This Stock Market Could DOUBLE in Just Three Years and Nobody Wants to Buy!

From what I can tell, I have been a lone voice in the wilderness this year about China: one of the very few analysts in the business who is steadfastly bullish on China’s economy.

Practically everyone else on Wall Street is bearish right now: China’s stock market is crashing … China’s debt bubble is about to burst … China’s economy is collapsing.

It’s all baloney! Nothing could be further from the truth, and they’re all dead wrong about China!

I travel to China frequently, and what I see on the ground doesn’t square with what you’re hearing from Wall Street analysts who have probably never ventured to the country. I’m here to tell you, rumors of its demise have been GREATLY exaggerated.

In fact, based on what I’ve seen recently, there’s no doubt in my mind that China’s economy is not only for real, it’s poised to accelerate by the end of this year and for many years to come. Plus, China’s stock market looks poised to surge higher again, too. Here’s why …

First, China’s economy IS slowing, granted. It’s just the law of large numbers at work. China’s GDP growth rate has averaged a blistering 9.7% annual pace over the past decade. However, GDP “slowed” to 6.7% last quarter, but that’s no reason to hit the panic button.

Look, China has grown into a $10.3 trillion economy today — the world’s second-largest — so naturally it can no longer grow at double-digit rates. It’s just simple math.

Second, China’s economy is still forecast to expand by 6.5% to 7% this year. That compares to average growth of just 1.7% for the world’s major developed economies including the U.S., Europe and Japan. If 6.5 to 7% growth equals a collapsing economy, I’ll take it any day of the week.

China’s growth is still the envy of practically every
other nation on Earth in today’s slow-growth world.

The truth is, China’s growth is still the envy of practically every other nation on Earth in today’s slow-growth world.

Third, China’s economy is in the midst of a massive transition from an export-led growth machine over the last several decades, to an internal consumption-based economy today. Of course it’s not always going to be a smooth transition. There will be bumps in the road along the way, as we’ve seen.

Just like a giant supertanker, it will take time for China to turn its ship around and embark on a new course, but recent data shows Beijing is succeeding in this transition.

China’s new consumption-led economy is on course, just look at the results for yourself.

* Last year, rural incomes exploded higher, rising 8.9%, and quickly catching up with urban income levels in the country.

That means over 600 million upwardly mobile Chinese consumers are opening up their wallets.

* Sure enough, retail sales in China averaged a scorching 10% growth rate so far in 2016. That’s miles ahead of U.S. retail sales, which flatlined at 2.7% year to date.

And it’s not just big-city folks in Beijing and Shanghai buying the latest, greatest smartphone, either.

* China’s fast-growing rural countryside is where the real story is, as consumption jumped nearly 12% at year-end 2015 over the year before.

And owning a home isn’t only an American Dream anymore either … it’s a dream that’s coming true for millions of Chinese consumers also …

* Compared with U.S. housing starts, China’s housing market is expanding almost twice as fast as the U.S. New home prices surged higher last month in 60 out of 70 of China’s main urban centers, and prices are soaring even more in rural areas.

This is just the opening act of China’s new consumption-led economic growth story.

The World Economic Forum forecasts that Chinese consumption is about to explode an estimated 50% higher over just the next four years. Soaring to $6.5 trillion, up from the $4.2 trillion Chinese consumers spent last year. Is it any surprise that China is now the world’s largest automobile market?

It won’t be long before China will be the world’s biggest spender on all kinds of consumer goods and services.  And sooner than you think.

Yet China’s Shanghai stock market is down nearly 44% since it peaked last year, in June 2015. That’s because most global investors, who have never set foot inside China, believe the gloomy headlines and steer clear of China’s stock market.

That’s a major missed opportunity that you and I can capitalize on.

China’s stock market has already bottomed. A major indicator for me: It’s always lonely at the bottom, when the blood is running in the streets. No one wants to touch Chinese stocks with a ten-foot pole — and in my book — that is precisely the time to buy with both hands.

Mark my words: All of my economic and cyclical models tell me that China’s economy will not only keep growing, but also soon surpass the U.S. economy in size. And its stock market will more than DOUBLE over the next three years!

Now is the time to buy China, but a word of caution is warranted: Don’t get suckered into the faded glory of China’s stodgy, old, state-owned enterprises. These blue-chip stocks may have led the charge higher during China’s export-led boom last time, but now the game has changed.

