although I referred to the China's data where demand was falling
First to the copper:
telegraph.co.uk
Copper stocks on the LME have risen from just 25,000 tonnes last July to 118,000 now, which suggests there is a bit of a surplus."
China's Non-Ferrous Metals Industry Association says copper demand will grow 8pc this year to 3.9m tonnes but it is unclear how much this will draw on world supplies now that local producers are ramping up their own output.
"China is no longer driving the market," said David Threlkeld, a copper expert at Resolved Inc. "It built up 1.3m tonnes of stocks last year and has actually reduced imports of fine copper by 50pc this year."
Data from the International Copper Study Group (ICSG) shows there was a global surplus of 48,000 tonnes in January compared with a deficit a year before, although inventories are still at a "critical low" of just four weeks.
Analysts say the market is finely balanced, making it vulnerable to any shift in Chinese growth prospects.
What goes for copper, broadly goes for other base metals as well, and ultimately oil.
He said copper was now trading at 88pc of its all-time high in 1966 when adjusted for inflation, while nickel had reached 90pc of its peak in 1988.
Both crashed after blow-off spikes. Jim O'Neill, chief global strategist for Goldman Sachs, said fears of a boom-bust in China hitting commodities were wildly off the mark. "China is fantastic for commodities," he said.
He predicted that the Chinese economy will sail on to overtake the economic powerhouse Germany "in the next year or so" before challenging Japan for number two slot in the world by the middle of the coming decade.
The bank has brought forward its estimate of the moment when China surpasses the US to 2035 (from 2042) as growth continues to outstrip expectations year after year....
....both cases, central banks had been lulled into a false sense of security by low inflation.
Robert Hsu, an American investor who was born in Taiwan, said that he expected "shattering losses" in state-owned enterprises once the full truth about their underlying finances are revealed.
He added that as many as 1,000 of the 1,400 companies listed on the Shanghai and Shenzen exchanges are a sham, calling them a crowd of "Enrons".
"I go where my American friends don't go, and I see what outsiders miss," he said.
Now the talking heads on CNBC yesterday agreed with this and said that China gubbments not going to allow this - they are cleaning up chinese corruption to stop the 1400 enrons from blowing up China and that is key reason we cant revalue chinese yuan right now - 1400 enrons would be exposed and send china into deflation.
Now as to oil - China buying planes - cars - gonna give 800 million farmers refrigerators and washing machines - that gonna take a lot of energy - no way around it
washingtontimes.com
Alluding to the "Great Game" of the 19th century, when Britain and Russia contended for supremacy in Central Asia, former Secretary of State Henry Kissinger observed in June in a Washington speech before the U.S.-India Business Council that "the Great Game is developing again." Mr. Kissinger, who executed Richard Nixon's "triangular diplomacy" involving the Soviet Union and China during the early 1970s, argued that "the amount of energy is finite, up to now in relation to demand." As a result, "competition for access to energy can become the life and death for many societies." Addressing a $4.5 billion natural-gas pipeline project from Iran through Pakistan to India, Mr. Kissinger remarked: "It would be ironic if the direction of pipelines and locations become the modern equivalent of the colonial disputes of the 19th century."
A new geopolitical "Great Game" is clearly unfolding as China's development-driven, rapidly rising demand for petroleum has played a significant role in soaring oil prices. The price of oil, which averaged less than $22 per barrel in 2001, has increased by about $50 per barrel since then, surpassing $70 in recent days. Over the same period, the U.S. Energy Information Administration (EIA) reports that Chinese oil consumption has increased more than 40 percent. That increase has accounted for more than a third of the total growth in worldwide oil demand over the same period.
China became a net oil importer in 1993. Today, China, which consumes 7 million barrels per day, half of which is imported, is the world's second-largest oil consumer and third-largest oil importer (behind the United States and Japan). Nearly half of China's imported oil comes from the volatile Middle East, where it has been busily signing long-term supply deals, including a $70 billion oil-and-gas deal with Iran.
