In a sense, the modern real estate game is like playing monopoly on a board of boards. In the real world, governments control the monopoly pieces. They are also the bankers. So why not invest in a company that is already playing the game? For instance, land prices in Shanghai are considered unsustainable due to low interest rates and a limited supply of quality assets. The Chinese government’s solution? A master plan to limit population growth in the inner city and shift demand to ‘satellite cities’, like Hangzhou and Suzhou, […]

An asset that never decreases in value is an investor’s holy grail. Few find it. But it exists in Asia, and right now, it’s the best time to buy it. In China, the government (the Party) controls the economy, including the country’s capital market. That’s the stock market, the bond market and the banking system. “Stability” is the Party’s priority. Under these conditions, default risk in China’s bond market falls to zero. As an investor, Chinese bonds are your free lunch: high yields, with zero downside risk. High yields Chinese […]

As the U.S. retreats from the world stage, China is concocting a powerful policy cocktail to boost global trade and security in its favor. Behind China’s trillion-dollar One Belt, One Road initiative is a lending program of unprecedented breadth and investment opportunities are opening up in everything from transportation and industrial manufacturing to healthcare and telecommunications. But can China afford it? Absolutely.  Over its 5,000 year history, China has seen extreme periods of wealth. One of those periods was during the Han dynasty. “The granaries in all the towns are […]

The Big Bling? Not everything on planet Earth has been here since ‘the beginning’. It’s been labeled as ‘otherworldly’ and the stuff of aliens or gods since humans first discovered it. It mesmerizes nearly all who possess it, and causes people to do all sorts of strange and sinister things to get hold of it. There’s actually growing scientific consensus that gold did in fact arrive from outer space, during the ‘terminal bombardment’ of meteorites that hit our young planet 3.8 billion years ago. Whatever the case, people have a […]

Welcome to our special series highlighting snapshots of our Bank-Robbing guidebook: the Asian Capital Development (ACD) Special Report. For each day this week, we are taking a look at the different steps you need to take to rob the big Asian banks legally. Download the full report here. Banks are the foundational stones upon which an entire financial organism bases itself. As such, these institutions are given a tremendous amount of support by governments. In Asia, governments still have the power of the state to intervene in the economy to […]

For years, analysts have been talking about how investment is responsible for a massive share of China’s GDP growth. At 48%, the added value provided by investment in China by far exceeds levels in other big emerging markets such as Brazil and India, not to mention the mature market of the U.S. And real estate is the destination for the biggest chunk of all investment in China, and the rate is growing. From the sector accounting for just 4% of its GDP in 2000, its value now makes up around […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. So far in this series, we’ve uncovered the tensions and tipping points in the South China Sea, and how the United States and China are using all the weapons at their disposal in this global power struggle… from debt and credit to conventional weapons and digital espionage. This week, we delve into the future of trade in the region… and pick through the wreckage of what would have been one of the biggest trade deals on earth (until […]

On a hot July night in 1839, British opium merchants were drinking baijiu – or rice liquor – in Kowloon, China: a key entry point on the addictive product’s route into the Qing Dynasty’s vast empire. After a lot of baijiu, the British sailors became involved in an altercation with a local man named Lin Weixi. What followed would change the course of human history. The drunken brawl escalated and Lin Weixi was killed. Things then quickly deteriorated between the British and the Chinese authorities, leading to a battle that […]

Just how free are Asia’s ‘Free Markets’? If you’ve been following this series (or many of our others), you’ll probably already be aware of how much some Asian governments like to take a clandestine, heavy-handed approach to managing their economies. They allow free trade when it suits them and restrict it when it doesn’t. While trade is almost as old as human history itself, the 20th century witnessed the rise of a truly interlinked global economy that has been characterized by two distinct trends: liberalization and protectionism. A vintage night […]

If you’re not invested in Asia’s banking sector, you are missing out. But with so many state-owned banks in the region, how do you know which banks make good investments? In this article, we’ll tell you where Asia’s banks are headed and three things to watch out for when investing your hard earned cash.   If you’re thinking about adding Asian stocks to your portfolio, this article is a must read. Traditional sources of revenue declining in Asia Normally, banks get most of their revenue from receiving deposits and granting […]

“Time is an illusion, timing is an art.” 
― Stefan Emunds, author and inspirational speaker Welcome to our special series highlighting snapshots of our Bank-Robbing guidebook: the Asian Capital Development (ACD) Special Report. For each day this week, we are taking a look at the different steps you need to take to rob the big Asian banks legally. Download the full report here. You may wonder: does debt growth guarantee great returns? In a nutshell: no. Debt swings. It moves up during the expansion phase (leveraging) and down during the […]

Welcome to our special series highlighting snapshots of our Bank-Robbing guidebook: the Asian Capital Development (ACD) Special Report. For each day this week, we are taking a look at the different steps you need to take to rob the big Asian banks legally. Download the full report here. Now you know how governments in Asia use debt-derived money to grow their economies. They inject this funding towards specific areas in the economy, which are called “hot spots”. They grow faster and become artificially more competitive. But what’s the effect of […]

When you think of the Monopoly board, Park Place and Boardwalk are the most coveted properties to own. But they are also costly and difficult to acquire. In reality, the orange squares are statistically the most landed on, making them the easiest to build on and make money with. In that same way, investing in previously less desirable locations, like Asia, would have turned them into a goldmine overtime. Cities are growing Unfortunately, in the real world, we can’t reset the game. What we can do is learn from real-estate […]

In Monopoly, not all properties are equal. To win, you must know which are the most popular and which produce the highest returns. The same logic applies to the actual real estate market. Charts like the one above are great, but they don’t always tell the full story. So below we’ve detailed which Asian real estate markets are experiencing healthy growth. With a little luck, you can secure Asia’s next “Park Palace”. China Retail: + Beijing: Retail-to-Office conversions continue to attract investors. + Shanghai: “New retail” concepts are gaining traction […]

We’ve almost reached the end of the road of our TGIF series on One Belt, One Road – the Chinese megaproject that is going to reshape the economic and political landscape of the eastern hemisphere forever. But that doesn’t mean our recommendations for this massive initiative are going to be coming to a halt any time soon. Involving trillions of dollars in infrastructure projects over the next few decades, OBOR will see China extend its reach through Asia and into Europe and Africa via a sprawling network of roads, railways, […]

Most people who play Monopoly play it wrong. The problem is that the majority of people can’t assess risks and rewards properly, even in a fictional-game setting. They also simply never read the rule book. Many monopoly players tend to either go all in and lose big, or they hold back and never get ahead. No wonder the game seems to last forever. In the wild East, Western investors can be left baffled by Asian real estate opportunities. Below we’ve constructed a legal and risk vs. reward ‘cheat sheet’ for you. […]

Governments in Asia intervene in the market – a lot. China, the region’s largest economy, is no exception. It has a long history of planning (and distorting) its economy. Despite the many problems that originate from governments trying to control markets, not to mention the moral dubious events that go along with these actions, choosing to invest in sectors that a government ‘attempts’ to grow is a reliable way to gain profits. Recently, China has begun rebooting its agricultural industry, with tremendous public and private investment flowing into this sector. […]

