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Gold/Mining/Energy : Precious and Base Metal Investing

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To: russwinter who wrote (30232)	8/11/2004 5:40:04 PM
From: alburk	Read Replies (2) of 39344

Russ If a US economic downturn is in the works, a significant downturn, could that explain this lack of concern about diminishing resource supply/inventories. If the US consumer hits the wall, what happens to China? If China has excess capacity, isn't there a double whammy--less demand for resources for 1) exported goods and 2) to expand the Chinese infrastructure. And, if the US consumer drops out, who steps in to replace it? You have said (paraphrasing) that it would take a major slowdown to avoid severe shortages. Could this "double whammy" effect do it in the intermediate term? Granted, in the short run shortages may occur, but if the shortages are perceived as temporary due to an oncoming and significant reduction in demand, the development plays would garner little respect. The commodity prices would spike, but the development plays may not respond until the market is convinced that intermediate remains in tact. Any thoughts? Just trying to come up with a plausible explanation here. Andy

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