China's future trends are even more dramatic than those of the past. Following the recent surge in China's demand for petroleum, its per capita consumption of oil is still less than 8 percent of America's. Adding 5 million cars per year, China expects its auto fleet to increase from less than 25 million today to more than 125 million within 25 years. As a result, the EIA projects that China's demand for oil will more than double by 2025, reaching 14.2 million barrels per day, and more than 10.9 million barrels will be imported. As a result, China's net imports will have increased by 8 million barrels per day since 2004. Until President Bush recently joined his six immediate predecessors by promising that America's addiction to oil would end, the EIA had been projecting that U.S. net petroleum imports, which averaged 4.2 million barrels as recently as 1985 (when China was East Asia's largest oil exporter), would exceed 19 million barrels a day in 2025, reflecting an increase of more than 7 million barrels since 2004.
The trends and arithmetic point to a significant increase in the possibility for "Great Game" problems to emerge, almost certainly in the Middle East.
My position is that real demand is increasing little bit but speculative demand is rising enormously.
Energy grids takes copper, china making thier own and trying to import less. Oil - well - mr. Fusion aint here yet - but maybe soon.
As per boom-bust theory, Credit bubble leads to higher demand (non-inflationary) then into speculative demand (inflationary) and then into hyperinflation (ponzi demand) or deflation.
I have seen WAY TOO MANY PBS programs of chinese women liking washing machine, dryer, refrigerator, starbucks, nice house, nice car - they don't want to go back to fields and work in rice patch.
So, we are having enormous speculative demand right now and it could evolve into ponzi demand or the crack up boom.
People want ENERGY and products and lifestyle having lots of energy GIVE - I have RARELY seen the person leave the city life want to go GREEN ACRES eddie albert sytle and go back to poor farm life - they may SAY they do - but few actually make the move. Hu Jintao said 800 million farmers want to come UP in the world.
It is just that most people are denying speculative demand as insignificant.
I think it is hugely significant - I can buy 600 mcdonalds 1 dollar hamburgers - I will never give general chen 600 hamburgers for 1oz of shiny metal. I cant eat the metal. I can buy a 100 dollar hooker for 6 nights for 600 dollars - i will never give that away for 1oz of shiny metal.
what happens if there is a currency depreciation? People
Steve Hanke said a yuan revaluation would expose those 1400 enrons and BOOM they go into deflation ala japan. He said possible USA engineering this to enact REGIME change.
like John are betting that these speculative demands will be highly profitable.
I hope he isn't getting crazy on wild bubble stuff - buy low, sell high.
I think, when USD depreciates, the speculative demand can become a ponzi commodity demand!!
Perhaps - wheat prices fell 50% during the depression - some guy - dennis gartman I believe just said on CBC tv last month to buy wheat cause you can't eat gold.
That is why Fed is going to jack up the interest rates.
They have to get americans to save - hu jintao got to get chinese to spend - buying cars, tv's, washing machine, refrigerators etc etc.
So may be John might make good money. But it is little bit unpredictable when we are at that stage. The bonds will suddenly become worthless and so can these commodity contracts (like the house prices)
If I believed in gold - I would buy the physical metal for the reasons the gold bugs say to buy it - i wouldn't trust paper gold anymore than paper iou's.
The fall happens suddenly. People are trusting that the Fed will make things happen slowly. I dont.
I just posted where Bernanke said it may be FAST change - but like in 80's - the world didn't come to end.
My investment strategy is to short i.e bet that assets/commodities will become worthless.
Many people go broke from rigged casino playing it that way.
Although I'm planning to short financials and not commodities.
I think rulers of rigged casino gonna be the last domino to fall - and I keep asking time and again - how do you change hundreds of thousands of finance people worldwide?
China’s labor market is still trying to absorb rural surplus labor. However, the SoE surplus labor has been mostly absorbed in this cycle. China can afford to improve working conditions without worrying about losing export market share. Increasing minimum wages and worker benefits (e.g., healthcare and pensions) is a lasting trend.
More wages, more washing machines, more energy.
Japan’s property market has at stopped its decline of the past decade. This has given Japanese households more confidence to consume. Japan’s consumption levels are likely to rise significantly in response to this turnaround in the property market
More consumption, more washing machines, more energy. |
