Jay,
In between your travels, here is Donx Coxe's call this week.
Message 21062689
and this:
"Well, the beautiful thing about investing in the base metals is that they are not driven by the economies of Europe and North America. What you do when you buy these stocks is you are taking a bet on economic growth in coming years in Asia – particularly China and India."
I have been thinking that the base metals will be the first to feel any slowdown of global economies. (Already Japan, Germany, Italy slowing).
I think that marginal demand drives spot pricing, and eventually this works into long-term pricing, on the upside. On the downside, again, maginal demand gets hit first, then the long term contracts get torn up. It happened with Japan and coal in the last downturn, and the Japanese told the Canadians ;take it or leave it'.
China has 40% non-performing bank loans. If the US and Europe get taken out of the picture, is Coxe right in saying Chin and India, with Asian demand, will keep demand strong. That means marginal demand. Japan didn't even need the US to slow to take a hit, oil prices did it.
I'm having a hard time with this story. I like energy. As for the BMs, I am having a hard time with them as a supercycle story.
D |
