Why hasn’t inflation caught up with a monetary-induced boom in China?
The 2000s have been the worst decade for U.S. stocks in 200 years, reports yesterday’s Wall Street Journal. Meanwhile, it’s been a somewhat better decade for the Global Market Index, a passively weighted mix of all the major asset classes that’s the benchmark for our sister publication, The Beta Investment Report.
The report below comes courtesy of the Gold Anti-Trust Action Committee (GATA). “Market analyst Paul Mylchreest, who wrote the 2006 report for Credit Agricole’s Cheuvreux brokerage house concluding that the gold market was being manipulated surreptitiously by central banks and, the following year, a similar report for Redburn Partners, has revisited the gold market in […]
This week we are offering another preview of our global economic outlook for Q4, which will be released to RGE’s clients later this month. The following is a sample of our analysis on Latin America. The full version of the outlook goes into greater detail and includes RGE’s country-by-country projections for economic growth and several major indicators.
RGE maintains the position we took in our July outlook: Latin America will recover in 2010, but its expansion will likely be below potential. Given aggressive foreign and domestic policy responses in Latin American countries, the region is stabilizing in H2 2009 after having contracted severely in H1 2009. Although global and regional economic and financial conditions will likely improve in 2010, RGE expects the pace of external and local demand revival to be measured. Commodity prices will stay on hold in the middle ground between record highs and recent lows, mainly because of below-potential recovery in the U.S. and advanced economies, as well as in China. Though global liquidity will remain elevated in the upcoming quarters, favoring LatAm asset classes, market anxiety about the timing of exit strategies around the world represents a significant risk. Miscalculations in exit strategies and disappointing economic results pose the main risks to LatAm market dynamics in 2010.
Is China building a rare metals cartel equivalent to OPEC? Analysts began contemplating this possibility last month when a draft report by the Chinese government surfaced stating that China planned to ban the export of rare earth minerals. Last week, Chinese officials stepped back from this claim and said they were only planning to reduce export quotas of rare metals to 35,000 tons per year from 53,000 tons in 2008. World demand is currently over 110,000 tons and expected to grow to 188,000 tons by 2012, according to the U.S. Geological Survey (USGS). Since China is responsible for 97% of the world’s current rare metals production, fears have developed that global green technology will be held hostage since hybrid cars, cell phones and wind turbines all require rare metals. Moreover, the number of uses of these metals keeps rising.
To further compound the suspicion that China wants to control the world’s supply of rare metals, China has recently signed deals to buy large stakes in two Australian rare metals mines that could start production within one to two years. It is estimated that these two Australian mines could have a combined production of 25% of current global output, according to the World Business Council for Sustainable Development. Additionally, China tried—unsuccessfully—to buy the U.S. Mountain Pass mine on two occasions.
Everyone seems to be all atwitter over Gold breaking a $1,000 (again). This is the third time in 18 months that Gold has breached that level, failing the prior two times. There seems to be an obsession with base 10 numerals, an evolutionary coincidence of the fact we Humans have 10 fingers and 10 toes. […]
The Chinese are getting serious about addressing overcapacity that has developed in industry, according to statements released by the state press. This should be seen as a positive development given concerns about a bubble in property and shares and stories of malinvestment related to China’s attempts to reach lofty growth targets. China’s State Council said […]
It is staggering the pace at which new autos are hitting the roads of Beijing, with the rate now touching 1,200 a day. After passing the U.S. in terms of new car sales earlier this year, the citizens of China seem eager to make up for lost time in getting to developed world levels of […]