In an interview with Mina Kimes of Fortune, Stephanie Pomboy, a market strategist who has enjoyed considerable success in recent months, offers her grim prognosis for the developed world and the brighter future of emerging Asia:
In the long term, clearly you want to be building exposure to the new world order, which is going to be shaped by emerging-markets economies. The increasingly indebted and decrepit developed world will play a smaller role. I’m inclined to go long on emerging Asia, because those countries are primarily geared toward China. My view on China is that it may be a bubble, but it’s a centrally controlled economy. So it’s a bubble that can go on longer than you can remain solvent by betting against it. Their foreign-exchange stockpile is “ginormous” — that’s a technical term. They could buy 10% GDP growth for several years with just the foreign-exchange resources they have at present. [Emphasis added]
It’s hard not to be charmed by Pomboy’s cynicism and apocalyptic worldview. The operative question for China is how many years is “several,” and what exactly will Chinese officials have to do to hit their target.