Responding to China bears Hugh Hendry of Eclectica and SocGen’s Albert Edwards, both of whom consider China not to be that relevant to the global economy.
Concerning Edwards, he has been predicting a hard economic landing for China for the last three years, while Hendry refuses to believe China will be the main driver of the global economy.
Rogers pointed out in an interview with Investment Week that all that's happening in China concerning the economic slowdown is proof the very public announcements by China over the last couple of years, that it is going to work on slowing down its too-hot economy ... is working.
In that regard Rogers is correct, as China leaders have indeed asserted for some time that they're going to slow down economic growth.
He said, “For three years China has announced publicly, loudly and clearly it is trying to slow its economy down. They wanted to pop their real estate bubble and do something about inflation so they have slowed things down. What is the surprise here? What is the news?”
Rogers said this about Hendry and his take on China: “Hugh has been dead wrong about China for three years now and China has not collapsed as he predicted, loudly, verbally and widely.”
As for Edwards, Rogers said that “Albert has been bearish on everything for a long time. So if you are telling me he is bearish on China and bullish on everything else that would be different. But no, he is bearish on everything, including you, me and Mother Teresa.”
Rogers looks at the drop in Chinese shares as an opportunity to get back in the market.
Last week the Shanghai Composite index closed at 2,147, the lowest level it has been at since March of 2009.
For the next couple of years Rogers sees global economic challenges and turmoil, but believes China is positioned strongly for that because of its significant amount of foreign exchange reserves.
Showing posts with label China Bubble. Show all posts
Showing posts with label China Bubble. Show all posts
Tuesday, July 24, 2012
Monday, August 23, 2010
JPMorgan (NYSE:JPM) Cuts China GDP Growth Estimates
JPMorgan Chase & Co. (NYSE:JPM) said in a note to clients Friday that they see China's GDP growth falling on the near-term “loss of momentum." That includes globally and in the U.S.
The banker sees this being the case through the rest of 2010 and until at least the end of 2011.
Their previous estimate of 10 percent has been downwardly revised to 9.8 percent for 2010, and as low as 8.6 percent, down from 8.8 percent, for 2011.
Much of this is in relationship to their battling the urban property markets which are in danger of becoming a bubble.
Companies providing materials in those areas could have their numbers impacted over the next year-and-a-half if these estimates hold up, or become even worst than expected.
The banker sees this being the case through the rest of 2010 and until at least the end of 2011.
Their previous estimate of 10 percent has been downwardly revised to 9.8 percent for 2010, and as low as 8.6 percent, down from 8.8 percent, for 2011.
Much of this is in relationship to their battling the urban property markets which are in danger of becoming a bubble.
Companies providing materials in those areas could have their numbers impacted over the next year-and-a-half if these estimates hold up, or become even worst than expected.
Friday, May 7, 2010
Freeport McMoRan (NYSE:FCX), Southern Copper (NYSE:SCCO) Down on China Concerns
Metal stocks like Freeport McMoRan (NYSE:FCX) and Southern Copper (NYSE:SCCO) have been hit hard on concerns over the possibility of a slowdown in China, which has cuased the companies to fall by over eight and nine percent respectively in the last few days.
China is battling its own potential housing bubble problems, and have been raising interest rates and cutting back on allowing third homes for borrowers.
That has investors fearing the measures could cut back on the need of raw materials, which of course would hammer the metals companies which are so reliant on China.
Even it this doesn't result in a bubble, companies and investors will have to take into consideration the levels of demand for commodities won't continue on at this pace, even in China.
China is battling its own potential housing bubble problems, and have been raising interest rates and cutting back on allowing third homes for borrowers.
That has investors fearing the measures could cut back on the need of raw materials, which of course would hammer the metals companies which are so reliant on China.
Even it this doesn't result in a bubble, companies and investors will have to take into consideration the levels of demand for commodities won't continue on at this pace, even in China.
