The Valor Blog.
Investment News and Views, Direct from Our Team.

Jim Chanos Interview

Jim Chanos lays out his views on China and the troubles ahead for Australia in this interview.

Most commentators are saying that China is recovering. Growing debt at 3 to 4 times the economic return of that debt is not what we would describe as recovering.

If you had a $1 million dollar house with $2 million of debt and you give your bank manager a call telling him you want to borrow another $400,000 to build an extension which will only add $100,000 worth of value to your house (even though the kids have moved out and you don’t need the extension), I would expect the bank manager to hang up the phone immediately. However when China does this, it is classified as economic growth.

The Aussie Dollar is ticking up due to the Fed’s delay for a few more months on tapering. For those that have not moved the majority of their assets outside of Australia over the last year or two, you are getting a second chance draw.

The bigger the party, the bigger the hangover. China has moved on from drinking double vodkas and is into the harder drugs. They can’t continue on this path forever.