China’s rags to riches story is the envy of every developing country. In fact, China’s massive population and total economic product makes it the largest emerging market. China is also considered the world’s heavyweight for manufacturing and industrial production. These sectors account for 40 percent of its GDP. China is undoubtedly the top dog for exporting and second for global importing. And don’t forget, the planet’s fast-growing consumer market lives in China too. Feeling intimidated yet? If China’s economic growth was a person, it would be Usain Bolt. As the […]

The race of the century is happening right now – investors everywhere are fighting to be the first to “crack” the Asian investment code. In order to win big in the world’s most dynamic market, you need the right tools of analysis. We call these models – they are how we think and how we understand the world. They help make economics and finance simple. We use models in our approach because the systems so commonly used in the West are basically meaningless when applied to the East. Let us […]

Capital markets: the bread and butter of every economy. Without them, you couldn’t buy a stock or bond, or take out a bank loan. They drive job creation, innovation and financial security. Most importantly, they drive economic growth. Just as we’ve written how Asia Pacific’s development model, debt composition and banking system are very different from the West’s, capital markets in Asia have their own unique flavor, too. In this series, we’ll deconstruct Asia’s curious capital markets, show you who owns them and where “money lying in the corner” opportunities […]

Competition within China’s banking sector and majority foreign ownership of Chinese banking assets were unimaginable events a decade ago. But last week – coinciding with Trump’s tour de Asia – they became reality. Investor’s worldwide are taking notice; it’s time to buy China’s financial sector. On November 10, 2017, the day that U.S. President Trump left China, (following a high profile visit with Chinese Head of State, Xi Jingping) it took a huge step toward opening its financial system. Officials announced that the country will remove foreign ownership limits on […]

Welcome to the first edition of The Great Investment Frontier report (TGIF). Each week, we’ll be taking a look at one of the global issues shaping the world of international finance and investment. Over a series of 10 articles (1 every Friday), we’ll go behind the scenes to uncover the secret trends and shadowy figures behind enormous global capital flows. And show how to profit. The first of our “special reports” looks at one of the most combustible and war-torn regions on earth. It’s home to some of the fastest-growing […]

What do San Francisco, Cape Town, Singapore and Sydney all have in common? Well, they all have Chinatowns. In fact, there are prominent Chinese communities across the globe. And don’t be fooled, they’re not all selling trinkets and dumplings. The Chinese have large stakes in trade and industry worldwide. And in Southeast Asia, Chinese minorities dominate the business world. In fact, the world’s largest diaspora population – meaning people living outside of their homeland – is Chinese. It accounts for 50 million people internationally. China’s diaspora population is so strong […]

Many Western investors have totally misunderstood Asia. Even those within the area have difficulty grasping regional differences. The old ways of investing that made billions on Wall Street don’t work here. Economies in Asia have grown differently from the rest of the world, and so have their stock markets. A new world order is being created and must be understood, otherwise you are in for a rough time. Whether you are an individual investor, financial services expert or government policy maker, it’s vital to understand how Asian economies are built; […]

By now you’ll have realized that banking in Asia is quite a different animal from the traditional western beast. Let’s recap on what we’ve learned from this series of publications. First, it’s important to understand that big business in Asia depends more on banks than other areas of the world. Since capital markets are immature and underdeveloped in this region, Asian industry relies heavily on bank credit to support operating activities. Dependence on state-owned financial institutions for capital stems from government-backed banking reform. This is integral to executing an Asian Capital […]

Governments interfere with the free market, and Northeast Asian governments are serial offenders. But one secret tool of manipulation isn’t even mentioned as official policy. So what is it? And how does it affect your portfolio? Well, if you are investing in Asia, understanding ‘window guidance’ is key to making informed decisions. How did this powerful instrument of governance come into being? Survivors of the nuclear bombings in Hiroshima and Nagasaki remember the event as a living hell on earth. With burn scars for life from the explosions, Sunao Tsuboi told the […]

In the last few decades, Asian manufacturing companies have dominated the international playing field. Now, it seems everything is made in Asia. But it wasn’t the free market that created the region’s global behemoths. It was governments. And they’re trying to do it again, but this time in services. In this article, we’ll tell you all about Asia’s secret “battle plan” for market domination, so you can get ahead of the investment curve. The most important thing to know about Asia is that free market rules do not apply. Governments […]

Picture the “average Joe”. He has a regular job and earns a decent wage. He has a house in the suburbs and a college diploma. He has a car in the garage and a set of golf clubs in the trunk. But the house is mortgaged and the car is leased. His student loan is still being repaid. And the golf clubs were bought on credit. Like most of us, he has debt. In good times, this isn’t a problem. Joe earns enough to service the debt and still put […]

Capital markets are the natural choice for large corporations looking to raise funds for expansion. This, however, can only occur in countries with advanced financial systems. In places where capital markets are underdeveloped, often the only option for financing is from large state-controlled banks. There is growing concern over the levels of bad debt Asian banking institutions are incurring as they attempt to satisfy corporate credit demand.  Governments typically have large stakes in these banking enterprises, and the institutions’ sheer size means that any failure would create widespread economic catastrophe. […]

When an economy is closed, the government can exert more control over the economy and “manage” its growth. But directed economies have small bond and stock markets, which hamper long-term economic performance. Eventually, capital restrictions must be lifted and usually an influx of foreign capital follows. We’re seeing this happening in China now. To build something great, conditions must be controlled. China’s famous (or infamous, depending on who you talk to) Three Gorges Dam is a modern feat of hydroelectric construction. Taking almost a decade to complete, the 600km-long reservoir reached its […]

Yesterday, we looked at how financial repression is secretly used by Asian governments to keep their currencies undervalued, with all sorts of shady methods used to cover their tracks. But beyond simply making exports more attractive, what are a weak currency and low inflation rate’s other effects on an economy? Financial repression and low interest rates usually end up scaring away FDI and capital inflows, generally translating into a negative effect on the long-term health of an economy. Ho Chi Minh City traffic in 2017: infrastructure has struggled to keep […]

Time and time again, centrally-planned economies have led to market distortion, inefficiencies, and even bankruptcy. Asia’s economies have a lot of government intervention, mainly in the form of state-owned enterprises and subsidies. As we shall discuss in today’s daily, subsidies can be an indication of which sectors or companies act as bloated debt whales, dragging the economy down. Avoiding these credit-dependent Moby Dicks is vitally important when investing in Asia. The paradox of planned economies It wasn’t the Cold War or an arms race that ultimately finished the Soviet Union. […]

We hope that you enjoyed our series on capital markets in Asia. They’re the bread and butter of every economy. Without them, you couldn’t buy a stock or bond, or take out a bank loan. They drive job creation, innovation and financial security. Most importantly, they drive economic growth. Just as we’ve written how Asia Pacific’s development model, debt composition and banking system are very different from the West’s, capital markets in Asia have their own unique flavor, too. In this series, we’ve shown you who owns Asia’ s capital […]