Tuesday, May 4, 2010
BHP Billiton (ASX:BHP), Rio Tinto (LON:RIO) Fall on China Fears, Sovereign Debt Concerns
In a very short time, resource companies like BHP Billiton (ASX:BHP) and Rio Tinto (LON:RIO) have fallen on not only the obvious concerns of the sovereign debt crisis in Europe, but possibly even more important, the apparent cutback by China in their housing market could result in demand for commodities to fall.
Suddenly everyone that has been citing China as the reason for confidence in growth going forward has to reevaluate their businesses and possibly readjust their estimates for revenue and earnings.
Oh yeah, then there's the misguided 40 percent levy by the Rudd government which has disrupted the markets for mining companies with a large presence there, and could end up being a disaster.
So overall, in just a couple of weeks or less, optimism on earnings and revenue have plummeted to companies again taking a more defensive posture in a quickly changing economic environment.
Suddenly everyone that has been citing China as the reason for confidence in growth going forward has to reevaluate their businesses and possibly readjust their estimates for revenue and earnings.
Oh yeah, then there's the misguided 40 percent levy by the Rudd government which has disrupted the markets for mining companies with a large presence there, and could end up being a disaster.
So overall, in just a couple of weeks or less, optimism on earnings and revenue have plummeted to companies again taking a more defensive posture in a quickly changing economic environment.
Monday, May 3, 2010
Marc Faber: China May Collapse within the Year
Marc Faber says he sees signs China's economy may be poised for a collapse and it could possibly happen within nine months to a year.
In a television interview with Bloomberg, Faber said this:
“The market is telling you that something is not quite right. The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”
When the credit crisis exploded and American consumers stopped spending, China did the usual thing governments and central banks do, they attempted to stimulate their economy by spending billions on domestic property development and construction projects, which may account for about 60 percent of the Chinese domestic product at this time.
In the interview Faber also said the mining companies in Australia, which supply a large portion of raw materials to China, are acting "heavy," meaning they may be feeling exterior pressures of slowing demand.
It also looks like China has no intention of changing their policies either, as Finance Minister Xie Xuren said China will continue their expansion until the recovery takes hold.
One step the Chinese government has taken is to forbid taking out a mortgage on a third home while also raising interest rates on mortgages and increasing the requirements on down payments.
Estimates are that could cause the value of properties to fall by up to 20 percent in the second half of 2010 in hopes of cutting down are investing in risky real estate deals.
Faber says these measures could push investors toward the Chinese stock market, but since that's fully valued at this time, they could choose gold as their investment of choice, and who knows where that would bring the price gold to in light of the European sovereign debt crisis, which is only beginning to unfold.
Either way, if Faber is correct at the high end of his projection, the economy of China will slow, and what happens to the prices of commodities at that time when so many companies and countries have been relying upon to bring them out of the recession?
Couple all of this with the EU sovereign debt debacle and it's hard to figure how the financial press can endlessly repeat the mantra that we're in an economic recovery.
In a television interview with Bloomberg, Faber said this:
“The market is telling you that something is not quite right. The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”
When the credit crisis exploded and American consumers stopped spending, China did the usual thing governments and central banks do, they attempted to stimulate their economy by spending billions on domestic property development and construction projects, which may account for about 60 percent of the Chinese domestic product at this time.
In the interview Faber also said the mining companies in Australia, which supply a large portion of raw materials to China, are acting "heavy," meaning they may be feeling exterior pressures of slowing demand.
It also looks like China has no intention of changing their policies either, as Finance Minister Xie Xuren said China will continue their expansion until the recovery takes hold.
One step the Chinese government has taken is to forbid taking out a mortgage on a third home while also raising interest rates on mortgages and increasing the requirements on down payments.
Estimates are that could cause the value of properties to fall by up to 20 percent in the second half of 2010 in hopes of cutting down are investing in risky real estate deals.
Faber says these measures could push investors toward the Chinese stock market, but since that's fully valued at this time, they could choose gold as their investment of choice, and who knows where that would bring the price gold to in light of the European sovereign debt crisis, which is only beginning to unfold.
Either way, if Faber is correct at the high end of his projection, the economy of China will slow, and what happens to the prices of commodities at that time when so many companies and countries have been relying upon to bring them out of the recession?
