26 April 2012

Spot-Checking China

Recent weakness in product sales to China are accompanied by a spike in raw materials hoarding in the middle kingdom. Here is a look at copper stockpiling by China:

Is China Being Buried Alive in Copper?

Copper and other commodities can be used as security for loans, and as a type of safe haven for value -- as long as one can rely on commodities prices trending ever upward. But Chinese warehouses are overflowing with hoarded metal stocks, and it isn't clear where the trend is leading, or if the final payoff will materialise. The same type of hoarding is taking place with crude oil and other high value commodities.

Dropoff in Product Sales to China
Meanwhile, the dropoff in product sales to China suggests that consumer demand -- as well as commercial demand -- may be suspended, at least temporarily.

Porsche preparing for China slowdown China slowdown to hurt ag commodities

It is important to keep in mind that global commodities price/demand is being supported largely by China at this time. It wouldn't take much of a slowdown in Chinese demand to burst the global bubble, once again. Particularly when Europe is suffering a slow-motion debt and demography debacle, and the US continues to endure the ongoing Obama recession.

Try to keep a realistic viewpoint of the possibilities and likelihoods when investing your hard earned assets.


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Blogger neil craig said...

If China has that nuch spare money around the best thing they could do would be to put it into supporting a few $ trillion worth of X-Prizes for everything from space to aging research to time travel. I don't think anybody would win a $10 billion prize for a time machine, in which case no harm done, but you never know.

Saturday, 28 April, 2012  

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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