America’s empire is coming to an end.
Since the fall of the Soviet Union, the U.S. has been the world’s dominant superpower. It has the world’s largest economy, an unrivaled military, and the world’s most important currency.
But that may soon change.
As Dispatch readers know, America has been in decline for decades. The 2008-2009 financial crisis only accelerated the country’s downfall, thanks to the Federal Reserve.
Since 2008, the Fed has held its key interest rate near zero. It’s also pumped $3.5 trillion into the financial system over the last eight years.
These “stimulus” measures were supposed to fix America’s economy. But they have only made it weaker.
Right now, the U.S. economy is “recovering” at the slowest pace since World War II. The typical U.S. family earns about $2,500 a year less than it did in 2008. And the number of Americans on food stamps has nearly doubled over the last decade.
In March, Casey Research founder Doug Casey warned that the U.S. is now on the edge of a complete economic meltdown.
Right now, we are exiting the eye of the giant financial hurricane that we entered in 2007, and we’re going into its trailing edge. It’s going to be much more severe, different, and longer lasting than what we saw in 2008 and 2009.
If you’ve been reading the Dispatch, you’re already prepared for this coming crisis. You own gold. You’ve stockpiled cash. And you’re out of most U.S. stocks. These simple strategies could save you thousands of dollars when the next crisis hits.
But there’s another major economic event that you need to prepare for.
• A new superpower is being born…
And that superpower is China.
China’s economy has exploded over the past couple of decades. In 2010, it overtook Japan as the world’s second-biggest economy. It’s grown at an average annual rate of 10% since 1990. The U.S. economy has grown just 2% per year over the same period.
You may have heard that China’s economy is cooling. Last quarter, it grew just 6.7%. Keep in mind that’s coming from the Chinese government. Some analysts think China’s economy is growing much slower than the government claims.
Still, China’s economy is doing much better than the U.S. economy.
Think about it. If China’s economy is growing half as fast as the government says, it’s still growing at more than 3.3% per year. That’s almost three times as fast as the U.S. economy grew last quarter.
With America in rapid decline, China will soon become the world’s biggest and most important economy. And it could happen faster than most people think.
And that’s exactly why China deserves a look.
• Nick Giambruno, editor of Crisis Investing, just went to China in search of opportunities…
Like Doug, Nick is a contrarian. He likes to buy assets other investors hate. This simple approach often gives you the chance to buy world-class businesses for cheap.
According to Nick, China is one of the most hated markets on the planet right now. Investors are worried about its slowing economy… a potential property bubble… and China’s volatile stock market.
These are legitimate concerns. But the key is to find markets where the upside outweighs the risk. And Nick thinks China’s long-term potential far outweighs these risks.
• China wants to unseat the U.S. as the dominant world power…
To do this, China is spending billions of dollars to develop the “New Silk Road.”
The New Silk Road is the world’s biggest infrastructure project. If all goes according to plan, it will give China a huge economic advantage over the United States.
It’s one of the biggest investing stories in the world. Yet the U.S. media barely mentions it. Maybe because it’s too big and complex of an idea to fit into soundbites.
• Nick covered the ambitious project in the June issue of Crisis Investing…
China's New Silk Road is all about tying Eurasia together with infrastructure. China is building a web of high-speed rails, modern highways, fiber optic cables, energy pipelines, seaports, and airports to span all of Eurasia.
Eurasia is a giant landmass that includes all of Europe and Asia. It contains most of the world’s resources and people. For centuries, countries that controlled Eurasia ruled the world. That’s exactly why China is going after it right now.
If China succeeds, Nick says it could “overtake the U.S. to become the dominant global superpower.” This could trigger “the biggest shift in global power since the end of World War II.”
• China’s New Silk Road is a direct threat to U.S. global supremacy…
But it’s a huge opportunity for investors who know how to profit from it.
Unfortunately, China’s government has made it hard for foreign investors to directly invest in China.
You could own Chinese stocks that trade on the Hong Kong Stock Exchange. Or you could own one of the few dozen Chinese companies that trade on U.S. exchanges. Neither option allows you to put money directly into China.
Plus, many of China’s biggest companies only trade on the mainland, which includes the Shanghai and Shenzhen stock exchanges.
Because of these barriers, many investors don’t own any Chinese stocks at all. According to global bank UBS, China is “the biggest underweight” among global mutual funds. But that could soon change.
• China is opening up its financial system to the rest of the world…
MSCI manages indexes that track stocks from all over the world. Right now, MSCI doesn’t include mainland Chinese stocks in its indexes. But that might change soon.
The Wall Street Journal reported on Tuesday,
It may just be a matter of time before shares listed in Shanghai and Shenzhen get included in MSCI’s indexes, many investors and analysts say, pointing to China’s stated goal of opening its markets. Such inclusion means international money managers tracking the indexes would have to add A-shares to portfolios.
“A-shares” are shares of Chinese companies that trade in mainland China. If MSCI adds A-shares to the Emerging Market index, China’s weighting could jump from 2.7% to 20%.
In other words, money could soon start pouring into China’s mainland stock market.
• Nick found a way to profit before China opens its flood gates…
In June, Nick told his readers about a way to invest directly in China.
He recommended a fund that offers direct exposure to the New Silk Road. It holds a company that builds bridges and toll roads… a major Chinese railroad… and a company that’s bankrolling many “Silk Road” projects.
Best of all, this fund is easily accessible. It trades on the New York Stock Exchange.
• Nick’s China investment has already returned 15% since June…
But it could soon head much higher.
You see, this fund is trading at a 15% discount-to-liquidation value. That’s an incredible bargain. Liquidation value equals the amount of cash you’d get back if you sold every share of stock the fund owns at market value.
Unfortunately, we can’t tell you the name of Nick’s China investment. That would be unfair to Nick’s paid subscribers.
But you can learn more about this exciting opportunity by signing up for Crisis Investing. But first, please check out our newest training series below.
• You see, most people aren’t cut out for crisis investing…
It’s not easy investing in markets most folks hate. It’s hard to buy a stock that’s been falling.
But you can often make huge returns by going against the crowd. Some of Doug’s most well-known crisis investments delivered gains of 600%, 1,333%, and 1,733%.
Our four-part training series will help you decide if crisis investing is right for you. You’ll learn everything you need to know about this little-known, yet highly effective strategy. Click here to sign up for our FREE workshop.
Chart of the Day
Nick’s China investment is “abnormally” cheap.
Today’s chart shows the discount-to-liquidation value for Nick’s China fund since 2010. The bigger the discount, the better the deal.
You can see this fund’s traded at a discount each year since 2010. Between 2010 and 2015, the discount averaged 8.4%.
When Nick recommended the fund in June, it traded at a 20% discount. Today, it trades at a 15% discount. In other words, it’s still abnormally cheap, but it’s getting less cheap by the day.
This discount will continue to shrink as Chinese stocks go from “hated” to “loved.” It could even disappear entirely. To make the most of the investment, you have to act soon.
You can learn more about Nick’s China investment by signing up for Crisis Investing. Click here to get started.
Delray Beach, Florida
September 8, 2016
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