Couple all of this with the EU sovereign debt debacle and it's hard to figure how the financial press can endlessly repeat the mantra that we're in an economic recovery.
Monday, April 26, 2010
Marc Faber: China and Australia
If the insight of Marc Faber is correct concerning China, and he's not the lone person saying this, Australia, and any country strongly relying on Chinese demand for raw materials, or good and services, will find themselves going up and down with the Chinese economy, moving in unison with it.
Of course this is great as long a China continues to grow, but when it stalls, or if there is a bursting of their real estate market, it'll cause enormous repercussions for any business or country overly dependent on the Chinese, which to a large degree Australia is one of the leading ones.
China has largely been the reason Australia didn't suffer as much as other Western countries, as their focus on shoring up their domestic market has resulted in hundreds of billions being used for infrastructure projects, and some others that are dubious at best.
Some people who claim to have seen it say there are huge numbers of empty buildings sitting around which were built to create temporary jobs and nothing else. What happens when they sit around and generate no income? What happens when the bills come due in those cases?
Even if the Chinese government let's it all go, it was real money used to build, and that money was put into the system and has a significant impact on the economy.
China continues to say it's going to take measures to cool down its economy, but so far that has been only words and not actions. One way or the other China will have to cool off, as no country can continue to grow at that rate without severe consequences, especially since there may be many projects which have no use and no way to pay for themselves.
No matter if someone is an investor, a country or a company, the way of China can't continue to be only upward, and when that stops, there's going to be an awfully big headache to deal with, and quite probably a long one.
China should be a part of everyone's portfolio in some way, but those overly invested like Australia, will go as China goes. For now that's working great, what's going to happen when it no longer is?
Australia and others will discover that while they enjoyed a fairly sound economy during the worst of the great recession, they will probably suffer when other countries and economies are stronger, and China finally comes down to earth. The only question is how hard the economic gravity pulls them down, and if they land with a crash or only a thud. At this time it definitely seems a crash landing is what's ahead for Australia; it's not a matter of if, it's only a matter of when, and that may take some years (or not), but it will definitely come.
Of course this is great as long a China continues to grow, but when it stalls, or if there is a bursting of their real estate market, it'll cause enormous repercussions for any business or country overly dependent on the Chinese, which to a large degree Australia is one of the leading ones.
China has largely been the reason Australia didn't suffer as much as other Western countries, as their focus on shoring up their domestic market has resulted in hundreds of billions being used for infrastructure projects, and some others that are dubious at best.
Some people who claim to have seen it say there are huge numbers of empty buildings sitting around which were built to create temporary jobs and nothing else. What happens when they sit around and generate no income? What happens when the bills come due in those cases?
Even if the Chinese government let's it all go, it was real money used to build, and that money was put into the system and has a significant impact on the economy.
China continues to say it's going to take measures to cool down its economy, but so far that has been only words and not actions. One way or the other China will have to cool off, as no country can continue to grow at that rate without severe consequences, especially since there may be many projects which have no use and no way to pay for themselves.
No matter if someone is an investor, a country or a company, the way of China can't continue to be only upward, and when that stops, there's going to be an awfully big headache to deal with, and quite probably a long one.
China should be a part of everyone's portfolio in some way, but those overly invested like Australia, will go as China goes. For now that's working great, what's going to happen when it no longer is?
Australia and others will discover that while they enjoyed a fairly sound economy during the worst of the great recession, they will probably suffer when other countries and economies are stronger, and China finally comes down to earth. The only question is how hard the economic gravity pulls them down, and if they land with a crash or only a thud. At this time it definitely seems a crash landing is what's ahead for Australia; it's not a matter of if, it's only a matter of when, and that may take some years (or not), but it will definitely come.
Wednesday, March 24, 2010
Citigroup (NYSE:C) Analyst Projects China Bust
China going to bust?
