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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: THE ANT who wrote (170938)7/20/2012 7:56:21 AM
From: elmatador  Read Replies (1) of 206114
 
There is a lot of money the U.S. has to invest to get its energy in country. Compare with the past when that investment was done by other countries and the US had only to pay for its energy imports with US Dollars to get its energy. Such was the advantage of holding the world currency status. If that money is invested in energy production, in country, it is no longer available for consumption.

Before US loaned its newly printed US Dollars for a fee. Emerging markets were up to their neck in debts. The US would pocket those profits. Another advantage of holding the world currency status. That piggy bank is no longer there as the emerging markets became creditors.

In the Europe case, it had advantage of being the center of production. Having no natural resources, it relied on investing in developing products, amortize them at home, and export and the exports' revenues value was pure profit. That until other countries entered that European-dominated markets and its population aged.

In the case of U.S. energy, US imports became deficit to Canada and consumption became deficit with China.

The US already started pushing down those deficits: energy with Canada and consumption to China.

This will continue for the next ten years with US forcing these deficits to come down. Getting its own energy and lessening Canada's imports and China will export less consumer goods to the US as its appetite for consumption goes down.

Still staying with energy:
Brazil is trying to consume and invest at the same time!! Consumer needed to prop GDP up and billions need to go dig out that pre-salt oil, coal in Mozambique and expand ethanol production for the expanding car fleet plus invest into infrastructure to gain productivity. That's the balancing act Mantega and Tombini have to do at the moment and will continue for the next 10 years.

There is money to be made. But people will need to produce stuff and exporting them to pay for its imports.

Canada strive to sell energy else where

China strive for new markets for its good (creating the prchasing power elsewhere.

Brazil balancing act: consume invest and raise productivity.
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