Microsoft has recently launched an anti-piracy program that specifically targets Chinese computer users, and Chinese users are furious.

The “Windows Genuine Advantage” program turns the user’s screen black if the installed software fails a validation test. This could mean serious trouble for China’s 200 million computer users since the vast majority are believed to be using counterfeit software, whether they know it or not.

Dong Zhengwei, 35, a Beijing lawyer, described Microsoft as the “biggest hacker in China with its intrusion into users’ computer systems without their agreement or any judicial authority,”

“Microsoft’s measure will cause serious functional damage to users’ computers and, according to China’s criminal law, the company can stand accused of breaching and hacking into computer systems,” he was quoted as saying. “I respect the right of Microsoft to protect its intellectual property, but it is taking on the wrong target with wrong measures. They should target producers and sellers of fake software, not users.”

Microsoft defended it’s program: “The purpose … is to help our customers to determine (if) genuine software is installed on their computers,”

This could cause a huge backlash against Microsoft in the one market it should be trying to cultivate. Microsoft’s strong-arm tactics may work in the United States, where it has huge political influence via it’s army of lobbysts, but the Chinese government works a little differently. I think Microsoft is in for a rude awakening when the Chinese people move toward an open source operating system en masse, and Microsoft realizes it has no political recourse. It’s the wild west out there… or is it the “wild east”.

The Financial Times interviewed Jim Rogers in late 2007. They were trying to get an idea of where he thought the US economy was headed in 2008 and beyond. He makes some very insightful comments about Ben Bernanke, the FED, and the recession on the horizon.

We have a complete transcription of the interview after the jump, enjoy:

FT: You said you’re selling US assets. So what makes you so bearish on the dollar?

Jim Rogers: Well the US dollar is a terribly flawed currency. As recently as 1987 the United States was a creditor nation. We’re now the largest debtor nation the world has ever seen in only twenty years. We owe the rest of the world over thirteen trillion with a “T” US dollars. That’s a bad number, but what’s worse is our foreign debts are increasing at a rate of one trillion dollars every 15 months. It’s simple arithmetic at how fast it’s going to go up, but its pretty terrifying arithmetic. I don’t want to own a currency which is being debased that way. The central bank in America has said that they’re going to print as many dollars has they have to drive down the value of the currency. The secretary of the treasury is trying to drive down the value of the currency. I mean it doesn’t take a genius to figure out that it’s a currency that’s going to be going down for some time to come. They want to debase the currency. The head of the central bank has been printing money since he got there for two years. He’s printing money very rapidly now, especially since this summer. This is a man who his whole intellectual career has been spent studying the printing of money. Now America is giving the printing presses. I don’t want to be in a currency like that.

FT: So what’s your assessment of Bernanke’s performance so far?

Jim Rogers: Well it’s been a disaster.

Did I make myself clear? He’s been a disaster. I mean he’s been printing much too much money, since the beginning. Last summer he bailed out his friends on Wall Street, said there was some kind of problem. I mean the stock market was down 6%. If a 6% decline in the stock market causes the man to go and cut interest rates by a half a percent, when inflation is running rampant, when the dollar is under pressure anyway, what’s he going to do when the market is down 36%? What’s he going to do when they have a real crisis? I mean he’s going to print money until we run out of trees! I don’t want to own US dollars in an environment like that. I don’t know why you would. I don’t know why anybody would.

FT: So is the US already in a recession?

Jim Rogers: In my view yes. We know that housing is in worse than recession. We know that automobiles are in worse than recession. We know that many parts of the financial community are in worse than recession. We know that machinery — Caterpillar Tractor, one of the largest machinery companies in the world, has said it’s the worse they’ve seen in 50 years. There are a lot of sectors of the American economy that are in serious trouble, shall we say. The government says it’s not a recession. I’d like to know from them, what’s keeping it up, that if all these other sectors — and you know housing and automobiles are two of the very largest sectors — what is not in recession? Retail sales are down; I could go on and on.

FT: So what’s next? What do you think is coming?

Jim Rogers: Well for the dollar? Well probably the dollar is going to have a big rally about now, because everybody in the world is short the dollar. In my experience in the investment markets, when everyone is on one side of the boat, you’d better think about going to the other side of the boat for a while. I suspect there’ll be a rally; I have no idea what will cause it. And if there’s a rally, for a few weeks, a few months, I would urge you to sell that rally — that’s my plan — to get the rest of my money out of US dollars.

FT: You’ve actually been bearish on the dollar for more than a decade. So why are getting headlines now? Is it to do with promoting your new book?