Citigroup (NYSE:C) analyst Willem Buiter has joined a chorus of others who have predicted China is set for a bust, and Buiter claims it could last for a period of three years, and doesn't believe it can be avoided, even if China tightens its monetary policies, which it has said it was going to do, but hasn't yet.
Like others, Buiter largely bases his assertion on the residential and commercial real estate markets in China, which could end up creating a domino effect.
The one problem I have with Buiter is the idea is also based on whether or not the Chinese government is doing anything.
“What is policy in China doing about the threat of overheating in the financial and real economy?” Buiter said. “The short answer is: not much, and not enough to prevent the creation of what could become a major asset boom, bubble and bust.”
Obviously this is a Keynesian thought, and economists like this think the world is falling if the government isn't interfering.
China for its part says they've seen nothing to indicate their economy is in a state of recovery. I think the West could take a lesson from that observation as well. Everywhere you read the mainstream media makes it sound like we're really in a big recovery, when data shows we're far form that being a reality.
Citigroup (NYSE:C) analyst Willem Buiter has joined a chorus of others who have predicted China is set for a bust, and Buiter claims it could last for a period of three years, and doesn't believe it can be avoided, even if China tightens its monetary policies, which it has said it was going to do, but hasn't yet.
Like others, Buiter largely bases his assertion on the residential and commercial real estate markets in China, which could end up creating a domino effect.
The one problem I have with Buiter is the idea is also based on whether or not the Chinese government is doing anything.
“What is policy in China doing about the threat of overheating in the financial and real economy?” Buiter said. “The short answer is: not much, and not enough to prevent the creation of what could become a major asset boom, bubble and bust.”
Obviously this is a Keynesian thought, and economists like this think the world is falling if the government isn't interfering.
China for its part says they've seen nothing to indicate their economy is in a state of recovery. I think the West could take a lesson from that observation as well. Everywhere you read the mainstream media makes it sound like we're really in a big recovery, when data shows we're far form that being a reality.
Tuesday, March 16, 2010
MarK Mobius: China Growth is Sustainable
Mark Mobius on China Growth
Mark Mobius was talking at the Reuters Mining and Steel Summit on the future growth of China and whether he believed it was sustainable or not. The emerging market expert said while China will continue at high growth levels and it will be sustainable, it won't be able to continue at double-digit growth levels, but will probably continue on some time in higher single-digit growth.
This ensures raw material demand will continue to be high based on China alone, according to Mobius, and I would add it shows the long-term demand cycle we're in when taking into account all emerging nations, and to a lesser degree, developing nations as well, who will benefit from selling commodities.
Contrary to the idea China will be tightening up, Mobius looks at them continuing to to pursue raw materials no matter what they do with their currency. Taking into account Chinese concerns over economic conditions in the United States and the rest of the West, and you can see they know exports are going to take a long time to rebound, making their internal needs and domestic projects as important as ever. This doesn't mean there won't be decent exports, just that they'll take time to build up to pre-recession levels.
Some of the larger and safer emerging market investments Mobius mentioned as good plays were Compania de Minas Buenaventura SA (NYSE:BVN), Vale (NYSE:VALE) and PetroChina Company Limited (NYSE:PTR).
Mark Mobius on China Growth
Mark Mobius was talking at the Reuters Mining and Steel Summit on the future growth of China and whether he believed it was sustainable or not. The emerging market expert said while China will continue at high growth levels and it will be sustainable, it won't be able to continue at double-digit growth levels, but will probably continue on some time in higher single-digit growth.
This ensures raw material demand will continue to be high based on China alone, according to Mobius, and I would add it shows the long-term demand cycle we're in when taking into account all emerging nations, and to a lesser degree, developing nations as well, who will benefit from selling commodities.
Contrary to the idea China will be tightening up, Mobius looks at them continuing to to pursue raw materials no matter what they do with their currency. Taking into account Chinese concerns over economic conditions in the United States and the rest of the West, and you can see they know exports are going to take a long time to rebound, making their internal needs and domestic projects as important as ever. This doesn't mean there won't be decent exports, just that they'll take time to build up to pre-recession levels.