One Belt, One Road (OBOR) is an infrastructure and diplomatic project of epic proportions. Spearheaded by China, OBOR will connect over 60 countries across Asia by land, rail and sea. It’s a revitalization of the ancient Silk Road, backed by trillions of dollars. One way to expose your portfolio to this infrastructure megatrend is to invest in companies that are contracted to build OBOR projects. Keep reading to find out about the Chinese company that’s building the Southeastern arm of OBOR. China’s southern Silk Road Upon completion, OBOR infrastructure projects will […]

Over the past few decades, mainland China has created and implemented a unique set of policies that have transformed the economy from poverty-stricken to second largest in the world. But bureaucrats in Beijing don’t deserve all the credit. A special “gift” from the U.K. was key to funding China’s impressive growth story. When Prince Charles and the then-U.K.-prime minister Tony Blair traveled to Hong Kong in 1997 to return the city to Beijing, they weren’t giving back the same fishing village their predecessors had colonized 156 years ago. Under British […]

Chinese banks aren’t internationally competitive. Years of protective isolation has produced institutions wholly reliant on government-orchestrated instruction and support. But cracks are already starting to appear in the country’s financial infrastructure. And when a financial earthquake does come, China’s system will be shaken to its core. Ahead, we’ll tell you about an upcoming “tremor”. On May 12, 2008 a magnitude 8.0 quake struck southwestern China, destroying several villages in Sichuan Province. Surprisingly, it wasn’t the quake itself that killed more than 70,000 and left another 18,000 missing … it was […]

If you look at the regional leaders in Asia, almost all have gone through serious social reform. Agriculture and banking were built together to strengthen economic foundations, but land reform created a singular moment, defining both where the region stands today and the places that have the highest growth.   You Own Your Home In the West, property rights are taken for granted. It may come as a surprise that only recently the trend was adopted in Asia. It is a major factor driving regional GDP growth. We may see our […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. So far in this series we’ve seen how tensions in the South China Sea are bubbling closer to the surface as old peace treaties become ever more fragile. The rising power of China and the aggression of North Korea have brought the region to the brink and created an unprecedented arms race. Now, the world holds its breath… But if a full-blown conflict is the last resort… and if China dumping the dollar does not lead to a […]

China, China, China. The word is almost as inescapable as “Trump” in today’s world. And yet, to many, the massive country and its rising economy remain a mystery. Mystery or not, leaving China out of your portfolio is a big mistake. We at One Road Research know it can be hard to understand, let alone trust, opportunities in China. But that’s why we’re here to help you with the cross-over. So you can make informed and profitable investment decisions in the times ahead. After finishing up our series on capital […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. This is the penultimate edition of our special series on the South China Sea.  It comes as U.S. President Donald Trump finished his tour of Asia – the longest official tour of the region since George H.W. Bush in 1992. And it brought the issues we’ve been discussing over the past few weeks to a head. This week, we catch up on the president’s visit to Asia… and what it means for trade and investment in the region. […]

What Happens to Debt During Periods of War? We’ve talked before about how many governments around the world play fast and loose with public finances. In many democracies, money creation and government spending is often utilized as a political tool to enhance party popularity and retain office. However, this just amounts to bribing people with their own hard-earned cash. But what type of situation forces a government to borrow at levels higher than could ever be suggested in party manifestos or infrastructure plans? The answer is, of course, all-out war! […]

Asia’s recent economic boom has been debt-fuelled and much of the credit has been directed toward unprofitable companies and banks. In order to write off the bad debt, governments manipulate interest rate margins using capital controls. But like all rules, people are figuring out ways around them and it’s weakening the foundation of an already stressed financial system – fundamentally changing the way we invest in the region’s largest economy. China’s Debt Disappearing Act We’ve previously talked about how governments in Asia, especially in China, use wide interest margins to […]

In contrast to taking turns to buy and develop properties in Monopoly, megacities are melting pots. And there is constant cosmopolitan competition for finite space and resources. Most cities look disruptive and disorganized on the surface. But humans are predictable creatures. Even the most chaotic cities actually have order. Understanding how cities grow and change is the first step to investing in real estate. Models can help us to predict the areas that are poised to grow. As well as those that are about to decline. We’ll save the luck […]

This is the second edition of our TGIF series covering One Belt, One Road (OBOR), China’s trillion-dollar plan to take over Asia and beyond. OBOR is an extensive long-term infrastructure initiative modernizing the original Silk Road trading routes that made China one of the world’s superpowers many, many years ago. Billion-dollar contracts are being handed out to companies around the world. By investing in these companies, your portfolio can grow with the largest infrastructure project the world has ever seen. If you missed the first OBOR story, click here, to […]

What if one-fifth of your country’s economy was unproductive and corrupt? In the U.S., for example, that would be like the financial and property sectors combined – dragging the economy down. In China, this is really happening. About 20 percent of China’s economic output comes from State-Owned Enterprises (SOEs). SOEs worldwide are notorious for being inefficient, corrupt and poorly managed. So it’s no surprise that they have worryingly high debt levels and decreasing returns. Overhauling the inefficient state sector is Beijing’s toughest challenge as it seeks to revive a slowing […]

What is the best tactic to win Monopoly? Is it buying the most expensive properties with the highest rents? Or is it buying the most landed on properties, collecting the most consistent rent? Or is it a game of pure luck? In simple terms, Monopoly is to real estate investment what chess is to strategy. It’s vital. If you can’t win a game of Monopoly, you’re unlikely to become the next Donald Trump. Due to restrictions on foreigner ownership, bank loan limitations, and other logistical haphazards, navigating the Eastern property […]

Welcome to our special series highlighting snapshots of our Bank-Robbing guidebook: the Asian Capital Development (ACD) Special Report. For each day this week, we are taking a look at the different steps you need to take to rob the big Asian banks legally. Download the full report here. For our final daily, we present the hard evidence of the system in motion: our own tried and tested manipulation of the Asian banking system for profit:   After analyzing several industries back in 2009, One Road Research noticed that Chinese banks […]

As we’ve already highlighted in this series, a lot of currency manipulation happens in the shadows, and currency exchange fluctuations can sometimes seem like they’ve been directed from a secret bunker on the moon. But the real truth is out there, and it’s definitely found on Earth. Governments in Asia are some of the biggest culprits of currency manipulation, and all are eager to keep their next moves hidden from their regional peers and export competitors. The Downward Spiral The rise of East Asia’s economies over the last two decades […]

China is where patents go to die. If you walk down any street in China, you’re likely to see fake Prada bags, counterfeit Rolex watches and Apple products that aren’t really made by Apple. More than half of the world’s counterfeit goods originate from China — a big chunk of an industry worth half a trillion dollars per year. In the midst of so much deception, it’s a fair question to ask if China’s stock market – with a market cap of almost US$10 trillion is real … or simulated. […]