China’s new consumption-led economic machine means a whole new crop of smaller, nimbler stocks could be the big winners this time around. And these are precisely the stocks I’ll be recommending to readers of my Real Wealth Report as China’s economy and financial markets continue to boom in the years ahead.

Best wishes, as always …

Larry

P.S. To help you get ready to take full advantage of China’s next great bull market, I want to send you a complimentary issue of my flagship Real Wealth Reportjust click here to download now.

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 44

polywan June 29, 2016

it will end of China syndrome

Eagle495 June 29, 2016

It all depends on when we wake up to the need for a "Made In America" policy to stop the hemorrhage of Good Middle Class jobs to China. Even if our leadership doesn't recognize the economic perils, it is only a matter of time before China does something militarily that awakens the world to the growing military threat that China poses...

Edouard D'Orange June 29, 2016

So you're a Donald Trump supporter. Donald welcomes you onboard..

COBS June 29, 2016

Edouard, why do you waste your time trolling around this blog adding nothing to the conversation? But since you opened the door... Open your myopic eyes and do some reading about what China is doing with island building in the South China Sea. This isn't some made up garbage from Trump, it's a fact that they are getting all of their neighbors worried with their aggressive (and illegal) behavior. And working for a company that sadly has moved a lot of work to China, it is well known that they are the most untrustworthy country out there. They steal our technology without blinking an eye.

Mike June 29, 2016

Trump proves that even a blind pig can find an acorn. Bernie can find that acorn without invoking hate. More to the point both the left and the right can find common ground on certain issues the center (of both Parties) is hopelessly sold out to corporate America.

Eagle495 June 29, 2016

Mike, I really doubt that the Conservatives can find their way to the crapper.... After all, they started this with Nixon opening China, then Reagan and H.W. Bush dreaming up and sponsoring NAFTA and GATT which took millions of Middle Class jobs from America, lowered the standard of living for most of America and made China a Communist Military Power like the world has never seen..... Much like Ford and Preston Bush trading with the Nazi's before WW-ll, I'm left to wonder if these people are just plain stupid or have they no foresight? Personally, I'm betting that Hillary will be President an the Democrats take back Congress, the Supreme Court returns to the left and real means are begun (Like a "Made In America" Policy) which greatly reduced purchases from China and in so doing breaks the military back of China averts WW-lll....

Mike June 30, 2016

I was actually thinking about the long dead conservatives who put America first like Eisenhower and Dirksen. Ron Paul also opposes the TPP, NAFTA and the other corporate trade deals and like Dennis Kucinich opposed military adventurism.

Alfie July 3, 2016

Hey Cobs. So what's wrong with China doing that in the South China Sea? The clue is in its name.It's their backyard and they can do what they want. What's the USA doing there thousands of miles from their backyard? They should mind their business.

Scone June 29, 2016

You don't think that the strength you perceive the markets and overall economy of China could be rooted and buttressed by its massive and growing holdings of gold?

Narendra June 29, 2016

Mr Ruchir Sharma of Morgan Stanley and author of break out nations ..personally moved on streets of China and seems to be worried on heavy debt on China. Fear of currency devaluation persist. .your comments

Tom Plotts June 29, 2016

Larry it then looks like in China then the FXI then would be the best odds! Along with gold on the next dip early next Month. Keep up the good work and thanks for everything on the investment side. Regards Tom

Mario June 29, 2016

Hi Larry what I want to know from you is ,The Gold price ,will still come down to $ 1140-1160-1180 level like you been saying all the time ( if it so when !) or the $ 1300 is the bottom level ??? I think it will still come down , but most of the people and Brokers ( with which I got fight all the time !!!! ) believe that $1300 is the bottom price!!!! Larry I must tell you, I am a grate admirer of your, I think you are a Prophet sent by God !!!! Kind regards Mario

Jv July 3, 2016

I might add that I'm still waiting for silver to come down to $14.75 so my order can be filled. That's what Larry recommended we do. Keep up the good work, Larry.

carl stifter June 29, 2016

Larry, Time is our most valuable asset. As an investor, I read the bylines(buylines) of many pundits. Most are a waste of my time. You are not. Somehow, I will obtain the money to invest in your valuable services that will lead me to a secure retirement. Thank you Carl Stifter

Peter de Luca June 29, 2016

Larry Nowhere in your article do you mention China's heavy debt. Yes, housing has grown but what about all of the ghost cities in China. If China is in such great shape, then why do they have strict capital controls?