Jim Rogers: I didn’t know I wasn’t getting headlines, you called me, I didn’t call you. The dollar has been steadily going down, as you know, for several years. It’s not been a wonderful place to be. I have no idea. Maybe it’s because now the dollar’s starting to crescendo a little bit more. And actually now that I think about — I don’t think it has anything to do with me — as you probably know, the dollar has never gone below 80 as an index, which is a federal government report; it’s never gone below 80 in the history of the world. Until the last two or three months, when Bernanke started printing all this money and cutting interest rates; in a terribly inflationary environment he was cutting interest rates. It’s broken below that level, so it’s now going to the lowest level in history. So maybe that’s why more and more people are starting to pay attention to the dollar.

FT: You’re known for being apolitical. Are you backing anyone in the next year’s US presidential election?

Jim Rogers: Well, yes. A pox on both of their houses, as far as I’m concerned; the Democrats and the Republicans. I rarely if ever pay much attention — I always vote – but I don’t pay too much attention to them, because I know they’re pretty hopeless. However in this election, if Ron Paul gets anywhere near the nomination, I will certainly support him. I mean he’s the only one I’ve seen in American politics that seems to have a clue about what’s going on in the world.

FT: Will he win?

Jim Rogers: If I’m backing him, there’s no way, no way I assure you. Poor Ron.

If there is anyone who’s even more clear-sighted about finance than Peter Schiff, it’s Jim Rogers. He’s a legendary investor, founder of the Quantum fund, and a highly respected financial commentator, moreso in Europe and Asia than in the US.

This video is an interview with Rogers about the government action and its effects, namely what Rogers calls the inflation holocaust that is to come. Highly recommended for Common Sense Investors.

A famous quote from Jim Rogers:
“If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia.”

Rogers, following his own advice, moved to Singapore in September of 2007.

Jim Rogers is saying what Peter Schiff and what countless other financial experts and economists have been saying as well: “Don’t interfere with the market”. And he’s coming up against the same backlash that they’ve all come up against. Media pundits don’t like to hear about the “hands-off” approach, they’re inherently motivated to do something, even though that’s exactly what causes the problems. Those media pundits have an extreme anti-market bias, which is the natural default way of thinking for most people.

It seems like no matter how bad things get because of government interference and no matter how obvious it becomes, people refuse to accept free market explanations. Michael Shermer wrote about and explained that anti-market bias in his fantastic book The Mind of the Market; which is a topic for another time.

We’re having the web-content equivalent of a “clip-show” today. Here is another article I found really interesting and thought I’d share it with the Common Sense Investor audience. It’s the 10 Countries Least Affected by the US Financial Crisis from BusinessPundit.com. Now, I don’t agree with this article 100%, I’m not so sure about the methodology, but I think it’s mostly right on. I’ll discuss the problems I have with it in more detail tomorrow. As for right now, here is the complete article. If you have any comments or questions, please leave them in the comment section below.

Here are ten countries suffering 80-100% less than the United States:

10. China

9. Brazil

8. Romania

7. Thailand

6. North Korea

5. Iran

4. Malaysia

3. Morocco

2. Armenia

1. The United Arab Emirates

The original article is here

China is still the place to be.
Usually, a stock that’s 77% below it’s 52 week high is very worrisome, but ACH is an extremely well run company, poised to become a major player in the Chinese metal market.

Sure, demand for aluminum has been slowly declining in the US, but as recently as April, forecasters were saying global demand will rise 8.5% in 2008. That’s well above the average 6% growth rate for the previous 10-year period. Global demand is still nothing compared to the 24% rise in China.

Producing aluminum does take massive amounts of energy, that’s part of the reason why ACH stock has been declining. Aluminum costs much more than steel, and yet, aluminum is vastly more plentiful on earth than steel is, it’s actually the most abundant metal. So why does it cost so much more? The refinement method. With iron, you just take the ore out of the ground, smelt it and separate the metal from the junk. Aluminum, on the other hand, is generally found in bauxite, which needs to be processed using huge amounts of electricity to extract the free aluminum.

But with 24% growth coming from the Chinese market, ACH is still in a great spot. They don’t need to ship the metal across the ocean like Vale or Alcoa. They’re already there, smack dab in the middle of the greatest economic boom the world has ever seen.

So they’re a great company, with a very low P/E, earnings of $9.3 per share, and great leadership. Plus crude prices are starting to fall back down, which will impact their high production costs. This looks like the perfect entry point for a nice long term stock.