When we think of money we see coins or dollar bills, but these are only mere mediums placing a tangible value on debt. Many believe that money is created by the government or a Central Bank to keep up with the growth of goods and services within an economy. However, the majority of funds within our societies are borne through commercial banks, each and every time they issue a debt based product, such as a home loan, overdraft or credit card. Money being created from thin air may seem a […]

The game of Monopoly is won by skill, knowledge and strategy. Interestingly, the real estate market is won in the same manner. And Asia’s market is no different. In fact, due to Asia’s highly contrasting landscape – including some of the world’s most developed properties sat alongside emerging industries – every investor should enter the Asian real estate race well-informed and overly-prepared. As you know by now, just like in monopoly, not all property is created equal. Some properties are destined for amazing returns. While others will leave you overburdened with […]

Part of the difference in prosperity between Northeast and Southeast Asian economies boils down to whether their leaders – at pivotal points in economic development – read the right books or not. Despite public confidence, some people are just not up to the task at hand. In our following article we’ll outline the mistakes aplenty made in SE Asia and of course, how to find investment opportunities despite botched government policies. A Lack Of Focus Really, what happened to make Northeast Asia’s economic miracles and Southeast Asia’s paper tigers so […]

“The future of Japan’s economic growth depends on us having the willpower and the courage to sail without hesitation onto the rough seas of global competition.” – Japanese Prime Minister Shinzo Abe Japan is known for its technological might. It has made a global name for itself as a producer and innovator of reliable, cutting-edge technology. This prowess has turned it into the 4th largest export economy in the world. But it’s not only great at producing complex technology (or secretive Alien-Hybrid humanoids like Season 3 of the X Files […]

The world has come a long way since the 1950s when American parents would say “eat your food, there are starving children in China”. Chinese economic growth hit the world like an asteroid crashing into prehistoric times: with unexpected speed and astonishing, world-altering results. An underdeveloped country, characterized by mass hunger, took over the world’s production. It became an economic powerhouse in less than fifty years. China has the fastest, sustained growth rate of any large nation, ever. What is its secret?   China has three major circumstances to thank […]

Welcome to our special series highlighting snapshots of our Bank-Robbing guidebook: the Asian Capital Development (ACD) Special Report. For each day this week, we are taking a look at the different steps you need to take to rob the big Asian banks legally. Download the full report here. As we outlined in yesterday’s feature, first breaking down the DNA of the banking situation is needed. Knowledge is power in this case. Next is getting the insider information using all P.I. skills available to you. By doing so you’ll discover the […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. This week, we go undercover in the world of secret digital espionage… and show how to profit from hackers. The world is full of David and Goliath stories. Tales of underdogs triumphing against the odds. Over the centuries, determined soldiers have overcome much larger opponents. The movie business makes millions from this familiar trope. But most of the time, the strongest kid in school tends to take the most lunch money. So how can small forces hope to […]

The overlord of the U.S. is upset over so-called “bad deals” with trading partners. And with his “America First” policy still at the forefront of politics at home, he might very well just slam the door shut on global free trade. Walls are being put up around the American economy and smaller nations across the galaxy are holding their breath as an all-out Trade War with another superpower is looming… Why Go to Trade War? The once flourishing U.S. domestic steel industry has suffered greatly from the increase in international […]

Throughout our daily lives we are constantly bombarded with news headlines featuring stories of death, destruction and natural disaster. But some argue that there is a silver lining to misery. A country must be rebuilt, after all, boosting economic productivity and growth. Indeed, powerful manufacturing economies have emerged from the ashes, like Japan, South Korea and even America. But does it really mean that disasters are actually an economic benefit? The Broken Window Parable Someone breaks a shopkeeper’s window. Angry, the shopkeeper must buy a new window. But a crowd of people […]

The concept of ‘Path Dependence’ explains how our current decision making capabilities and shaped by previous events and experiences, even though past happenings may no longer be applicable. At One Road Research, we have deciphered that the path to the supposed economic prosperity in Asia is dependent and deeply rooted in the origins of the state, central banks and banking reform. Asia presents hybrid features of commercial banks, and the power of the state to intervene in the economy to orchestrate positive economic outcomes. It should also be noted that […]

Darwin’s “survival of the fittest” is not just for animals. In the corporate jungle, companies who want to grow stronger and gain more territory can acquire weaker companies. This causes the corporation to expand, experience rapid growth and become more powerful. This is typically how conglomerates, and some of the world’s largest economies, are created. In Asia, this is how legends are born. But in the West, it’s how hard lessons were learned. But why the difference? The rise and fall of Western conglomerates The West’s conglomerate story starts in […]

The One Road Podcast, broadcasting financial streams of consciousness One Road Podcast uses relevant excerpts from Peter Pham’s excellent Big Trade podcast series and combines the excerpts into a nuanced take on our investment newsletter content. Are crypto currencies a kind of religion? According to Mark Mobius, yes they are. And are bull markets actually all that bad? According to Mark, no they’re not. For this edition, Peter Pham meets with the veteran investor and emerging market specialist to discuss a wide range of current issues facing investors and the […]

Welcome to the second series of The Great Investment Frontier report (TGIF). Each week, we’ll be taking a look at one of the global issues shaping the world of international finance and investment. Over a series of 10 articles (1 every Friday), we’ll go behind the scenes to uncover the secret trends and shadowy figures behind enormous global capital flows. And show you how to profit. Our previous series helped our readers position their portfolio to gain from conflict in the South China Sea. If you missed it, click here. This […]

Yesterday we looked into the reasons Japan is so sensitive to currency volatility. Today we’ll go into how it manages to keep the yen stable, and how you can profit from it. Ninja Interventions The Bank of Japan (BOJ) doesn’t take the same, blatant approach to currency interventions as other actors, like China’s Central Bank, do. It intervenes silently and gracefully, slowing down the yen’s appreciation before softly retreating into the darkness. The yen then glides seamlessly back into free-float orbit once upward pressure has eased and stability is restored. […]

It’s not just Natalie Fitzsimons, the U.K.’s Monopoly champ, who recommends buying every property possible and building an array of houses to fully exploit real estate’s potential. In fact, this is the strategy of many of the world’s top Monopoly players. And outside of the game room, the tactic has some weight as well. But how much? The difference is that the game’s board is inherently limited. There’s only one “Park Place” after all. Meanwhile, land and property opportunities in emerging Asia seem endless. And yet, they’re not. The continuity […]

Sometimes jail is a good place to be. The best players in Monopoly know, near the end of the game, that jail is actually a safe-spot; it can be costly to move around the board. Putting yourself in fictional jail is similar to locking away your cash. Let’s see if it’s a good idea: #1 Case study – Asian Financial Crisis 1997 There were early warning signs. The IMF warned that the real estate sector posed a significant risk to financial stability. And yet, Asian countries were still caught up […]

Over the past decades one of the key drivers of China’s growth has been the real estate sector. You see, China implements a development model that focuses on land. That makes land the most important source of collateral. The graph below shows that a big part of China’s corporate borrowing is from the real estate sector.   But China’s economy is getting more and more leveraged, and due to large loans and inefficient use, Chinese corporations are now burdened with excessive debt. And the highly indebted real estate sector has […]

