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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (9914)	10/8/2006 11:37:13 AM
From: Arran Yuan	Read Replies (1) \| Respond to of 218621

China can be compared to USA 1905/1920, and when doing so, all becomes much easier to comprehend Wow, thinking alike! In addition, nobody could even derail it. Au over 20% of US/LME spot in Beijing? Is that about bullion or finished goods? Anyway, that is a huge change since last October when I got pandas 10-15% below spots in Wuhan.

To: TobagoJack who wrote (9914)	10/8/2006 8:49:04 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 218621

Nonsense TJ. It can be done in a few years, with some things taking only a year or two. <It is difficult to satisfy a 600 years pentup demand within 2 years, or 20, or 200.> Life is lived by individuals, not in 100 year chunks. A baby is born and by age 20 they are fully ready to go and they do not carry a 600 year deficit. A baby born in China doesn't need to learn how to fix a carburetor, solder some plumbing, or hang wires across poles to a twisted pair telephone. They go straight to the 21st century. China can just let a Japanese company build a $10bn cyberphone network in a joint venture with Huawei and Unicom [one puts up the money, another does the work, the third sells it to subscribers]. A German maglev company can supply photo-electronic controlled super-speed transport systems, skipping decades of lead-polluting internal combustion engine traffic jams. China doesn't need to first import steam engines from industrial revolution Britain. Hey! Here's Hayes...bye... Mqurice

To: TobagoJack who wrote (9914)	10/8/2006 9:15:30 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 218621

Gold on the streets of Beijing cost 20% more at current exchange rate to the dollar (cost USD spot price plus 20%), and so one might reason that RMB is over-valued against the USD in a rather objective way. That's interesting.. Expectations of inflation in advance of an economic deflationary implosion? Or will Chinese flee from Yuan to gold and dollars on the day of reckoning? I mean, isn't the point of the article that China foreign currency reserves are approaching 1/2 their annual GDP? There's so much money and so few quality places to invest it that it's spurring speculative excess. Besides, RMB at 50% revaluation against the USD will not make any difference to China export to USA, but make some difference to China butying of USA if USA was actually for sale (oil companies, etc), which is apparently forbidden. Gosh.. foreign companies are restricted from buying steel companies in China. Don't see how that is any different than an oil company: en.ce.cn And now it's real estate: news.xinhuanet.com China is not export savings via goods. China is accumulating savings via export of goods; how else can one explain a trillion reserve? Mercantilism.. It's nothing new.. Japan did the same thing and look where they wound up.. The most indebted (on a percentage of national debt to GDP) country in the world and commercial real esstate prices that slumped 85% from peak to trough. China is undergoing once in a 800 years reform, is satisfying a 600 year pent-up demand for roads, airport, dams, etc, and so there is a construction frenzy, but hardly a speculation bubble. All the real estate space is and will be taken up, as it has for the last quarter century. I certainly don't disagree with the general context, but when there is tremendous demand and limited supply, there is ALWAYS speculation. Especially in a country where only 10% of the land is arable. Such money can hardly said to be 'hot money' since China has a closed capital account, and any money getting in cannot easily get out. Maybe that might explain the premium being paid for other currencies over yuan. When a nation has currency controls it creates a natural inclination for currency smuggling. You must start from a new premise, that the growth story is (i) genuine, (ii) once in every 800 years, (iii) awesome, (iv) transformational, and (v) not a 'bubble'; else your analysis will continue to be faulty, and your expectations never be met. I don't reject this premise. I didn't say that China's economic progress would collapse forever. But I think it's evident that it's not going to be smooth sailing. There are going to be some major economic shocks, I suspect... And I'll tell you why.. The US suffered a sucession of boom and bust cycles prior to WWI. If you recall the financial panic that resulted in the creation of the Federal Reserve, you'll know that it was decided that the financial excesses of both the government, as well as the general economy, could only be moderated if the national monetary policy was taken away from the government and put in the hands of the bankers. Right or wrong, with regard to loss of national sovereignty, the decision to create a Federal Reserve has worked pretty well, IMO. But can anyone in China really claim the the People's Bank of China is independent of its political masters? Can it govern Chinese monetary policy in a manner that will prevent economic excesses?? Until China has such an organization, I don't know how the world, let alone the Chinese people, can truly have confidence in their financial system. And when that shock occurs, as I fear is inevitable, it may very well create a major backlash. And China isn't going to be the only country that suffers. The US will suffer as well, IMO. Hawk