.OWZA June 29, 2016

Larry,I am inclined to agree with you.All those pundits saying negative about China economy is overly exaggerated.Some of them have never even set their feet in China,unlike you making several trips regularly. You had first hand information what is going on there.I follow your writings closely about developments in China.Keep on writing Larry.

Bonnie E June 29, 2016

Richard, congratulations!! Your gamble on JNUG, which you shared last week, paid off big time! Great job!

Bonnie E June 29, 2016

Larry: So glad to see you return to the Dow 31,000 theme....I know now how to invest! Thanks

john June 29, 2016

Yea Larry. Whats your prediction this week for gold.. Give us your take no bull!!

Tom S June 29, 2016

Larry is a lone voice for a reason.

John Mott June 29, 2016

Seeing that gold and silver have gone way past what was expected are we still going to see them drop back to 1140?

cliff June 29, 2016

But will the upsurge in the Chinese economy translate into spikes in the value of the US exchanges as well? Just Curious--since that's where my $$$ is... Clifford

Mike June 29, 2016

One of the causes for the Great Depression was that productivity had surpassed consumption. In short there was much more capacity than the market could absorb. We are and have been seeing this for some time (deflation). One reason is lack of wage growth in developed Nations as corporations replace workers making a living wage (once known as consumers) with essentially slave labor in “developing” Nations. The other is those corporations accepting the increased productive capacity while keeping labor costs below what is required to consume that production (contrary to Henry Ford’s game plan). The World is awash is cheaply made goods and the money required to purchase those goods (much of which has been recently printed) is in the hands of those on top of the pile. It’s not so much trickle down as it is gushing upwards. China will be bitten in the butt big time when they have to lay off 100 million people because they've run out of space to store everything they can't sell.

Eagle495 June 29, 2016

Mike, May I add that the Crash of 1929 came about because of highly unregulated trading in which the powers that be on Wall Street were so manipulating the stock market, that eventually, the small investors basally stopped trading the market and walked away, leaving the markets with no "suckers" er buyers and it all collapsed.... Incidentally, basically the same thing happened in November 2007 when, just before that Crash, it was noted that individual investors were quitting the markets in droves... Same behavior, same results.... It should be noted that November 2007 was forecast by many of the "old timers" when, in 1999, the Republican Majority Congress passed legislation to remove the Glass-Steagall Act from law....... Glass-Steagall was made law after the Pecora hearings of 1932 made clear the causes of the Crash of 1929.... It worked for over 60 years at keeping the markets clean and functioning honestly....

Bob B June 29, 2016

Larry; I have been a follower of your recommendations,for a few years,and have trust in your findings,and will continue to act on your thoughts. I somehow missed your call on Anhui- Conch, As in today's flash you still are confident in China's growth, can I assume it is wise to hold my Anhui-Conch?

James June 29, 2016

Larrys articles are always really interesting and informative. I enjoy reading them.

Rosemarie June 29, 2016

I subscribe to a few of your products . Will you be giving us gold miners to buy as per your recent advertisement and we will see them in our usual subscriptions. Do we have to buy another one to get this info. Thank you.

dave June 29, 2016

Larry, you are calling for a doubling of the DOW over the next three years and yes you've said it will reach 31,000 for some time now BUT you said that it would first have a massive decline of 50% or more going down to possibly test the last low in 2008, What happened to that call????

Geo June 30, 2016

What are you talking about? He's calling for Dow 13,900 not 6,500.

Paul June 29, 2016

Are you kidding?..China is one of the most corrupt nations on earth....Their accounting principles are laughable and it doesn't make any difference anyway, because their numbers are strictly imaginary...China is completely a sucker's bet, only good for very short term trading by the nimble and the talented. And one thing everyone needs to remember, it's a DICTATORSHIP run by the Communist party...Anytime capitalism gets in the way of government, capitalism will lose...you can depend on it.