Some of the larger and safer emerging market investments Mobius mentioned as good plays were Compania de Minas Buenaventura SA (NYSE:BVN), Vale (NYSE:VALE) and PetroChina Company Limited (NYSE:PTR).
Mark Mobius on China Growth
Friday, March 12, 2010
Teck Resources (NYSE:TCK) Drops on China Inflation
Teck Resources China Inflation
The news that inflation had reached a 16-month high in China February, had a strong effect on the prices of metals, and Teck Resources (NYSE:TCK) partook in the negative response, getting rocked with a 1.4 percent hit to its stock price.
Many metals fell on the China inflation news, primarily on concerns China will tighten its monetary policy to cool of its economy even more, which would imply demand for raw materials could drop from what was expected.
Teck Resources is one of the largest base-metals producers in the world, and could get rocked if China cuts back in a big way, although that's not a certainty, although it would be more costly to do business there.
Teck has somewhat of a cushion though, as only 10 percent of its overall revenue comes from Asia, making them not as vulnerable as some other metals producers could be.
Teck Resources China Inflation
The news that inflation had reached a 16-month high in China February, had a strong effect on the prices of metals, and Teck Resources (NYSE:TCK) partook in the negative response, getting rocked with a 1.4 percent hit to its stock price.
Many metals fell on the China inflation news, primarily on concerns China will tighten its monetary policy to cool of its economy even more, which would imply demand for raw materials could drop from what was expected.
Teck Resources is one of the largest base-metals producers in the world, and could get rocked if China cuts back in a big way, although that's not a certainty, although it would be more costly to do business there.
Teck has somewhat of a cushion though, as only 10 percent of its overall revenue comes from Asia, making them not as vulnerable as some other metals producers could be.
Teck Resources China Inflation
Thursday, February 25, 2010
Marc Faber: Will China Collapse?
Marc Faber on China
We've been talking about a lot of negative factors which could have a dramatic effect on the market and commodities lately, and all of them are important to keep in mind. That's the case with Marc Faber and his input on China.
Faber sees China as being at a tremendous risk of crashing, to the tune of about a 30 percent chance. He adds that whether it crashes or not it will definitely slow down.
With that in mind, it will have a significant impact on certain commodities, as the Chinese government, to a certain degree, is starting to tighten up some on its lending.
I'm not convinced on the motives of the Chinese yet though, as I think some of tightening is a move in relationship to negotiating on some of its commodity imports, specifically iron ore.
Even so, they do want to cool the economy down some, and that is probably a surety going forward.
The problem is where are they going to cut back on? It doesn't seem it will be in the area of iron ore or steel, as there is huge demand still in China for those, not only domestically but for exports too.
We do have to remember that China, even if it cuts back from its approximate 10 percent growth, down to 8 or 9 percent growth, it's still the biggest growth market on earth, and will drive the commodity market for years to come.
I think a small slowdown in China is more likely than an outright crash, as the elements involved in their are much different than their Western counterparts.
Marc Faber on China
We've been talking about a lot of negative factors which could have a dramatic effect on the market and commodities lately, and all of them are important to keep in mind. That's the case with Marc Faber and his input on China.
Faber sees China as being at a tremendous risk of crashing, to the tune of about a 30 percent chance. He adds that whether it crashes or not it will definitely slow down.
With that in mind, it will have a significant impact on certain commodities, as the Chinese government, to a certain degree, is starting to tighten up some on its lending.
I'm not convinced on the motives of the Chinese yet though, as I think some of tightening is a move in relationship to negotiating on some of its commodity imports, specifically iron ore.
Even so, they do want to cool the economy down some, and that is probably a surety going forward.
The problem is where are they going to cut back on? It doesn't seem it will be in the area of iron ore or steel, as there is huge demand still in China for those, not only domestically but for exports too.
We do have to remember that China, even if it cuts back from its approximate 10 percent growth, down to 8 or 9 percent growth, it's still the biggest growth market on earth, and will drive the commodity market for years to come.
I think a small slowdown in China is more likely than an outright crash, as the elements involved in their are much different than their Western counterparts.
