Best Stocks, as of 09/01/2019

Click here for more info at Amazon.com.

Hong Kong riots

Related to the trade war?

Trump told us he had nothing to do with the riots in Hong Kong. It reminds me most thieves never say they have stolen nothing.

It is rumored they were helped by CIA or NED (National Endowment for Democracy) and it is too far-fetched to me. However, CIA does not have a good record. It could be a bargain chip for the trade war. When the rioters sang American songs and waved American flags, you can guess easily who financed the riots. What happens if Americans sing Chinese songs and wave Chinese flags in America? We would call them traitors and most likely they are paid by the Chinese.

It could be assisted by Taiwan to demonstrate that “One Country, Two Systems” does not work.

It could be by the advocates for Hong Kong independence thinking naively that U.S. would send a carrier to help them. That would not happen as U.S. does not want to risk WW3. If the protesters think they have more freedom in the colonial time, think again. Most high officers including the governor had been appointed by United Kingdom. My late father told me he knew some high officials who swept the street in London.

It could be a combination of all three. The protests were obviously well organized and these three have the most motives and benefits. There are more than a thousand of rioters dressed in same custom and color. 

Hong Kong root problem

After 10 years, a Hong Kong college graduate can double his salary but the cost of an average apartment has been tripled; he can never buy an apartment. Every city in every generation has its problems. The high costs of housing in Silicon Valley and Vancouver (due to Chinese immigrants) are not affordable for most local youths. We have not seen similar riots on this problem.

Hong Kong cancelled the estate taxes and it led to influx of money from foreign countries and most are wealthy Chinese. They invest in real estate but not in research / development that would create good-paid jobs.

About 50 years ago, Hong Kong had only one decent university and now there are about 10. With more college graduates chasing the limited number of jobs, employers do not have to pay them a lot.

The government has not done enough to suppress the abnormal rise of real estate prices, which has widened the wealth gap. It is partly due to the developers and real estate owners do not want to see their investments falling in prices. Now the prices are falling as many would leave Hong Kong.

The major problem of Hong Kong is housing and it spreads to most other sectors. However, Hong Kong still has a lot to go for it such as affordable health care, highest longevity, 15^th GDP per capita, free education and world-class public transportation. The advantages of being political stable and good legal control are shaking. I expect that the unemployment rate will be tripled with many small businesses closed due to the riots.

The revision of extradition is just an excuse to me. Many countries have extradition agreements, so the criminals cannot find shelter in foreign land. China does not want to publicize the criminals (many are corrupted officials) in Hong Kong.

My predictions

Obviously the results are bad for Hong Kong especially for the youths. Tourism will be hurt to start, foreign investments will be withdrawn and more rich HK folks will migrate. The government will contribute less for social services such as housing and the job market will be far worse than today. I bet Hong Kong will be in an economical depression. The rioters today will suffer economically tomorrow if they cannot immigrate. Does U.S. have enough of these ‘trouble makers’?

China has not sent soldiers or police force to suppress the rioters. Hong Kong is not important to China as it was used to and China wants to avoid the world misguided opinions. China can control Hong Kong easily by turning off the water supply and the electricity supply without firing a single bullet. Recently, China stops pilots who were on strike to fly over China. It could lead Cathy Pacific to face bankruptcy.

A democratic society should let both sides to express their opinions peacefully. Today, the expedition revision is not the reason for the riots. Contrary to many beliefs from Hong Kong, I believe in the police force to maintain the peace of society and the rioters (not the peaceful protesters) should be punished.

Update 8/2019. China announced that they will make Shenzhen a financial center and hence replacing Hong Kong. Hong Kong is digging her own grave. To me, a small group (about a thousand) started the riot for their own agenda that will be found out soon, and many have followed without thinking of the consequences of their actions.

---

The above is from my new book "Trade War with China". Click here.
 

Disasters in 2020

There are some predictions that U.S. will suffer a lot in 2020. Even with some good arguments, I am not totally convinced. However, I would take actions, similar to buying insurance. I would like to invest in gold and foreign countries (but all countries will be on fire if the prediction is correct). I will limit my Chinese stock holdings in 2020 for sure.