Birddog June 29, 2016

The Wall by Pink Floyd redone by Donald Trump

Jeff Herman June 30, 2016

REASONS TO WORRY! While looking for investments in late 1999, it became apparent that EVERY asset class was over valued, led by technology......, the DOW subsequently dropped by 40%! While looking for investments in late 2007, it became apparent that EVERY asset class was over valued, led by housing......, the DOW subsequently dropped by 55%! While looking for investment in mid 2016, it appears that EVERY asset class is over valued or already in depression, led by central banks! * The stock market is hitting historic highs * The housing market is hitting historic highs * The commercial real estate market is hitting historic highs * The bond market is at extreme levels * The gold market is in correction * Commodities are in a depression REASONS TO WORRY! * This expansion is one of the longest since WWII * The velocity of money is at a 70 year low * Bond rates are at a 500 year low * The labor participation rate is at a 38 year low * Home ownership is at a 51 year low * Small business formation is at a 22 year low * Stock market margin is at all time highs * DOW PE ratios are in the 2000 and 2008 range * DOW Purchase volumes have been in decline since 2010 * Corporate profits are in a recession * Commodities are in a depression * Aging populations in developing countries equals less spending * Student loan defaults are growing * Auto loans defaults are growing * Housing prices are reaching highs on low sales * Consumer debt is back to where it was in 2007 * More people are on food stamps than ever before * 12 trillion in government debt is under negative rates * China has 250% debt to GDP and growing * Japan has 250% debt to GDP and growing * The Euro zone is in disfunction and recession * England has voted to leave the EU I'm sure others can add to my list, but can someone, ANYONE give me a reason for this expansion to continue?

Nitlyn June 30, 2016

Ahhh, Jeff, you are so right. Only the government and the media would like everyone to believe otherwise.

Russ June 30, 2016

We have Michael Belkin and Albert Edwards who continue Predicting a big Correction of 50 to 70 Percent.

Tony July 1, 2016

Larry: I am a big believer in processed lunchmeats, particularly those that come from the Bologna region of Italy. I think that as the rest of the world prospers and moves their dietary staples up from grains to meats, that this great migration of the world's population eating grains moving now to animal proteins - I think that this will cause makers of processed meats to prosper. Are their any ways to make a direct investment play on this trend? Are their any publiclly traded companies that deal specifically in mortadella? Can you provide any names or ticker symbols? I know that personally, I prefer the mortadella that has pistachios in it as well. Any input would be appreciated.

Mike July 1, 2016

Yes, invest in pharmaceuticals and health care stocks. The increased consumption of processed meats should insure their profitability for years.

gwynne July 1, 2016

First majestic silver just hit 14$ today from a low of 2.64 $ 4 months ago, are you sure we're not in a bull market , that is about a 600% gain.

Mike July 1, 2016

Yeah I wasn't on the train for that gain in first Majestic silver I'm still waiting on the sidelines Per Larry's guidance.

Vern July 2, 2016

"I travel to China frequently, and what I see on the ground doesn’t square with what you’re hearing from Wall Street analysts who have probably never ventured to the country." I would trust Larry's "been there and done that" much more than the analysts and government officials that are saying what they hope for and not reality. What do we want the numbers to show? not what do the numbers really show. Any economy isn't any good if consumers don't have money to spend. It sounds like Chinese consumers are improving in their incomes and have money to spend. It will be a long time before the USA gets the lost jobs back from China so their economy is not going to go down because of that. There are many other countries that are and will continue to buy from China.

Peter July 2, 2016

China is the biggest threat to the world.they are controlling the Asian ocean.they are in Africa,south America and the middle East.just remember what they did to America.the USA help china during the Japanese occupation fight against the Japanese with weapons and food and military personal.in 1940 and during world war two.but during the Corean war they attack the Americans and fought against them that was six years later 1951 they cannot be trusted.they are going to tried to take over the World in the future.thats the bottom line.

James July 4, 2016

Maybe this c sharp correction in gold and mining stocks will happen. But from what level? Mining stocks could now correct by nearly half and still be far above where we could have bought 3 months ago. A correction is meaningless if it is happening hundreds of percentage above where I felt I should have bought.

sqkc July 4, 2016

The precious bull market is confirmed, waiting is a loser's game. Everyone in the sideline will miss the train..

Panagiotis July 5, 2016

Marty (Armstrong) still sees gold going below $1000. LOL :):)

JM July 6, 2016

Fortunately I did not wait. Started buying minors in late December. Unfortunately did follow advice from June 1: "You can exit your positions on a bounce … and get back in when the metals and miners bottom in the latter part of June." Sold about half of position with large profit. The half remaining is up 50-200%. Larry is often right about getting out but have been waiting for years to be right about when to buy.