The Japanese yen is at some of its lowest levels against the dollar since the big trough of 2015/2016, and it looks like it may even be on its way to hitting the nadir of 2007. But even so, Japan is all set to keep riding the merger and acquisition (M&A) wave, as you can see in the graph below. In recent years, China dominated the M&A volumes. But in an effort to protect its currency, it’s now backing off a bit. And with the U.S. more concerned with Making […]

Before we begin our series introducing the corporate mafia families that own Asia, let’s take a peek into the past and see which modern events have shaped the world’s financial system the most. The world market has been through a lot in the last hundred or so years. For one there’s been major market crashes, like in 1929 the Great Depression, and in 2008 the Big Bank collapse. Additionally, global trade and currencies went from being pegged to gold to the dollar and eventually indirectly to oil. And let’s not […]

In a galaxy not so far away, smaller nations are trembling as Armageddon is threatening the very planet they live on. No, there’s no Death Star pointing its weapon at Earth, and so far, no Imperial destroyers have been sighted on our side of the galaxy. The danger is coming from an impending Trade War between Earth’s most powerful economies: the U.S. and China. And no one is really sure if there are even any good guys in the story… The U.S. and China are on a Collision Course (Shutterstock) […]

Ever since 1975, the U.S. has had the largest trade deficit in the universe. People are terrified because many in the U.S. establishment claim that if it’s not kept in check, national security will be in serious danger. Unemployment will skyrocket and basic industries will be devastated. This scare tactic has convinced many voters into crossing over to the protectionist camp. But how real is the threat? Deficit Difficulties Let’s talk numbers first. In 2017, the deficit in goods and services was US$566 billion. The U.S. could easily fend for […]

As we discussed in our previous daily, Japan’s debt is in uncharted territory. By now you know that the government’s dependence on debt is fueled by its insistence that the Japanese population continue to purchase JGB’s (Japanese Government Bonds). In contrast to other developed countries, the Japanese private sector enables the government to borrow and spend like ‘a drunken sailor’ via a ceaseless acquisition of new debt issuances. On its current trajectory, it won’t be long until nearly all of the private wealth held in Japan is contained in the form of […]

We are concluding our series on China’s incredible growth and it’s subsequent investment opportunities. Throughout this series, we have provided the essential tools and information you’ll need to invest in China’s opening economy wisely and proficiently! But let’s just take a second to recap what we learned from the series: As you know, China rose from extreme poverty to become the second largest economy on Earth. The country has the fastest, sustained growth rate of any large nation, ever. China engineered its economic growth by implementing ACD policies. It strategically […]

Answers are no longer important – A.I and search engines hand them out for free. But questions… questions are the real source of information. From your question we can discern quite a lot about you. At One Road Research, our approach begins with inquiry-based learning. It is the questions themselves and their quality that determines what you know and need to learn more about. Having worked in various financial institutions over the years, we have become continually frustrated with how daily articles and reports are released and disseminated. Far too […]

How do you win the wealth game? In the Monopoly board game the strategy is straightforward: collect the most valuable properties… Interestingly, in the real world, the game of wealth can be played the same way. Natalie Fitzsimons, who reigns as Britain’s current Monopoly champion, coming sixth on the world stage, says that mortgaging everything and spending “every penny” on real estate is the key to winning. But while Natalie makes a fortune in monopoly money, understanding real estate in the real-world can be the difference between extraordinary profits and […]

In July 1997, a war was being waged. A war with no shots or killing, it was fought on the global currency markets by mysterious actors who sought to destroy Thailand’s currency. Following months of unrelenting attacks on the Thai baht, the Bank of Thailand took the decision they had been trying to avoid and unpegged from the dollar. Within 3 months, the baht’s value had dropped more than 60%, and the Asian Financial Crisis was in full swing, with contagion spreading across the region like a wildfire. A scooter […]

As a result of huge amounts of government spending and private speculation in the 1990s, the so-called ‘tiger economies’ in Asia started to overheat. Sectors and industries that received a lot of money – hot spots – bubbled on foreign debt. These developing economies were over-exposed to the international money markets and when things took a turn for the worse, the ‘tigers’ crashed. In the end, their stock markets and currencies lost about 70% of their value. But if you got into the market at the right time, you could […]

Most of us go through life thinking capital is money. But this isn’t true, and misunderstanding the concept of capital will hurt your portfolio, especially if you invest in Asia. In the East, capital still needs to be “unlocked” and this requires either private ownership or ownership by the state. Western countries have gone through this process, whereas developing countries are just catching up. In Asia, private property ownership takes on a whole new meaning. In this article we’ll tell you how Asia is just starting to build its wealth.

The fundamental concept of debt is understood by relatively few individuals. This may strike you as strange seeing as everyone on the planet deals with it on a daily basis. In this article we want to let you in on a simple secret that many financial experts and scholars fail to incorporate into their investment decision making, either through lack of understanding or alternatively, by consciously ignoring it. Throughout this article we will reveal how the money in your pocket is effectively a debt coupon that relies solely on your confidence in the […]

A fair warning to our readers: The term ‘financial repression’ is going to be mentioned a lot throughout our upcoming publications. It is essential that you have a solid understanding of this practice, as its influences have global implications The biggest offenders of financial repression in Asia are undoubtedly Japan and China. But the way in which they run their economies is at opposite sides of the spectrum. The term was first coined by Stanford economists Edward S. Shaw and Ronald I. McKinnon. Simply put, it means that governments effectively rob the private […]

What do salt, cheese and cocoa have in common? Yes, all of them are edible. And, over the centuries, all of them have been used as currencies. In the Middle Ages, salt was used throughout East Africa. The Aztecs spent cocoa beans, which were considered more valuable than gold. And since 1953, Italian bank Credito Emiliano has accepted parmigiana cheese as collateral. (One cheese wheel is worth around US$350). In Asia, tea bricks were used in China, Mongolia and Tibet; and right up until World War II in parts of Siberia. Some […]

When you’re buying a new smartphone, if you want the latest and greatest, you really only have two options: Apple’s iPhone or Samsung’s Galaxy. The notorious Samsung Group (KRX: 005930) is Korea’s largest “chaebol” (conglomerate). And this family-controlled mega company does a lot more than phone technology. It’s got its hands in a wide range of industries, from chemicals to engineering. Below you can see the large business complexities spread out over the Samsung Empire. In fact, the average Korean’s life is completely intertwined with Samsung from cradle to casket. […]

The economic balance of power is shifting from West to East. Global investment is in chaos. While the mainstream media, investment firms and wealth managers play “catch up”, now is the best time to get ahead of the pack and buy Asia. Undiscovered equities in the region are due for major growth. Indeed, many are already growing. But to understand why the next 100 years of investment will be in this region, we need to know the origin of Asia’s wealth.  Let’s step back to see why Asia was the […]

