our mate roger

I saw an interesting article today:

http://www.theage.com.au/business/china/chinas-dilemma--where-to-park-all-those-funds-20120720-22egm.html

This suggests to me China is in a very strong position, Roger Montgomery believes otherwise:

http://blog.rogermontgomery.com/category/resources/

"The problem is that China’s banking system is subject to growing bad and doubtful debts as returns diminish from investments made at increasing prices in assets that produce no income. These bad debts may overwhelm the foreign currency reserves China now has"

Their banks could come under pressure but the government will easily step in to prop anything up, provide stimulus and achieve the desired GDP they want. Others may have a different view so please feel free to discuss further.

Other famous pearls of wisdom from Montgomery.....

In his recent change of view to sell down mining services he targeted FGE as one to sell. He stated FGE are vulnerable as they rely on the mid tier and smaller miners for work.

The last 2 ASX announced contracts are from FMG and BHP, a couple of small ords companies. Contracts have also been undertaken for RIO and are ongoing, is RIO in the ASX 200 yet anyone? Then there is the small cap oil explorers FGE relies upon, you may have heard of them, Woodside and Chevron. (Chevron Corporation Market Cap: 215.13B)

CTEC has been servicing a few small clients of late as well, you could pretty much call them cashies. APA, RIO and The Australian Government....

The Skaffold program RM makes love to every night also has a valuation on FGE near $10. Sure Roger takes a view that things will deteriorate in the future but if Skaffold does not factor this in yet how can any of the recommendations he make rely upon this product if he will openly overule it?