Marc Faber on China
Nouriel Roubini on China Tightening
Nouriel Roubini on China
While a lot of people have made a big deal about the tightening in China, I agree, with Nouriel Roubini that in reality there is not much real tightening going on, and I think it's because of the negotiations China's going through concerning various commodities, including iron ore for its steel industry, among other commodity contracts they're negotiating over.
Eventually Roubini sees there will be an eventual tightening because of inflation, but that time doesn't seem to be here yet.
China is pretty cagey about its negotiations, and they got burned some last year when they didn't enter into predictable contracts with the major three iron ore companies, and spent more on the open market as a result.
Even with the so-called tightening, projections are China will lend at a growth rate of 20 percent form last year, albeit a little slower than the 30 percent at that time.
Nouriel Roubini on China
While a lot of people have made a big deal about the tightening in China, I agree, with Nouriel Roubini that in reality there is not much real tightening going on, and I think it's because of the negotiations China's going through concerning various commodities, including iron ore for its steel industry, among other commodity contracts they're negotiating over.
Eventually Roubini sees there will be an eventual tightening because of inflation, but that time doesn't seem to be here yet.
China is pretty cagey about its negotiations, and they got burned some last year when they didn't enter into predictable contracts with the major three iron ore companies, and spent more on the open market as a result.
Even with the so-called tightening, projections are China will lend at a growth rate of 20 percent form last year, albeit a little slower than the 30 percent at that time.
Nouriel Roubini on China
Friday, February 12, 2010
Marc Faber: China and Commodities
Marc Faber on China and Commodities
Normally I'm very close to the majority of conclusions made by Marc Faber, but in the case of his assessment that the Chinese economy may crash, I'm not so sure he has that correct.
One thing I want to see is if China is really going to tighten its domestic lending policies, or if it's using that as leverage as it continues negotiating prices for a number of commodities it needs this year, like iron ore, molybdenum and other raw materials.
Those are related to steel of course, and that goes beyond the slowdown in their infrastructure projects which had been financed by the Chinese government's stimulus package.
With steel being related in a large degree to exports for China, it does have some counter to the cut back in raw materials needed domestically. Copper on the other hand has a good chance to be vulnerable to downwards price pressure.
There is no doubt China is attempting to cool of its economy, and to some degree with a number of commodities it'll be interesting to see if they start dipping into their stockpiles which they built up over the last couple of years to have more control over commodity prices.
Short term it is quite possible China will encourage a downward pressure on some commodity prices, it's a matter of how long and how much which is what none of us can know.
Marc Faber on China and Commodities
Normally I'm very close to the majority of conclusions made by Marc Faber, but in the case of his assessment that the Chinese economy may crash, I'm not so sure he has that correct.
One thing I want to see is if China is really going to tighten its domestic lending policies, or if it's using that as leverage as it continues negotiating prices for a number of commodities it needs this year, like iron ore, molybdenum and other raw materials.
Those are related to steel of course, and that goes beyond the slowdown in their infrastructure projects which had been financed by the Chinese government's stimulus package.
With steel being related in a large degree to exports for China, it does have some counter to the cut back in raw materials needed domestically. Copper on the other hand has a good chance to be vulnerable to downwards price pressure.
There is no doubt China is attempting to cool of its economy, and to some degree with a number of commodities it'll be interesting to see if they start dipping into their stockpiles which they built up over the last couple of years to have more control over commodity prices.
Short term it is quite possible China will encourage a downward pressure on some commodity prices, it's a matter of how long and how much which is what none of us can know.
Marc Faber on China and Commodities
Thursday, February 4, 2010
Jim Rogers Still Likes China
Jim Rogers China and Commodities
...and China likes and need commodities.
While there are a few people zeroing in on the real estate market in China and exclaiming the country is in trouble, that's far from the truth, as China, as Jim Rogers continues to say, is still the hottest market on the planet. After all, where else in the world will you get close to 10 percent growth for a country?
Even if China drops to about 9 percent growth in 2010, who else is competing with those numbers?
