In Beijing, you can't buy a car even if you have the cash. Traffic jams and air pollution are such serious problems that the government rations new car purchases.
"In China, you enter a lottery to get a new car," says a friend. "You don't win the car; you win the right to buy it."
There was not much action on Wall Street yesterday. Stocks traded as though it were still summer.
We've been exploring some familiar territory: how to make intelligent investors when you can't know much about the present...and almost nothing about the future. It's familiar because it has been mapped and picked over by so many speculators, researchers, economists, and finance professionals for so many years. But it is still terra incognito as far as most people are concerned. And most still get lost in it.
We've already hinted at our simple trading system, designed to defy both Warren Buffett and Burton Malkiel, that is, both the believers in the Efficient Market Hypothesis and its opponents.
But we will save our follow-up on this subject until Monday. We are in China, after all. Today, we lift up our head to have a look around.
"China is the nation to watch," begins a Beijing colleague. "It is already the biggest trading nation in the world. And it will soon pass America as the world's biggest economy. But what is really important is that it will also overtake the US in two other important categories: military power and money.
"No nation ever became the world's biggest economy without also dominating the world's money and the world's armed forces.
"If you think back to the succession of great nations...from Spain in the 16th century...to Holland...to France...to Britain...and finally, in the 20th century, to America...each one dominated the financial system at the time...and each dominated, militarily, at least the space around it.
"Now, the US is making a show of supporting the nations around China...as if it could stop China by teaming up with the Philippines and Japan. This is like the early 19th century when France tried to get all of Europe to unite against the rising power of that era - England. It didn't work....especially when Napoleon attacked Russia to stop it from trading with England. Now, it's the US that has made an enemy of Russia...which has made Russia our [our colleague is Chinese] friend.
"You can't stop a nation whose time has come. And China's time is coming. Everybody here believes it. And we know it has two components - money and firepower. We don't talk much about the army. But we talk openly about money.
"Right now, world trade is done in dollars. China's renminbi is used in only less than 3% of settlements. That's because the rmb is not fully convertible. But the government knows it has to change this. It will make the rmb a world currency, not just a Chinese currency...giving other nations an alternative to the dollar. That is already happening, by the way. Contracts worked out between China and other nations call for settlement in rmb, not in dollars. And we're talking some very big contracts. And when the rmb is fully convertible, you'll see more and more of the world's trade shift to rmb.
"There is even talk of backing the rmb with gold. Gold always flows to the rising power. China is the world's biggest buyer of gold. What do you think will happen to the dollar when much of the world shifts to a gold-backed rmb?"
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.