The Chinese shonks recently took top hedge funds manager John Paulson for a cool $US600 million ride and they now have the full skill set to fool anyone. Plenty of them have worked in the west and are back in China using the latest financial engineering tools.
There would be no legal redress if your investment goes bad in China and you are a westerner. I recognise that getting any satisfaction under our legal system is very costly and would not be open to most of us.
Best stick to what makes sense and has some hope of success.
I am happy that the Chinese are buying gold. They will probably continue to do so in a big way so long as they have rising incomes and negative real interest rates. I wonder what will be the impact on Chinese gold consumption from any bursting of their property bubble - it could be net positive or it could be net negative.
If Europe does not do a major money printing exercise to save its banks then all asset prices, including gold, will take another dive. The UK has shown the way with some QE and Benny has indicated he will try something in the US if things go backward. China may do something more as well as it needs to recapitalise its own banks - their banks may have about $1 trillion in bad bank loans! Govts better keep providing that heroin or the manic-depressive investor patient will go into semi-terminal shock.