Commodity demand continues to soar in China, as the recent demand for iron ore reveals, as China authorities attempted to negotiate prices down with major iron ore suppliers, but domestic demand was so high they were weakened by their own markets as internally steel producers were willing to pay the price companies like Rio Tinto asked for.
That's how demand even overcomes a command economy like China, where the needs outstrip the ability to centrally control or even negotiate prices, as demand is now and must be met quickly.
This is going to continue to happen with other commodities as well, even with the tightening up of the money in the country, which has made some people think China will cut back on spending.
Not only do I think that's doubtful, but I think it was an attempt by China to negotiate lower prices by giving the public appearance of tightening up money in the country.
That seems contrary in that tightening money would seem to make prices go up more. But like I mentioned, this more than likely is posturing by the Chinese who I think are trying to hide the demand so commodity prices may continue at lower rates.
Jim Rogers China and Commodities
...and China likes and need commodities.
While there are a few people zeroing in on the real estate market in China and exclaiming the country is in trouble, that's far from the truth, as China, as Jim Rogers continues to say, is still the hottest market on the planet. After all, where else in the world will you get close to 10 percent growth for a country?
Even if China drops to about 9 percent growth in 2010, who else is competing with those numbers?
Commodity demand continues to soar in China, as the recent demand for iron ore reveals, as China authorities attempted to negotiate prices down with major iron ore suppliers, but domestic demand was so high they were weakened by their own markets as internally steel producers were willing to pay the price companies like Rio Tinto asked for.
That's how demand even overcomes a command economy like China, where the needs outstrip the ability to centrally control or even negotiate prices, as demand is now and must be met quickly.
This is going to continue to happen with other commodities as well, even with the tightening up of the money in the country, which has made some people think China will cut back on spending.
Not only do I think that's doubtful, but I think it was an attempt by China to negotiate lower prices by giving the public appearance of tightening up money in the country.
That seems contrary in that tightening money would seem to make prices go up more. But like I mentioned, this more than likely is posturing by the Chinese who I think are trying to hide the demand so commodity prices may continue at lower rates.
Jim Rogers China and Commodities
Thursday, January 21, 2010
Gold Plunges | Buying Opportunity?
Gold Prices Fall on Stronger Dollar
There is a huge demand for gold as a protection against inflation and misguided and endless printing of money, which continues to devalue the U.S. dollar, even when, as it did today, it has its occasional moments of temporary strengthening, which puts downward pressure on commodity prices for the short term.
That was the case yesterday as gold prices fell to their lowest levels in about a month, dropping by $27.40 or 2.4 percent to close the session at $1,113.60 an ounce.
News from China was given as the reason for most of the reason behind the U.S. dollar increasing in value for the day. Stock prices also fell as a consequence of the announcement from China.
Most of those who want to continue to buy gold should consider these temporary and short-term market corrections as buying opportunities, and this is a potentially good one, although gold prices could drop more depending on how much the media covers the China issue of cutting back on its lending to cool their economy, which has generated concerns of a domestic bubble.
Many of us hope that the news from China on cutting back lending continues, as it will drive the price of gold down to levels many investors have been waiting on the sidelines in hopes of. If it drops to around $1,000 an ounce, or maybe even to $1,050 and ounce, we could see big buying at that time.
Gold should continue to rise in price over the next decade or so based on the huge amount of money that has been poured into the market by the printing presses of nations around the world.
We could even have a short-term rebound in the U.S. dollar which will be touted as a major positive by the clueless, before it's hammered down again by market forces.
Either way, gold prices could begin to drop if the Chinese story continues, and that will be a great story and opportunity for gold investors looking for another great time to add to their gold holdings.
Gold prices and China Lending
There is a huge demand for gold as a protection against inflation and misguided and endless printing of money, which continues to devalue the U.S. dollar, even when, as it did today, it has its occasional moments of temporary strengthening, which puts downward pressure on commodity prices for the short term.
That was the case yesterday as gold prices fell to their lowest levels in about a month, dropping by $27.40 or 2.4 percent to close the session at $1,113.60 an ounce.