Welcome to the second edition of The Great Investment Frontier (TGIF) report. (Missed the first edition? You can catch up here.) This week, we’re continuing our in-depth look at conflict in the South China Sea. The South China Sea is bathed in blood. For centuries, the region has been home to some of the deadliest conflicts on earth…  from genocidal purges of the Khmer Rouge to nuclear mushroom clouds over Japan and British occupation during the colonial era. Countries in the South China Sea have been invaded, colonised, liberated… and […]

Unlike open economies, China’s mainland stock markets in Shenzhen and Shanghai don’t capture the value of the country’s tremendous growth story. Lax regulation, speculation and a heavy government hand all make Chinese markets risky places to invest. After years of waiting, the world’s most important index provider, MSCI decided to include mainland Chinese stocks in its index, starting in 2018. That’s a huge deal. MSCI’s decisions affect trillions of dollars of trading in the stock market. Fund managers and investors use MSCI-controlled indexes as a benchmark to build exchange traded […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. In this series, we’re covering China’s Trojan horse for global domination: One Belt, One Road (OBOR)… and how you can profit. This week, we delve into an often overlooked construction material that will be used in almost every single OBOR construction project, and we’ll tell you which Chinese company is going to benefit. When China’s head of state, Xi Jinping, announced the “One Belt, One Road” initiative in September 2013, it was clear that demand for construction materials […]

China’s entire financial system is held together by (1) the confidence of its citizens, (2) high private savings, and (3) monetary control. It’s in China’s interest to keep these pillars intact. But as its citizens become wealthier and forces abroad threaten its closed economic system, cracks are starting to show.   Huo zai dang xia: “living in the moment” Today’s global financial system is almost wholly reliant on the heroic savings rates of the Chinese people. But younger generations are racking up more debt. Instead of following in their parents’ […]

When a product has a “Made in China” tag, what do you think? Most people think of low-quality, low-cost production. But that’s all about to change. The Chinese government wants to upgrade China’s image abroad. Beijing no longer desires to mass-produce cheap goods for the world. It wants to be known for quality, innovation and new technology. Here’s how they’re doing it… and how to invest in China 2.0.   Moving up the value chain Industrializing countries across the world tend to move from low-cost into high-quality manufacturing. This was […]

Tech giants like Google, Apple and Facebook might seem completely cemented into today’s world. But what if I told you their global tech monopoly is actually wavering? The tech beasts of the West are being stalked by Eastern tigers, positioning themselves to become the new kings of the internet jungle.   Chinese tech stocks are incredibly profitable investments. Returns are soaring and there’s no end in sight for continued growth in China’s “new economy” – led by booming tech and service sectors. Not even wildcard President Trump can stop this […]

MSCI announced last year that it will be adding mainland Chinese stocks (A-shares) to its Emerging Markets Index for the first time, ever. History shows that a country’s market usually pops after it joins MSCI’s elite club of emerging markets. Skyline of modern buildings in Beijing’s Central Business District at dusk. Expect more buildings like this popping up across China’s major cities. (Shutterstock) China is one step closer to joining the global financial elite Four years ago, China began negotiations with MSCI to join the Emerging Markets (EM) Index. They […]

Asian countries – especially China – have been hesitant to adopt free markets. They are unstable and difficult to manage. As the West’s liberal free trade policies that set the stage for yesteryear’s economic growth burn out, a new economic order – engineered by China – will shape the next century of investment. Innovation will be controlled… economic growth will look different… and there will be a challenging force to U.S. military dominance – all for Asia’s benefit. But there’s plenty of room for profit. Before there was Galileo or […]

China is the world’s factory. From electrical machinery and computer parts to furniture and footwear, it’s hard to find products that aren’t “Made in China”. Soon, China will be the world’s prime source of energy. We will all be “Powered by China”. China 2.0 China’s economic miracle was built on “Grasp the Large, Let Go the Small”, a policy that was part of a wave of industrial reforms implemented by the Chinese government in 1996. Bureaucratic jargon aside, “grasping the large” meant that the Chinese government gave preferential treatment to certain companies in […]

Since China’s stock market debut in the early 1990s, hundreds of billions of foreign dollars have flown into Chinese companies. While some observers cite the vast amount as a sign that China’s capital markets are “modernizing”, in reality, it’s merely the Party’s ploy to fund China’s cash-strapped state-owned economy. In the 1980s China had a big problem. The government had magnificent plans to build 22 major industrial projects, but couldn’t pay for them. Neither the national budget nor China’s banking system had enough capital to fund all of the projects. […]

During the 1960s to the 1990s, the economies of South Korea, Hong Kong, Singapore and Taiwan were exploding with growth. With speed and efficiency, these four “Asian Tigers” clawed their way up the development ladder.  Three have achieved the esteemed “developed” status from MSCI. And yet, MSCI still considers Korea an “emerging market”. So why is Korea’s economy considered a tiger cub? Korea’s corporate culture hinders its market As you remember, Korea’s economy and stock market are dominated by diverse, family-controlled conglomerates known as “chaebols”. These companies are as large […]

So now you know all the ins and outs of Asia’s corporate mafia families. How they rose to the top, fighting tooth and nail. And with heavy-handed government support, they continue to rule Asian business like well-connected gangsters. These aren’t your average “mom and pop shops”. They are incredibly strong, diverse and enormous companies that dominate Asia’s corporate world. By acquiring weaker companies, usually through constant M&A, these corporations expanded, experienced rapid growth and became more powerful beasts. For instance, Korean “Chaebols” like Samsung, Hyundai, Lotte and LG served as […]

The Great Investment Frontier report (TGIF) looks at global issues shaping the world of international finance and investment. Over a series of 10 articles (1 every Friday), we go behind the scenes to uncover the secret trends and shadowy figures behind enormous global capital flows. And show you how to profit. We just finished our first TGIF series on the South China Sea, one of the most combustible and war-torn regions on earth. Sandwiched between Hong Kong to the north, the Philippines to the east and Vietnam to the west, the […]

Japan, one of the world’s most influential and developed nations, is carrying a colossal debt burden on its shoulders. With a debt figure estimated to be around 233% of GDP, it is the most indebted country in the world. The next highest country is Greece with 177% – it almost looks small in comparison. With these eye-watering levels of debt, you’d expect that Japan would be an investment ‘leper,’ with foreign direct investment (FDI) avoiding this fragile and debt-infected economy at all costs. We’ve observed debt levels climbing consistently since […]

Welcome to our special series highlighting snapshots of our Bank-Robbing guidebook: the Asian Capital Development (ACD) Special Report. For each day this week, we are taking a look at the different steps you need to take to rob the big Asian banks legally. Download the full report here. Holding a fixed portfolio through a debt cycle’s ups and downs is definitely a zero-sum game. This is why we implore you to always be on the move. Debt is a lit stick of dynamite – those holding it at the end […]

Capital markets are like soy sauce, both need the right ingredients and time to “ferment”. But Asia’s capital markets are young and missing an ingredient or two. That means bank loans – not the stock or bond markets – are primary capital-raising sources. This is very different from older markets in places like Europe and the U.S. And it affects how you invest. As the salty legend goes… about 750 years ago a Japanese priest arrived in the small coastal town of Yuasa, Japan after a trip to China, bringing […]

