-->TRADERROG-ROGER WIEGAND- TRADERROG@COMCAST.NET

FIRST AMENDMENT TO THE CONSTITUTION

Congress Shall Make No Law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech,

or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances

Chinese Economic Dragon is a Weak Cowardly Puppy Feigning Power and

Growth While Treating it?s People with Ruthlessness and Stealing Them Blind

?The marvel of history is the patience with which men and women submit

to the burdens unnecessarily laid upon them by their governments.??William H. Borah

Trader Tracks has for months forecast the demise of China?s alleged miracle economy. Their rulers have made

several mistakes in economic policy so far and are about to drive the final nails in China?s investment cycle

coffin. Our web site posted an essay by a highly intelligent and experienced situation analyst describing this

event and its final outcome. While we do not take credit for this analysis, we did write often of China?s problems

and its business economic crack-up forecast for 2008. This date coincides with the essay analysis based upon

our reasoning of business cycles in several markets. The website essay by Mr. Kanan writes of the

fundamental reasons as to why this conclusion is settled on that date. In our opinion when we can get

thoughtful back-up to our Fundotech work with this kind of explanation this leads us to believe we are generally

on the right track with both the timing and the reasons for this conclusion.

Steve Roach, one of Morgan Stanley?s top economists always gets our attention with his eloquent reasoned

ideas on evaluative economic theory. His recent analysis?Global: China Slowdown-Early Not Wrong? provided

a third opinion originating from personal visits and a great deal of work. Steve was recently worried that his

China theories were off the mark and their affected markets were not behaving as he forecast they would. Now

Steve has determined he was correct all along but just early. We totally agree and never lost faith in his ideas

when others did not believe him. Now he has written of China?s planned?and surprising contraction in bank

lending.? Our observations say this is true for two reasons: (1) China is fighting daily; battling massive rioting

from abused farmers and rural workers which has exploded into a reported 76,000 incidents in the past 12

months. This problem must be addressed before all out open civil war erupts. (2) China is broke. The banks

are broke but are still breathing as they have been given transfusions of cash from naive foreign investors

which passed through to the Chinese Communist central planners. Now that western investors, banks and

corporations have been conditioned to believe in this Chinese economic miracle, the Commies are going to

reel in the suckers to invest in China Treasury Bonds and corporations. The cash is being funneled right now

from the west to the companies and straight into the Communist leader?s pockets.

Publicly, Chinese leaders are saying now? We will be immediately implementing reforms.? Those reforms are

involving business movement away from overburdened cities into the country side to sooth the rabble and

prevent riots. By removing government stock ownership from various provincial municipal entities, the Chinese

off load the debt, scoop up the cash and make the world at large believe they are engaging in free enterprise.

The stolen cash goes into offshore quality assets and the western investors are stuck with failing and

destroyed corporations, new unsound Chinese Treasury Bonds, and a highly corrupt system designed to

extract more money from western fools who think they have found economic nirvana.

December 16, 2005

er Wiegand E-mail traderrog@comcast.net Volume 2, Number 50

Steve Roach?s assessment says the Chinese economic miracle becomes a visible failure in 2006 as their

reforms are implemented and GDP shrinks from 9% to roughly 7% or less. To save face (and believe me they

are big on saving face) the game must be glued together until the Chinese 2008 Olympics are over. This date

coincides with the USA presidential election and in our opinion a potential Dow-Nasdaq-S&P pre-crash top.

And of course, this just happens to hit the cycle clock on Act One of the world?s K-winter. The years of 2006

through 2008 will be economic declining years for China as they will be importing less raw material and

commodities for skidding corporations. Notice we just heard yesterday that a top French auto manufacturer

has decided against a new investment in China. They chose to a take a pass after having taken a close look at

China problems and lack of opportunity.

China is not making money on business enterprise and operations. Many of the construction loans have

defaulted as intended building uses have not come to fruition. China manufacturing is riddled with losses and

inefficiencies. Simon Hunt Strategic Services said,? the National Bureau of Statistics survey of 200,000

companies in the Chinese manufacturing sector showed a combined loss of US$15.1 Billion in the first seven

months of 2005 a 55% increase over 2004.?

Observers wonder how is it possible for this mess to build in such a manner? It?s really quite simple as the Red

Chinese Government is in charge and is making all the decisions and spending the money. Their rulers and all

their kids and relatives have been on a spending binge gravy train doing anything they please without any of

the normal system checks and balances western societies utilize and are familiar with. Trader Tracks had the

recent good fortune to receive a huge pile of recent and original China stuff from a favorite reader. This

bonanza will become big news in further Trader Tracks Letters and writings. Thank you for that Laura. It is very

much appreciated and will be put to excellent use. The real China story is blockbuster news and must be told.

What Does All This Mean for our Readers and Investors?

The grand Chinese economic experiment is crashing and dying. It had no firm footing or foundation in western

rule of law. The concepts of private property, controlled banking and investing and sound business decisions

are not in the Chinese mind or vocabulary. Dictatorships cannot permit these things as they are at odds with

power and iron fisted control of the people. Sadly for the innocent and hard working Chinese non-governmental

citizens, they must bear the brunt and burden of civil unrest and degeneration into feudal tribal civil war

resembling Chinese history hundreds of years ago. The following list shows the Trader Tracks forecast

outcome for China policies and western investors:

1. China will import raw materials on a dramatically declining scale in the next three years.

2. Western investors with plant, people and equipment will pull out with heavy losses and stolen

(appropriated) physical and intellectual property.

3. The Chinese stock market will crash after sucking in all the foreign investors? money.

4. Chinese military aggression will escalate against Taiwan, Japan and the western countries.

5. China will blame all of its problems on outsiders like the USA and other free world countries who have

invested in their nation.

6. China will step up theft of domestic and foreign property they own a portion of or none of particularly

energy resources, raw materials, and supplies throughout the world. Notice the jet fuel and copper

trades they are trying to wiggle out of and deny responsibility for. These two trades equal nearly

$1Billion in commodity trading losses that remain to be cleared and settled.

7. China will be in fights over companies, equipment and property they own with partners.

8. After the Olympics are over look for more blatant and open Chinese war mongering and aggression

throughout the world. Japan in particular is girding for battle.

9. When civil unrest grows out of control in China, they will turn inward to fight and deal with internal

problems as their country slides into anarchy.

10. China has raced ahead of other nations in a frantic push to enter the 20th century jumping from a

primarily agrarian society to society hill. The result has been massive bubble blowing across the

economic spectrum which ends in a deflationary collapse as their newly created pile of constructed and

unused stuff sees valuations dive to the cellar. Japan?s 1989 deflationary collapse was tiny compared to

the one China has produced and will soon experience. We can assure you this time it is not different.

Economic rules are the same today as they were 100 years ago. The Chinese bubble is the Florida

land boom, the South Sea bubble, Enron and 1929 rolled into one big disaster.

11. American taxpayers will end-up footing the bill for misguided China investments by American banks

and corporations. This one will be the mother of all write-offs.

Western Investors Take Heed

Trader Tracks offers the following advice on China:

1. Do not buy any Chinese stocks or invest in any of their businesses in or outside of China.

2. When you invest in any stock read about the company and clearly understand where they have

business investments and operations. Know who they have partnerships with and where they are

located.

3. Chinese have major investments in Long Beach California, Vancouver, Canada, South America and

are moving into the Middle East for energy resources. You would very surprised what the Red Chinese

own today and are attempting to buy for the future. They control the Panama Canal courtesy of Jimmy

Carter.

4. Do not trade or traffic in Chinese currencies or any formerly strong Chinese businesses in Hong Kong

or Shanghai.

5. Of any current relationships and involvement China might have in Singapore, we have zero knowledge.

6. If an investment looks attractive and you cannot obtain proper information, take a pass.

Most of the time when investors get stuck in one of these turkeys the situation deteriorates very slowly.

When we see a stock or good market trade and recommend an entry either it starts moving to our advantage

right away or we are out. Day traders are so fast at this they are sometimes in a trade less than one minute.

They want immediate confirmation of something good or they are gone in a flash. The best stock trader I know

of made $44,000,000 in less than 10 years starting with under $50,000. He used technical chart patterns,

worked only the biggest companies in the fastest moving sectors (today they are gold and energy). He was a

swing trader staying in positions usually 1-3 months. Sometimes he was in and out in two weeks. None of his

work was much longer than 90-120 days. He also bought stocks on 50% margin which we do not recommend

for most investors. When things really got moving he had three or four open positions at once with 100,000

shares on each position. You must have big volume and large fast moving stocks to do this.

Trader Tracks prefers a positive entry with some reasonable move toward our goals followed by a selling stop

behind a rising stock eliminating loss. The faster this happens the better. We often see fund managers on

CNBC suggest stops 10-20% behind a buy entry. If you bought a stock and invested $10,000 or $100,000 why

would you sit and let it go negative for several thousand before an exit? Never fall in love with a stock or marry

it. Just use it while it makes money and then get out for the next opportunity. The only kind of buy and hold

stocks we like are senior precious metals and energy stocks. Even these seniors need to be traded once or

twice a year for one-half the invested amount.

In futures and commodities the market action is usually much faster with higher leverage. We recommended a

natural gas trade last week and it lasted less than 24 hours. I could see gas moving up into the third leg of five

waves on a C wave hourly chart and felt its natural top was at 15.000 about one point away. I found a spot to

buy and sell on the same entry which does two things: (1) it protects capital by limiting a big loss and; (2) takes

out the trade with a pre-posted exit avoiding the investor becoming too greedy and blowing the trade earnings.

In that example, gas rallied so fast, we were in, rallied and exited in one trading day. These are good trades.

They get the job done quickly, cleanly and with little exposure to risk. It takes lots of work to find the right spots.