The Coming China Crisis
Bert Dohmen, known as a contrarian, has been warning about the growing problems of China.
Once again Bert Dohmen is in the very small minority, just as he was in March 2000 when he wrote that a market crash was ahead, (it was the exact top of the internet bubble), and in 2007 when he wrote the book PRELUDE TO MELTDOWN, predicting that in 2008 the markets would crash similar to 1929.
Now Bert Dohmen’s THE COMING CHINA CRISIS book presents the case that China will produce a Tsunami throughout the global economies. China was the locomotive of the globe, the financing mechanism for the immense US debt, the source of incredible demand for commodities and oil, and the economic power of Asia. That is changing now.
No bubble grows forever. The government’s construction programs have produced much of the GDP growth. Analysts quote the strong GDP growth, but that’s actually price increases because of faulty inflation adjustments. The consumer’s share of the economy has shrunk from 46% of GDP to 34% in spite of the government’s efforts to make the private sector grow. Even dictatorships are not all powerful.
The private sector in China is succumbing to the economic downturns in Europe and the US. Empty buildings, empty cities, empty shopping centers cannot be built forever.
Bert Dohmen, who predicted in 2007 that Dubai would be the largest real estate debacle in history, (which it is now), currently predicts that China’s real estate disaster will be many times greater.
Inflation is surging, the government is fighting it with an incredible credit crunch, manufacturers can no longer get credit to produce goods, factories are being abandoned, financial fraud discoveries at publicly listed companies will soar, and street protest are growing in numbers and intensity. The China bubble has burst and everyone knows that a burst bubble cannot be re-inflated.
Bert Dohmen is not a perma-bear, someone who is always negative on the markets, predicting the end of the world. In fact, most of the time he is an optimist, especially when gloom and doom hangs over Wall Street.
Therefore, it is even more relevant that he now sees the most significant problems of his entire career in the global financial system. Bert has never been a broker, does not manage money, and has no conflicts of interest. He can call it the way he sees it, not having to worry about being “politically correct” in his market views and forecasts.
What prompted him to write this book was the urgency of the situation. Even in August 2007 the attitude amongst policy makers, Wall Street analysts, and economists was one of complacency and denial of reality.
However, Bert pointed out that all the arguments of the bulls regarding good economic growth, corporate profits, low inflation, and reasonable stock valuations, are unimportant during a credit crunch: the only thing that matters is an unprecedented liquidity implosion in the aftermath of the greatest credit bubble the world has ever seen.
Bert’s warnings over the past year have been that the “ocean of liquidity” theory everyone was talking about was really an illusion. It was actually a credit bubble, something which can disappear overnight, and then cause an avalanche of bankruptcies. The inability of the people in Washington to recognize this danger makes the danger of a meltdown even greater.
Prelude to Meltdown
The global financial crisis of 2008 was the worst crisis since the 1930’s. Wall Street honchos and Washington “leaders” tell the public that no one could have predicted it. That apparently is the excuse for not having taken steps to prevent it. But it’s a lie. A number of people did predict it. Hedge fund manager John Paulson made $25 billion because he saw it coming.
One lone analyst, Bert Dohmen, predicted the crisis, in his award-winning WELLINGTON LETTER. The April 2007 issue was headlined: THE PERFECT FINANCIAL STORM. In 2007 he wrote his first book, PRELUDE TO MELTDOWN, which predicted exactly what would happen in 2008, and why. He said it would be the worst crisis since the 1930’s. He doesn’t have 500 Ph.D. economists on his staff as does the Federal Reserve.
In fact, Bert Dohmen has predicted every recession, and every bear market over the past 41 years. He attributes this success for not even having an economics degree. His is in chemistry and physics.
His new book, just released, is FINANCIAL APOCALYPSE. Here he gives a complete chronological account of the year 2008 and how he identified the clues of the approaching crisis. He shows the irresponsibly optimistic statements from the head of the Federal Reserve chairman, the top regulators, and leaders of the U.S. Congress. You will read what the heads of the largest financial firms said just days before their demise or forced takeovers. The book is a collector’s item, something you want on your bookshelf for many years.
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