To some, China has a cycle of disasters every 60 years and 2020 is supposed to be the year for disasters. It happened in the last three: 1960 Great Famine (1959-1961 and estimated 30 million died), 1900 Boxer Rebellion (1899 – 1901) and 1840 First Opium War (1839 – 1842). I cannot find any major disaster in 1780 and Sino-Japan War is not in the cycle year.  It has 3 rights and 2 wrongs – not a bad bet.

Some predictors believe the USD would lose the reserve currency status. It is quite possible as we have been printing too much USD and our national debt is ridiculously high compared to our GDP. The hint today is some countries are not using USD for trading. The “One Belt, One Road” is another example.

Secondly, they also believe there will be an overdue earthquake that would destroy California. Despite of any predictions, it would happen but hopefully not in my life time. It would destroy Silicon Valley and Hollywood. The stock market would lose all the value. The Federal government would not rescue California in this scale and that would lead California to be independent.

The two events if materialize would possibly cause a global depression and even civil wars. Election year is traditionally a good year for the market, but I will be more careful this time.

Believe it or not? But, do not say you’ve not been warned. Personally I do not believe it but I will take some actions just like buying insurance. I hope the predictions are wrong. For more info, check out Billy Meier from the web. He did have some correct predictions but some of his photos were falsified. It could be the most entertaining article in this book or the most important one. Will update this article on 1/1/2021 if we survive. Written on 8/3/2019.

---

The above is from my new book "Trade War with China". Click here.
 

Conspiracy theories

They may be not true but here are my speculation. It is more for your entertaining and do not act on it without further verifying it.

Iran

Russia missile system can shoot down the best of our drone. It is unbelievable. Have Russia and China helped Iran in these technologies? Iran is a two-edge sword to China. China may not want to offend us in trading with Iran as China should have learned the lesson. It is a bargain chip for China in the trade war though.

Is the real reason for Iran / U.S. conflict protecting Israel OR Iran not using USD as the currency for trading oil?

First U.S. president to visit N. Korea

I bet it is an arrangement with Xi. It is too smooth and too simple using a tweet. It is Xi’s present to Trump to me. With the G20 meeting and this meeting, Trump would have gained a lot of votes.

We have lost long term in this trade war with China

·         China has allocated of effort and farm land to grow soybean now. It will take a few years before they cannot import soybean.

·         China is concentrating in core technologies. It will take year but not a decade.

·         Huawei is ready with new operating system and other chip components. The chips may not be fast enough but the operating system running machine code will compensate those chips that are not state-of-the-art. The problem is Europe depending on U.S. apps instead of China’s censored apps.

Hong Kong protest

I suspect they were organized by the folks who wanted Hong Kong to be independent. When someone whistled, the trouble-makers disappeared all at once. They had motivated (or cheated) 2 million to protest. Many countries have the expedition treaty and Hong Kong has this treaty long time ago and the protest is on the proposed revision. It is rumored they were helped by CIA and it is too far-fetched to me. However, CIA does not have a good record. Hope they are not naïve enough that U.S. would send a carrier to Hong Kong to risk WW3. The separates have hopes but they are too naïve. It is the same reason that China or any country would not send soldiers to invade us for not liking our gun control policy.

Politicians want power and money via corruption for themselves. Last time, the politicians wanted Puerto Rico to be independent even they knew it would lose all the financial from U.S.

One asked a site to delete my comments as my comments did not defend ‘freedom in Hong Kong’. How ironic! It is the example of the worst censorship. There are always two sides of a story. The freedom is protected by letting everyone express their opinions peacefully.

Malaysian & Korean airline disasters

U.S. destroyed the air plane with the captured U.S. drone on its way to China. Similarly, it was speculated that the civilian Korean airline was shot down by N. Korea due to the spy equipment in the civilian airline. It was not in the news for long.

---

The above is from my new book "Trade War with China". Click here.