hedge against both inflation and deflation; and to provide guaranteed returns in the event of a new crisis

Now they say about that openly. Lou Jiwei, the head of Chinese sovereign wealth fund, admits the only way to defeat financial crisis is to produce another bubble economy.  Controlled by few people, who serve as a monopoly, with no competition or control.

And you know how that works:

If our returns are not bad and the state’s FX reserves are still rising, we may go and ask for more

If consumers don’t buy they go and buy themselves. If producers don’t produce, they subsidize or nationalize them and produce at loss. Examples: Chinese industrial or metal sectors; American GM or Fannie Mae; TARP or US record budget deficit. Many similar things, and all done by the largest money suppliers of the world: China and the USA. It is hard to say how would economic environment  develop without the help of external sources. However, government intervention into the market creates optimistic mood for one, and higher potential bearish return for another. Let’s see whose luck will be the first.