I almost missed an unusual 100th birthday. In 1907 Bakerlite was invented.A Belgian scientist named Dr. Leo Baekeland was responsible for the invention of Bakelite. The first synthetic plastic. I can remember when my parents got rid of the old accumulator wireless and bought a brand all English Bush Radio. In its bakerlite housing.Within 15 years it had taken the world by storm. You could find everything from electrical plugs to ornate jewelry made from Bakelite. It was even used on the dashboard face of the Mercedes Benz car.
An astute investor would have made a pretty penny investing in the new technology. Today it is difficult to spot these bargins. Myself? Well I am a ‘no risk’ investor. I have nt the money to lose so invest in reliable stock. But the warning signals are flying – sooner rather than later a ‘Market adjustment ‘ will take place. The market has been on the up for 4 years – all very good for our pension funds but . . . .what goes up. .
China’s runaway economy is, sooner or later, going to hit the buffers. GDP is expanding by around 10% a year when it does fly off the rails the impact is going to be huge. The Chinese government has been furiously blowing its whistle to warn of the dangers, but many of the passengers are enjoying this so far profitable ride too much to want to get off.The derailment, almost certainly, will come from the stock market.The Chinese and American economies are so interlinked that when the dominoes collapse we will feel the draught. Having soared by 300% in the last two years, Chinese shares have almost nowhere else to go but down. With four million new accounts opened each month, the value of stocks traded in Shanghai and Shenzhen is now higher than all the rest of Asia combined, including Japan. And we can remember the effect the japanese share index crash had on the rest of the world in the 1990’s. February’s uncertain markets showed that China can already move world markets, and when the meltdown comes we can expect falling metals and oil prices and currency market turmoil. Time to get the piggy bank out methinks !