Jayant Bhandari

China will continue to grow—III

(Also, VMS Ventures)

Recently, I spent seven weeks in South America. Linked is the story of my travels and thoughts on the subject of development economics. Does democracy and public education lead to social improvements? I disagree in the article. These are actually worsening the situation.

Also, linked is an article I wrote on what negative-yields symptoms of: loss of reason in the society. In my view, the world is in a vicious cycle of negative-yields and irrationality. It is time to consider how people with economic surpluses in the irrational societies of the Middle East and South East Asia have historically protected their wealth: by buying gold.

Now, back to China...

This will be my third write-up on China. Earlier I wrote that I do not agree—based on reasoning provided in the mainstream media—that China is slowing down and that it is devaluing its currency. Mostly I see regurgitated information. My earlier notes are linked here: China-I and China-II.

I have got many emails reminding me that China “merely” copies foreign technology, and that bribery runs rampant there.

Dear readers, it is not as easy to copy technology as some people think. If copying were all that easy, South-East Asia, and Africa would be paradises. In fact, all that the Rest ever needed was to start copying western technology 200 years back and they would have turned into paradises. When you visit a poor country and you see a girl in school-uniform with a pot of water on her head, you should be asking why she has not yet understood and copied the concept of the wheel. Not only China has done a good job of copying what others completely failed in, what comes out of China is increasingly of high quality.

Regarding bribery... Yes, financial corruption in rampant in China. But so what? Everyone who works for the government anywhere is by definition corrupt. They get paid from money stolen from people using threats. Is an American government officer who takes $0.25 million per year salary albeit in a so-called legal way any less corrupt that a Chinese official who takes it under the table? In my view the latter is less corrupt for at least he knows his moral position.

Also, those who have spent any time in Africa, Middle East and South-East Asia know that the problem is not so much with bribery but with sheer and utter irrationality of people there. Officers in these countries trouble you, take bribes, and then do not do the promised job.

Now, about companies…

→ VMS Ventures (VMS; $0.065) is being acquired by Royal Nickel (RNX; $0.19). You will have two choices on what you want to be paid in. The upside is between 20% and 35% depending on what you choose to convert your VMS shares into.

→ NioGold Mining (NOX) is being acquired by Oban Mining (OBM). There is a 5% or so arbitrage upside in owning NOX. As I wrote in my last musings, I am not happy with how OBM is raising money all the time—to build an empire rather than to build shareholders value—so I no longer see myself as an investor, but as a trader.

I will have more companies for you to look at very soon.

Finally, if you are a recent graduate or still studying, consider applying to the Institute for Liberal Studies’ Freedom Week, to be held in Vancouver and in Montreal.

Of course, do not forget to attend a yearly seminar, Capitalism & Morality, I run in Vancouver.

On 6th March 2016, I will be speaking at PDAC on the negative-yielding economic structure of India and why it is time to do what Indians do: buy gold.

Warm regards,

Jayant Bhandari

www.jayantbhandari.com

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