"It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that. So we can't lose," he said.Our collective brain just short-circuited upon reading this and reflecting on the fact he's in charge of $300 billion of Chinese sovereign investments. Investment bankers and fund raisers everywhere must be salivating upon the first whiff of dumb-money blood in the water.
CIC was set up in September 2007 with $200 billion of foreign currency reserves transferred from the central bank, which manages its own stockpile of $2.13 trillion.
"If our returns are not bad and the state's FX reserves are still rising, we may go and ask for more," Lou said.
He said the risk of a decline in the dollar risks was more of a national issue for China than for CIC because its capital is in dollars.
Asked whether CIC would be a keen buyer in the United States, Lou said CIC can buy anywhere in the world, but it cannot avoid buying U.S. assets because the American economy and capital markets are so large.
Lou said CIC was building a broad investment portfolio that includes products designed to generate both alpha and beta; to hedge against both inflation and deflation; and to provide guaranteed returns in the event of a new crisis.
"We have to be in everything because you never know what's going to happen in this world," he said.
Monday, August 31, 2009
Head Of Chinese Sovereign Wealth Fund (CIC) Says The U.S. And China Are Creating New Bubbles That Make Investing Riskless
This is just phenomenal. We go away on vacation for a few days and come back to a series of quotes from the head of the CIC, China's $300 billion sovereign wealth fund in this Reuters article. Some of these are just remarkable [emphasis added]: