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    A Perspective On China's Impact On The World Stage: Baby Dobbins Has Arrived!

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    This document provides a summary of China's economic growth and impact on global markets over the past few decades, as well as some risks and challenges. It discusses how China has managed rapid economic growth but also faces issues like inflation, inequality, and large foreign exchange reserves. The summary concludes by noting that China's future success or failure will significantly impact global financial markets and commodity prices.

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    A Perspective On China's Impact On The World Stage: Baby Dobbins Has Arrived!

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    This document provides a summary of China's economic growth and impact on global markets over the past few decades, as well as some risks and challenges. It discusses how China has managed rapid economic growth but also faces issues like inflation, inequality, and large foreign exchange reserves. The summary concludes by noting that China's future success or failure will significantly impact global financial markets and commodity prices.

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    Click here to see our quarterly newsletter, "From Maine to Mexico."

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    Fall 2011 Newsletter

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    This document provides a summary of China's economic growth and impact on global markets over the past few decades, as well as some risks and challenges. It discusses how China has managed rapid economic growth but also faces issues like inflation, inequality, and large foreign exchange reserves. The summary concludes by noting that China's future success or failure will significantly impact global financial markets and commodity prices.

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    A Perspective On China's Impact On The World Stage: Baby Dobbins Has Arrived!

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    monarchadvisorygroup
    This document provides a summary of China's economic growth and impact on global markets over the past few decades, as well as some risks and challenges. It discusses how China has managed rapid economic growth but also faces issues like inflation, inequality, and large foreign exchange reserves. The summary concludes by noting that China's future success or failure will significantly impact global financial markets and commodity prices.

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    FALL 2011

    A Perspective on Chinas Impact on the World Stage


    Before China, there was Japan. From the 1960s to the 1980s, Japan was on a roll. They had one of the highest economic growth rates in the world, according to PBS. Their manufacturing prowess grew to be the envy of the world. Their stock market soared 373 percent between 1980 and its peak in 1989, according to Knowledge@Emory.edu. And, like China today, there were predictions that Japan would overtake the United States as the largest economy in the world. Oh, but times change. Japans economic miracle came crashing down in the 1990s along with its stock market. By the end of 2010, the Japanese stock market, as measured by the Nikkei 225 index, was down an astounding 73 percent from its 21-year old 1989 high, according to data from Yahoo! Finance. As happened in Japan, extrapolating past performance could be hazardous to your wealth. Will China suffer a similar fate? If it does, what will that do to the financial markets? MANAGING THE ECONOMY China has deftly managed its economy over the past three decades to produce spectacular growth and improved living standards for its people. In fact, economic growth has contributed to more than 500 million Chinese people rising out of poverty since 1981, according to The World Bank. But, growth has its price. Strong economic growth can lead to problems such as inflation, social and economic inequality, and a growing pile of foreign exchange reserves. INflATION Inflation is a major threat to Chinas future success because if it gets out of control, the population may revolt. In August 2011, inflation rose by 6.2 percent from a year earlier well above the governments 4.0 percent target. Worse yet, food prices rose 13.4 percent from a year earlier and, for a country that needs to feed 1.3 billion people, thats a problem. Rising food prices is particularly difficult for China to stomach because the average Chinese household spends about a third of its disposable income on basic food, according to the Financial Times. If you want to know why inflation is a threat to national stability, go back to 1989. The Financial Times said, Inflation of nearly 20 percent is considered a key contributing factor to the 1989 student protests that culminated in the bloody military crackdown in and around Beijings Tiananmen Square.
    Continued inside...

    Important Dates
    November 6 Daylight Saving Time Ends (set your clocks back 1 hour)Its a good time to change the batteries in your smoke detectors! November 11 Veterans Day office closed November 24 Thanksgiving office closed December 8 Holiday Open House December 25 Christmas (office closed Monday, December 26) January 1 New Years Day (office closed Monday, January 2)

    ...continued from front page.

    SOCIAl ANd ECONOMIC INEquAlITY While Chinas economy has grown more than 90-fold in the past 30 years, the gains have left a widening gap between the Haves and HaveNots. Chinese Premier Wen Jiabao said back in February 2011 that rising inequality is threatening social stability, according to a Bloomberg article. Can you imagine what would happen if even a small percentage of Chinas 1.3 billion people turned against the government? Unrest has been on the rise in recent years. As Bloomberg reported in citing data from Sun Liping, a professor of sociology at Beijings Tsinghua University, Mass incidents, everything from strikes to riots and demonstrations, doubled from 2006, rising to at least 180,000 cases in 2010. So, how do you keep 1.3 billion people in check? According to Nicholas Bequelin, a China researcher for Human Rights Watch in Hong Kong, Chinas been doing it through a combination of economic growth, social reforms, and political repression. Time will tell how long that lasts.

    fOrEIGN ExCHANGE rESErvES At $3.2 trillion, China has by far the largest foreign exchange reserves in the world, according to The Wall Street Journal. These trillions were built over the years through Chinas trade surplus, foreign direct investment, and capital inflows betting on yuan appreciation (the yuan is Chinas currency). On the surface, large foreign exchange reserves sound like a good thing, and, in some ways, it is. The downside is that it exacerbates inflationary pressure, according to Bloomberg. In an ironic twist, the U.S. has been a beneficiary of this massive reserves buildup. China had to park their cash somewhere so where did they turn? To the U.S. treasury market! At the end of June 2011, China was the largest foreign holder of U.S. Treasuries with more than $1.1 trillion filling their balance sheet, according to the Treasury Department. CONCluSION China is so large and growing so fast, that it will impact the world in major ways for the foreseeable future. Its success or failure, its twists and turns, will reverberate throughout the financial markets and affect everything from the level of interest rates to the price of soybeans to the volatility of the S&P 500 index. Will China stumble at some point? Probably. The big question is how will their potential tumble cascade throughout the world? Yet, no matter what happens, we will continue doing our research. We will continue monitoring your investments. We will continue doing what is in your best interests. We truly live in a globally interconnected world that is getting smaller and smaller by the day. One thing that does not get smaller is our commitment to you.
    The above material was prepared by Peak Advisor Alliance.
    Sources: http://www.pbs.org/wgbh/pages/frontline/shows/dotcon/historical/bubbles.html http://knowledge. emory.edu/article.cfm?articleid=646 http://finance.yahoo.com/q/hp?s=%5EN225+Historical+Prices http://www.worldbank.org/en/news/2009/04/08/world-bank-report-urges-broadening-chinaspoverty-reduction-agenda http://www.cnbc.com/id/44445795/ http://www.cnbc.com/id/44481410 http://www.ft.com/intl/cms/s/0/a2170530-66b4-11e0-8d88-00144feab49a. html#axzz1Sx0sRUGx http://www.bloomberg.com/news/2011-02-27/china-police-blanket-planned-jasmine-protestsites-in-beijing-shanghai.html http://online.wsj.com/article/SB10001424053111903554904576457284041435522.html http://www.bloomberg.com/news/2011-04-18/china-must-cut-foreign-exchange-reserves-pbocs-zhou-says-1-.html http://www.bloomberg.com/news/2011-07-20/china-says-record-foreign-currency-reservesunaffected-by-dollar-decline.html http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt http://www.nytimes.com/2011/07/19/business/china-largest-holder-of-us-debt-remains-tied-totreasuries.html?pagewanted=1&_r=2&hp

    Join LinkedIn

    s we turn to the Internet more each day as a source of information, it is important to make sure that information is coming from a reliable source. To that end, I invite you to join my network on LinkedIn. You will find the Monarch Report posted there each Monday. In addition, look for additional economic updates each Wednesday and Friday. This is quickly becoming an easy, and effective way for us to communicate up-to-date information. Dont miss it! Join today.

    Potential Changes To Your Investment Statements


    the IRS over a three year period beginning January 1, 2011. As a result of these new regulations, you may notice the addition of a new column labeled Covered next to the individual positions on your statements and on Account View. This column is simply used to reflect which securities held in your portfolio are covered by the new regulations and which securities are not. However, as a courtesy, LPL Financial has provided cost basis information on your statements and through Account View and will continue to do so for all covered and uncovered securities. If you have any questions about these changes, please feel free to contact our office.

    he Emergency Economic Stabilization Act of 2008 mandated that, beginning in the 2011 tax year, broker/dealers such as LPL Financial must report the adjusted cost basis of securities to clients and to the Internal Revenue Service(IRS) on Form 1099-B.

    Cost basis is the original purchase price you paid for an investment, plus any commissions, fees and other expenses, and is used to determine capital gains and capital losses for tax purposes. Adjusted cost basis is the original cost basis and any adjustments due to items such as wash sales, amortization and accretion. Thats all old news, but new regulations are changing the way cost basis may be reflected on your statement. These new regulations will apply to all investments but will be phased in by

    We are pleased to welcome Tennessees first School of Rock location, opened by Kelly and Angie McCreight, members of the Monarch Advisory Group family for 6 years. For more than a decade, School of Rock has inspired kids around the country to rock on stage and in life. Students develop confidence, talent and skills through music programs designed for beginner, intermediate and advanced aspiring musicians. They offer lessons in guitar, bass, vocals and drums in an authentic, performancebased environment that kids love. If your child is interested in not only learning to play music, but also perform, then this is the school for them, says Angie. To celebrate, School of Rock will host a Grand Opening celebration featuring live music from Zasz, Two Bit Charlie and Striking Matches, as well as food, fun and a guitar smashing commemoration ceremony. They will be offering school tours, mini lessons, a free recording booth and paparazzi snapping pics of future rock stars on the red carpet. Dress your kids up in their best rock n roll costumes and head out to School of Rock on: Saturday, October 29th 2-5pm 616 Bradley Court, Franklin, TN 37067

    Comes To Franklin!

    903 B Murfreesboro Rd. Franklin, TN 37064 (615) 614.0070 (615) 614.0082 f MonarchAdvisoryGroup.com Securities Offered Through LPL Financial Member FINRA/SIPC

    Whats Inside
    A Perspective on Chinas Impact on the World Stage Join LinkedIn Potential Changes To Your Investment Statements School of Rock Comes to Franklin! Baby Dobbins Has Arrived!

    Baby Dobbins Has Arrived!


    The event we have long been waiting for has finally arrived. Tiffany gave birth to Ryan James Dobbins on August 27, 2011, at 1:44 am. Ryan weighed in at a healthy 10 pounds, 1 ounce and was 21 1/2 inches long. Tiffany and Jimmy are settling in to their new role as parents and are enjoying every minute of it. Baby Ryan is doing great!

    We wish Tiffany well in this new chapter of her life.

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