From 1910 to the end of WWII, Korea was under Japanese control.  After the war ended, the exodus of Japanese authority left behind a variety of operating plants, firms, land, infrastructure, and inventories.  Around 166,301 formerly-Japanese-owned assets were inherited by the newly freed state.  By themselves, these ownerless properties accounted for 30 percent of the country’s total wealth. A gift from the enemy In order to spark development, the government gave these prized properties discount price tags. They set them at or below pre-WWII book value. To top it off, these […]

Investment is pouring into a young island republic in Asia. But the country is going bankrupt spending on state of the art development projects, seemingly as these ‘hot sectors’ are not paying off. In this article we’ll tell you why as well as mention opportunities in a region plagued by big government. Right now, we are seeing a lot of public and private investment flow into several sectors in a small emerging market just off the coast of Australia; a country called Timor-Leste. But is the potential of profit real? […]

Asia’s banking system has been integral to the region’s “economic miracle”.  Since banks play such a huge role in the each country’s economy, they have become uniquely safe investments in emerging markets. And nowhere, has this been more apparent than in China. Banks are an arm of the government As we’ve written before, China’s government directs state-owned banks to lend to companies in strategic sectors of the economy. This is system is called Asia Capital Development (ACD) and can be viewed as a “blueprint” for economic growth. Due to banks […]

Did you know, the world’s oldest company was Japan’s 1,339 year-old temple building Kongo Gumi?  For a long time, Asia has been the fountain of youth for companies. That’s because Asia’s family-controlled companies are as old and powerful as Italian mafia families. They run the Asian business scene, controlling a wide range of sectors. They’ve also got their governments in their pockets, with subsidies, tax breaks, and other favorable legislation handed out left and right. Some even have their own criminal records, from war-convicts to modern day corruption scandals. Expanding […]

In the race to become Asia’s most important financial center, Hong Kong and Singapore are neck and neck. But one is pulling ahead. The growth engine behind each economy will determine which stock exchange will win. Asia is a battleground. When the Warring States Period ended in Japan, the country unified under the samurai lord Hideyoshi. His first goal was to conquer Ming China via Korea in 1592. Each army was roughly equal, except in naval power. Japan’s army depended on the navy for supplies, which the Koreans quickly exploited […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. So far in this series we’ve documented the largest infrastructure project the world has ever seen, why it’s being built and a few ways to profit. If you’ve missed our recommendations, catch up by clicking here and here. Growing demand for dirty energy Infrastructure and energy go together like soy sauce and dim sum dumplings – one without the other would be a disappointment. Likewise, as China gives the ancient Silk Road an infrastructure face-lift through the One Belt, One […]

In the ultra-competitive world of global finance, big banks hold the balance of power across many countries. The biggest influencers of all, however, are the central and global banks, such as the International Monetary Fund (IMF) and the World Bank. In future publications we’ll be explaining in detail how these organizations, through the rules of the ‘Washington Consensus’ (effectively Western Civilization’s guide to economic development) attempt to exert influence on developing Asian nations. Also, please look out for our special report on the series of publications under the title of […]

Previously, we talked about how (at first) the state, not the free market, is the backbone of successful economic growth. Like learning to ride a bike: first, a kid needs to practice with training wheels before he can ride on his own. And even when he’s confident on two wheels, it’s going to be some time before he can compete with older children. In this article, we’ll show how Japan, South Korea and Taiwan succeeded on the global stage while their neighbors struggled. What was the secret to their success? […]

For better or worse, central banks drive economies. Understanding who controls them, what they wish to accomplish and how they work are the first steps you should take to become a better investor. But central banks aren’t all created equal. Asian governments tend to have a tighter grip on them than we are used to in the West. The awkward couple Central banks dictate how economies work. But governments do, too. Sometimes, they have opposite goals – making them uncomfortable bedfellows. The main role of central banks is to try […]

We hope that you enjoyed our series on debt and credit. Now that you understand how money and debt creation are the fuel for economic growth and prosperity, you can change your investment strategy to capitalize on this insider knowledge. We’ve described to you how money is created through debt, a concept that many individuals working in high finance fail to fully grasp. Knowing that paper money is merely a token of exchange that relies solely on the faith of the user to ensure it maintains value is the ‘holy […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. So far in this series we’ve talked about rising tensions in the South China Sea and how this has led to an escalating arms race in the region. But while an outbreak of armed conflict is possible… it’s not preferable. No one wants more bloodshed. Not least because militaries don’t come cheap. And China has a far more effective weapon at its disposal in shifting the balance of power – capital and debt. China is Rising China’s economic […]

In the last daily of our Conglomerates series, we walked you through Korea’s Samsung Empire. But down in Asia’s wild Southeast, conglomerates tend to be bigger, more diversified and more active. In the land of frontier and emerging markets, institutions are weaker. To bypass their inherent weakness, companies must own a wide range of functionalities in order to do business effectively. For that reason, the diversified model is more powerful in Southeast Asia. And a prime example of a strong Southeast Asian conglomerate is the Philippines’ very own Ayala Corporation […]

China’s US$9 trillion bond market recently opened to foreign investors, but many people make the mistake of thinking China’s debt market is developed and prices are based on supply and demand. It’s not. In fact, bond markets across the region are designed for and by governments.   If you own a business in a developed economy like the U.S. and need to raise capital, you can take out a loan from a bank, issue a bond or list your company on the stock exchange. But if you’re a business owner […]

Imagine the words honor, family, power, money and loyalty, and what do you see? Probably Italian mafia families. But what if I told you those are also the characteristics of the families that control some of Asia’s largest companies? Many of these companies are conglomerates, meaning they own multiple companies in unrelated businesses. And ironically, the Godfather, Vito Corleone, and the leaders of Asia’s largest brands like Samsung, Hyundai, Sumitomo, and Mitsubishi have more in common than meets the eye. That’s because Asian conglomerates run the business scene like well-connected […]

Stocks, bonds, and bank loans usually fall under a mixture of public and private control in Western countries. In Asia, the government controls all capital-raising routes. Last time we discussed how a capital market – that includes the bond and stock market as well as bank lending – needs the right “ingredients” and amount of time to fully develop. We also talked about how government intervention has made stock and bond markets in Asia unusually small sources of capital and the amount of bank loans in the system extraordinarily large. […]

Investors around the world have their eyes on China’s bond market, which is the third largest in the world. But it’s undeveloped and operates like no bond market you’ve ever seen before. To safely expose your portfolio to the world’s most exciting marketplace, you need to know who controls the bonds and what they want. When the sponsors of Yizheng Chemical Fiber project approached the Chinese government for funding in 1980, they didn’t realize they were kick-starting the country’s bond market. The ambitious development project desperately needed capital. At that […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. This week, we look at how rising tension in the South China Sea has led to a spending spree on arms across the region… and bumper profits for defense companies at home and abroad. China’s growing assertiveness in the South China Sea is giving its neighbours sleepless nights. Vietnam, Japan and the other countries claiming parts of the region are spending more and more to upgrade their armed forces. And U.S. defense companies are cashing in. U.S. defense […]

