Manarin Investment Counsel, Ltd.

Those that invest in China may want to think otherwise is the message from portfolio manager and investment researcher Vitaliy Katsenelson in this piece in the Christian Science Monitor:

The world looks at China with envy.  China's economy grew 8.7% last year, while the world economy contracted by 2.2 percent.  It seems that Chinese "Confucian capitalism" - a market economy powered by 1.3 billion people and guided by an authoritarian regime that can pull levers at will - is superior to our touchy-feely democracy and capitalism. 

On the source of China's high growth:

... China kept its currency, the renminbi, at artificially low levels against the dollar.  This helped already cheap Chinese-made goods become even cheaper.  China turned into a significant exporter to the developed nations.

Normally, if free-market economic forces were at work, the renminbi would have appreciated and the US dollar would have declined.  However, had China let this occur, demand for its products would have declined, and its economy wouldn't have grown at roughly 10 percent a year, which it did during the past decade.

On what a Chinese meltdown could do to the the rest of the economic world:

It will tank commodity markets.  Demand for industrial goods will fall off the cliff.  Finally, Chinese appetite for our fine currency will diminish, driving the dollar lower against the renminbi and boosting our interest rates higher.  No more 5 percent mortgages and 6 percent car loans.

And perhaps the key perspectivve that makes us not want to invest in China:

[W]e have to remember that economic bubbles are usually just a good thing taken too far.  The Chinese economy is no exception.  Its long-term future may be bright, but in the short run we've got a bubble on our hands. 

Everyone wants a shortcut to greatness, but there isn't one.  China has been trying to bend the laws of economics for a while, and with the control it exerts over its economy it may seem it's succeeded.

But this is only a temporary mirage, which must be followed by a painful reality.  No, there is no shortcut to greatness - not in personal life, not in politics, and not in economics.

###

Visit us at Manarin.com.

Photo Credit: edhelien

---

Yahoo Finance - Conventional wisdom says you need to save $1 million for retirement. 

That target may be easy to remember, but it falls short of the true cost of what's required for post-career comfort.  Longer life spans, the threat of inflation and the uncertain future of Social Security benefits make this long-touted savings advice inadequate for most, advisers say.

Scottrade recently polled 226 registered investment advisers on the topic and found that 71% don't believe $1 million is enough for the average American family.  Most said families need to save double, or more than triple, the amount.

"Younger generations, especially, need to set their retirement goals higher than other generations and start saving as early as possible, "says Craig Hogan, Scottrade's director of customer-relationship management and reporting.

The survey solicited opinions about the current investment habits of Americans.  Questions were broken down by generations to determine advisers' opinions on average investment goals in today's dollars for various groups.

Generations Y (ages 18 to 26) needs to save at least $2 million, according to 77% of advisers.  Forty percent put the figure at $3 million.

Nearly half of advisers (46%) said Generation X (ages 27 to 42) should at least double the $1 million goal.  Twenty-two percent suggested more than $3 million.

For Boomers (ages 43 to 64), 35% recommended $2 million to $3 million.  Thirty percent suggested $1.5 million to $2 million.

KEY POINT:  Be sure to share with your friends and family the importance of allowing time to do most of the heavy lifting to save for retirement.  Start early, save a healthy amount and STAY THE COURSE!

For more information on managing your retirement assets, visit us at Manarin.com.

---

In most contexts, when people hear "reform" they think "progress in the right direction," regardless of specific details. - Ben Casnocha

With today's headlines cluttered with mass media thoughts on the health reform bill recently passed by the House of Representatives, we thought we'd offer up the free market/anti-statist analysis of this overhaul with the following collection of links:

CATO Institute:  It's NOT a Health Bill, Not a Medicare Tax and It Can't Possibly Cost Only $940 Billion   

Cafe Hayek:  Poof! Problem Solved

Carpe Diem:  Why Obamacare Won't Work: It Will Be Rational for People and Companies to Drop Insurance, Pay Fine

Mises Economics Blog:  Healthcare Legislation and a Potential Ron Paul Presidential Run in 2012

John Stossel:  Good News: Obamacare to Create 16,500 New Jobs!

Congressman Paul's Texas Straight Talk:  Health Care Reform Passes

---

You've probably heard of the social networking site Facebook.  Over the past several years it has grown into one of the most popular sites on the internet.  130+ million people are on Facebook each month ranging from preteens to grandparents. 

Now you can connect with Manarin Investment Counsel on Facebook here. 

We will be posting upcoming seminar dates, an overview of each week's radio show, new blog posts, key investment and economic topics plus much more.

---

This 1934 cartoon was published by the Chicago Tribune during the FDR administration to  point out that steadily expanding government and a nationalized economy will destroy economic growth.

---

This past weekend Roland and Aron visited Jekyll Island, birthplace of the Federal Reserve System for a conference sponsored by the Mises Institute.  Young and old free market thinkers from all over gathered on this small island off the coast of Georgia to explore the history of the Fed, it's impact on American public life, as well as what the future may hold for the Fed.

Among the notable speakers was Congressman Ron Paul (pictured above).

Some key notes Roland and Aron brought back include:

• John Maynard Keynes isn't the only game in town.  The far superior free market "Austrian" economic model is getting more attention today.  The American public is fed up with the borrow and spend attitude of our government and the incredible expansion of Federal Reserve policy.
• Inflation is a hidden tax that destroys purchasing power.  Look at the below Consumer Price Index chart dating back to 1790.  Keep in mind that the Fed has been in existence for the past 96 years.

• We have actually had prosperous times in our history while experiencing deflation.
• Below is the scene of the crime where the meetings took place in 1910 that led to the Federal Reserve creation.

Photo Credit: Mises Institute

---