5 JUNE 2012
Asia Investment Guru Hu Li Yang’s Predictions On Europe
By Daniel Loh
If you had came for Asia’s leading investment leading guru Hu Li Yang’s seminar last September, you would recall that he talked about the Europe situation. Ten months later, his predictions did seem to come true.
Last September, he urged all of us not to worry about the European crisis. It is in fact a golden opportunity to go into the market. Indeed, this January, the Dow Jones Industrial Average reached a new height since 2009 and the European crisis seemed behind us.
At that time, he mentioned that the stock market in year 2012 will continue to have potholes for us to fall into. “Do not expect a smooth sailing journey all the way to elections. There will be bumps along the way.” And yes, he got it right again. Just when we expect the Dow to continue its first quarter’s marvelous run, the second quarter put a sudden halt to it.
Europe’s problems came back again. China’s slowdown became a major concern which caused oil prices, commodities, energy and industrial sector stocks related to China to decline sharply. All stocks related to China, whether they are listed in Singapore or US, went down. Suddenly, the US also seems to be facing economical uncertainty with three months of continuous shortfall in employment figures. Even the famous fast growing BRIC nations, Brazil, Russia, India and China were forced to cut interest rates to save their economy. China, being the latest to join the crowd, would likely decrease interest rates this month.
Of course, will all these troubles eventually lead to a recession?
Will the problems of Italy, Spain and Greece bring down the world? Hu does not think so. This problem will be solved. In fact, last year, Hu had predicted how the Eurozone will shape up. He even drew the idea from the story of how Romans fought the war in the past. There was a time where the Romans would tie up eight horses together to enhance their fighting capability. Gradually, they found out that although eight horses did increase the capability, when one horse got sick, it would affect the rest of the seven. Mobility was compromised. Hence, the Romans began to reduce to four, and later to two.
Hu said, “This is identical to the European problems. The way to solve it, is to kick out the incapable nations. Those ill horses. One by one. Until the capable ones are left behind. He predicted that Europe would do it within the next two years.”
Again, it does seem very likely now as Greece may be the first country to be axed. With this weekend’s election, we seem to have accepted the fate of Greece to rest in the hands of the opposition. It is also no secret that the opposition might not want to accept EU’s terms and regulations. With each passing day, we are growing more accustomed to the fact that Greece might be out soon.
Will Greece’s exit lead to a collapse in the European Union?
Hu thinks otherwise, “Greece’s exit will be good. The only best solution now is to eliminate the weakest horse. It will be painful but that is still the best situation.” Only then, we may see the Dow reach its glorious all time high of 14,198 points by this year.
Perhaps we should pray and hope that Greece exits fast.
Publish date: 15/06/12