Welcome to the latest edition of The Great Investment Frontier (TGIF) report. So far in this series, we’ve talked about China’s global trade ambitions executed through One Belt, One Road (OBOR). And we’ve also recommended investing in this company that’s building the Indochina Economic Corridor, which is just one of many OBOR projects. With trillions of dollars pouring into the ambitious project, we don’t want you to be left behind, considering there are plenty of investment opportunities. Over the past decade, China has begun revitalizing the two ancient trade routes through The Silk […]

China’s banking sector is the largest in the world. But it’s undeveloped and slow to “open”. That makes investing in this sector extraordinarily difficult, especially if you aren’t from China. After a lot of digging, we’ve uncovered a few banking gems – both domestic and foreign – that you can add to your portfolio. Hemmed in by Chinese government regulation, foreign banks are heeding the ancient advice of military tactician Sun Tzu, strategically aligning their (weaker) forces to take on China’s big boys in banking. Here’s who’s winning so far […]

Welcome to our special series highlighting snapshots of our Bank-Robbing guidebook: the Asian Capital Development (ACD) Special Report. For each day this week, we are taking a look at the different steps you need to take to rob the big Asian banks legally. Download the full report here. There are many factors that have combined to make Asia’s banks so easy to profit from Bank robberies are great case studies for the economics of crime. They are premeditated affairs in which an architect has evaluated (consciously or not) the rationality […]

Usually when stock markets boom, everyone is excited. Feverish enthusiasm accompanied soaring stock prices in Asia Pacific as the emerging tiger economies took off in the 1990s. Today, despite assets in Asia Pacific and around the world being in the midst of another bull run, you’d be hard pressed to find the same fervor. You can see in the graphs below that both stock and housing prices across Asia Pacific are up.   Chinese housing prices are the only exception. The country’s property bubble burst in 2007 and has been […]

Following government orders, central banks and commercial banks worked together to make the “Asian Miracle” happen. Over the past few decades, Asian economies have all seen double-digit GDP growth and relatively stable political regimes. But in the process, they’ve bailed out the bad guys, muzzled entrepreneurs and forced taxpayers to pick up the tab. How central banks work The majority of commercial banks in Asia are technically “independent” except for some cases in China and Vietnam. At times, they can rise above the government and partner with non-democratically elected entities […]

The economic miracle that took place in Asia has been widely documented. Living standards increased dramatically, with the number of people living on less than $2 USD per day falling by a half. Average incomes in Asia rose rapidly, in some areas by a factor of 100% and in others as much as 400%. The catalyst for this was China joining the World Trade Organization in 2002. Asia’s contribution to global GDP grew from 11% to 21% – but, as we shall see, debt distorts all these numbers tremendously. What […]

“No Single Currency Regime is Right for All Countries or at All Times” – Jeffrey Frankel Yesterday, we began with the story of how the Bank of Thailand unpegged the baht from the dollar and sparked the Asian Financial Crisis of 2017. But why did they do that? According to the Malaysian PM at the time Mahathir Mohammed, it was due to the “unscrupulous, unnecessary and immoral” actions of a group of speculators led by George Soros, who had bet on the baht’s demise. According to Soros, who called Mohammed […]

On their surface, stock markets in Asia look “normal”. Some of the largest companies in the world are traded in this region. Their capital-raising abilities are legendary. But unlike stock exchanges in New York or London, emerging Asian stock markets were created to funnel foreign cash into state-owned enterprises, which are usually inefficient. That means emerging market indexes (and the funds that track them) are overexposed to unprofitable companies. However, that doesn’t mean emerging economies aren’t on fire. There are plenty of hidden gems to be unearthed in the Wild […]

Economic development is a lot like learning math. To be able to solve calculus equations, people first learn to count, then basic arithmetic, and so on. Likewise, roads and ports (infrastructure), central banks (institutions) and education (human capital) are all important inputs into economic growth and are developed over time, sequentially. Economies are composed of sectors and typically grow in the three stages we have outlined in previous articles, agriculture – manufacturing – service. We have also written about how the policies of Northeast Asian governments encouraged their economies to […]

Free markets can be dangerous at times. When free market ideas are implemented into or onto state-directed markets they usually go haywire, sometimes crashing the system. Over the past decade, China – a state-directed economy – has increasingly “freed” its market by loosening capital controls. Will we see another 1997 Asian financial crises as a result? In our last daily we wrote about how China has a habit of using capital controls and wide interest rate margins to “erase” government debt. But both policy tools are becoming less effective and […]

Banks in Asia are big. The five largest banks in the world are all located in Asia; four of which are Chinese. Asian banks are seeing their highest ever returns right now – attracting investors from around the world. But you need to know that the growth of the banking industry is government driven, and ahead, we’ll show you how credit distribution is manipulated and what that means for your portfolio. What really drove the so-called “Asian Miracle”? Was it innovative entrepreneurs toiling night and day that built the region’s […]

Our last article described how most people think of capital as something tangible, like cash in the bank or shares traded on the stock market. But it’s much more than that. Capital is something that generates future income, growth & profits. So in that sense people are capital too. This is known as human capital, and it is the economic value of a person’s knowledge, skills and labor. Natural resources are important, but they are inherently limited. Human capital on the other hand is what defines a country in the […]

The service sector is the gold standard of the world; it is first class on an airplane and the VIP seat at a fancy Gala.   Services are where all countries want to be and it is absolutely where you want to ultimately invest.  In this series we’ve talked a lot about how countries economically develop and have noted that most Asian countries – to varying degrees – have followed Asian Capital Development policies.  Manufacturing, as we wrote yesterday is a huge strength in Asia, but who leads the charge in […]

Welcome to the third edition of The Great Investment Frontier (TGIF) report. (If you missed last week’s edition, you can catch up right here). This week, we continue our special series on the South China Sea… and uncover what brought the region to the brink of war. On October 10th 2017, a U.S. Navy destroyer (the USS Chafee) sailed within 12 miles of the disputed Paracel islands in the South China Sea… the fourth “freedom of operation” mission since President Trump came into office. At the same time, the U.S. […]

The secret to the fastest growing economies in the world isn’t free markets. It’s a banking system that doles out huge amounts of credit to grow strategic sectors. In our following article, we will delve into how Asian banks create and distribute money, and how the result is dangerous asset bubbles. In our previous set of publications on debt and credit we discussed what money is, and how it is created. Let’s recap in this article, viewing the process from the standpoint of a central bank. Paper money has no […]

If you ever watched the X Files, you may remember how evidence of government meddling was frequently lost in fires or other suspicious circumstances. The world of currency manipulation is not that different. In the first article of our Forex series last week, we looked at how currencies and exchange rates have evolved over time and how governments have developed new ways to manipulate them. Today, we investigate how secretive government meddling has led to massive amounts of foreign debt tied to the region. But just how dangerous is this […]