News from China was given as the reason for most of the reason behind the U.S. dollar increasing in value for the day. Stock prices also fell as a consequence of the announcement from China.
Most of those who want to continue to buy gold should consider these temporary and short-term market corrections as buying opportunities, and this is a potentially good one, although gold prices could drop more depending on how much the media covers the China issue of cutting back on its lending to cool their economy, which has generated concerns of a domestic bubble.
Many of us hope that the news from China on cutting back lending continues, as it will drive the price of gold down to levels many investors have been waiting on the sidelines in hopes of. If it drops to around $1,000 an ounce, or maybe even to $1,050 and ounce, we could see big buying at that time.
Gold should continue to rise in price over the next decade or so based on the huge amount of money that has been poured into the market by the printing presses of nations around the world.
We could even have a short-term rebound in the U.S. dollar which will be touted as a major positive by the clueless, before it's hammered down again by market forces.
Either way, gold prices could begin to drop if the Chinese story continues, and that will be a great story and opportunity for gold investors looking for another great time to add to their gold holdings.
Gold prices and China Lending
Monday, January 11, 2010
Jim Rogers | No China Bubble
Jim Rogers China Bubble
Jim Rogers seems to be exasperated by a number of so-called experts who seem to be calling bubbles on anything that rises in price; including countries like China.
As Rogers educated Nouriel Roubini in concerning gold lately, a bubble isn't a bubble because prices rise. A bubble in gold will happen, according to Jim Rogers, when everybody starts to start investing in gold, without knowing why. At this time very few people are investing in gold, and until that dramatically changes, there won't be a gold bubble.
Rogers maintains sometime in the next decade gold will probably hit somewhere around $2,000 an ounce.
As far as China goes, Rogers is striking out at global hedge fund manager Jim Chano, who claims China is also in a bubble, and that the bubble will burst sometime soon.
The China economy is built on a solid foundation according to Rogers, and the country is a great place to invest in.
As far a Chanos goes, who is a notorious short-term trader, you have to wonder how much of China he has shorted in a variety of companies, which is probably what caused him to make his remarks in hopes of making a quick killing.
Of course Chano may have made those trades for some time, and could be in danger of losing a lot of money betting on China being in a bubble that he thought would burst, but hasn't.
Rogers probably knows the Asian and Chinese investment sector as well as any Westerner, and if he says China's not in a bubble, I tend to believe him more than anybody else.
As far as commodities go, China seems to continue to be buying them up, but now it looks like it'll be not just for domestic consumption, but to feed the export industry, which may be starting to grow again.
Jim Rogers China Bubble Burst
Jim Rogers seems to be exasperated by a number of so-called experts who seem to be calling bubbles on anything that rises in price; including countries like China.
As Rogers educated Nouriel Roubini in concerning gold lately, a bubble isn't a bubble because prices rise. A bubble in gold will happen, according to Jim Rogers, when everybody starts to start investing in gold, without knowing why. At this time very few people are investing in gold, and until that dramatically changes, there won't be a gold bubble.
Rogers maintains sometime in the next decade gold will probably hit somewhere around $2,000 an ounce.
As far as China goes, Rogers is striking out at global hedge fund manager Jim Chano, who claims China is also in a bubble, and that the bubble will burst sometime soon.
The China economy is built on a solid foundation according to Rogers, and the country is a great place to invest in.
As far a Chanos goes, who is a notorious short-term trader, you have to wonder how much of China he has shorted in a variety of companies, which is probably what caused him to make his remarks in hopes of making a quick killing.
Of course Chano may have made those trades for some time, and could be in danger of losing a lot of money betting on China being in a bubble that he thought would burst, but hasn't.
Rogers probably knows the Asian and Chinese investment sector as well as any Westerner, and if he says China's not in a bubble, I tend to believe him more than anybody else.
As far as commodities go, China seems to continue to be buying them up, but now it looks like it'll be not just for domestic consumption, but to feed the export industry, which may be starting to grow again.
Jim Rogers China Bubble Burst
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