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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (5237)	4/29/2004 11:06:59 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Heinz on China and Gold Date: Thu Apr 29 2004 09:28 trotsky (China's boom and China's bust...) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved note that a bust does not usually develop in a sitution where everybody is worrying that it might. it doesn't happen that way - more likely, the bust will come when everybody has STOPPED worrying about it. it will be a surprise. yes, China's central planners have decided to step on the credit brakes. but i would submit that they won't dare to choke off credit to the extent that would be necessary to stop the expansion in a meaningful manner. they still remember their LAST bust, and it wasn't pleasant. this time around, it would get even more unpleasant - and the danger of social upheaval is what the communist party of China fears most. my bet: similar to what happened when easy Al first tapped the brakes in mid '99, the boom , instead of faltering, will go into overdrive. only AFTER everyone is convinced that nothing can stop it will the credit tightening bite, with the usual lag inherent in monetary policy steps. note btw. that China is far less monolithic and centrally controlled than is generally assumed in the West. this is a VAST country, hosting several ethnicities ( the sub-set Uighurs in Xinxiang for instance numbers nearly 90 million people ) , and lots of local party bosses who have their own agenda. Beijing is simply a far away place for many of them, whose edicts only have marginal importance. the momentum of this typical credit induced boom won't break that easily - after all, last year alone, the broad money supply increased by over 21%. so far this year, there has been no slowdown whatsoever, on the contrary. however, one must be aware that it won't continue forever. it's clearly a dangerous malinvestment bubble, and one day it WILL go bust ( thereby revealing the malinvestmens for what they are ) . so one needs to keep an eye on it. note also: the cassandra factor. the doomsayers began predicting the downfall of China's boom by the middle of last year. by experience, they are usually about 1 1/2 to 2 years early. Date: Thu Apr 29 2004 09:10 trotsky (gold 'seasonals') ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved supposedly, this is a season of 'weak physical demand'. however, somebody forgot to tell the Indians. currently, the major Indian gold trading centers sell almost the equivalent of one BoE auction every single day, i.e. roughly 18 tons of gold. so we have a situation where speculators have deserted gold, just as physical demand in the major gold buying area of the world is coming on unexpectedly strong ( and no doubt is getting even stronger now, since Indian gold demand is at least to some extent price elastic ) . Date: Thu Apr 29 2004 08:08 trotsky (pm stocks) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved will capitulation occur today? always possible, note that in Rydex, money still hasn't flown out of pm stocks, in spite of a big NAV drawdown.

To: Wyätt Gwyön who wrote (5237)	4/29/2004 11:11:23 AM
From: mishedlo	Respond to of 116555

Peak Oil Oil Production in Decline Message 20074885

To: Wyätt Gwyön who wrote (5237)	4/29/2004 11:20:38 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

China: Reasserting Control Andy Xie (Hong Kong) morganstanley.com ============================================================ Seems he did not get the word that China did not stop lending. Lots of conflicting news from China these days M

To: Wyätt Gwyön who wrote (5237)	4/29/2004 11:44:36 AM
From: mishedlo	Respond to of 116555

From Andy on the FOOL - a look at GDP estimate ======================================================= Who expected 5%? My theory is that one guy, sitting in a dark room, watching Maria (and Maria reruns at night), drinking beer, eating pizza, burps out 5%. He sends an email to his brother who is an economic analyst at some big firm, but who has been drinking bottle after bottle of expensive wines with Maria look-a-likes everynight forever. He is too hung over to really do any analysis so he figures his brother probably knows what he is talking about and prints the 5% estimate for the major firm. Everyone picks up on the 5% and it becomes "the estimate". CNBC picks up the number and dumb people with lotsa money make big bets. In the end, these astute investors either have more sex with Maria look-a-likes or get drunk on hard liquor - depending on the announced number's relationship to the original beer and pizza burb. That's just my theory. I don't have any links or video tapes to back it up... Andy

To: Wyätt Gwyön who wrote (5237)	4/29/2004 9:03:05 PM
From: elmatador	Respond to of 116555

<<America's per capita oil use is 20 TIMES that of China's. this means every American has the equivalent, in BTU terms, of some 300 hydrocarbon "assistants" working for him night and day--by contrast, the average Chinese person only has 15. with a 20:1 oil advantage,>> That's the reason Bush is stealing Iraq's oil in broad day-light. Oil price skyrocketing is bad news.