Driftr
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Post by Driftr on Aug 4, 2011 14:05:21 GMT -5
Whatever, I copied the first few links after googling," China Reduces Exposure to Treasuries." And "China Buys Gold, Commodities." Weiss of Weiss Ratings has been discussing this for months and he is no dummy. & Discussing something and doing something are not the same thing. Agreed?
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djAdvocate
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Post by djAdvocate on Aug 4, 2011 19:38:48 GMT -5
Drifter: there was an article in the wall street journal about a month ago that quoted a Chineese official that said they were in the process of re-evaluating and reducing their their foreign debt holdings and in the process of looking at more stable markets to put their investments and were planning to expand their markets in China. What that all means is yet to be determined I suppose. again, the US is the most liquid debt market in the world. it is kind of like saying that you are going to start looking for other regions to hunt polar bear where the weather is better. good luck.
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djAdvocate
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Post by djAdvocate on Aug 4, 2011 19:54:36 GMT -5
And why can't China simply invest in gold or strategic metals. It's not as if paper is the only game in town. They invented paper money...and out of control inflation too. they can. if they want to soak up all of the inventory in the world and drive gold to $10,000/oz. personally, i welcome it. but i would consider that quite unwise.
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djAdvocate
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Post by djAdvocate on Aug 4, 2011 20:00:25 GMT -5
So they do multiple investments. It doesn't have to be gold. They can do zinc, China is a net importer of zinc. that market is bad for the Chinese. they need it for industrial purposes. investing in zinc will just make that job harder.copper, their copper situation is arguably worse. copper has performed VERY WELL for the last year, for an industrial metal. silver, titanium, mines, factories, you name it, it doesn't have to be a paper asset. Either raw materials or acquiring land or businesses will do nicely. i don't think there is really a good play for them, personally, in commodities. they are on their way to becoming the largest consumer of these items in the world. driving up the price of them will only make things harder for them. no, their options are "other currencies". i would be surprised if they managed to move 10% of their debt elsewhere, in the end.
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djAdvocate
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Post by djAdvocate on Aug 4, 2011 20:06:28 GMT -5
let's take zinc for an example.
the largest market for zinc is the LME. that exchange has 900KT of zinc in inventory right now. zinc is about $2M/KT, so that 900 KT is worth about $1.8B. if the chinese were to soak up that inventory, zinc would go to $5/lb. i think that long before it happened, they would be accused of "cornering the market" tho, and regulators would step in to stop it.
that amount of zinc represents less than 0.1% of all investments china has in bonds.
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djAdvocate
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Post by djAdvocate on Aug 4, 2011 20:16:11 GMT -5
But if they are the world's largest consumer of these metals, it stands to reason that obtaining a large supply would be a practical thing. After all, they would consume them and not just store them. At the very least, it would lower their production costs if they purchased, say, a few mines. they are already running full tilt, tt. actually, they are buying Australian mines like mad. at the rate they are going, they are going to own half that country in (50) years. that is why i own a lot of Australian mining stocks. ;]
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handyman2
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Post by handyman2 on Aug 4, 2011 20:22:06 GMT -5
Afghanistan has a mountain of precious metals. So who did they sign a contract with to mine them? China. Of course we have to make it safe for them to mine those precious metals first. Go figure.
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formerexpat
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Post by formerexpat on Aug 4, 2011 20:45:24 GMT -5
Maybe they'll purchase mattresses for more of their people so they don't have to sleep on the ground - and then store the money under those state owned mattresses.
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djAdvocate
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Post by djAdvocate on Aug 5, 2011 11:19:21 GMT -5
Afghanistan has a mountain of precious metals. So who did they sign a contract with to mine them? China. Of course we have to make it safe for them to mine those precious metals first. Go figure. LOL! China has shrewdly been seducing Venezuela, as well. they are turning into pretty good capitalists, for a bunch of Marxists.
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Politically_Incorrect12
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Post by Politically_Incorrect12 on Aug 7, 2011 15:44:02 GMT -5
Afghanistan has a mountain of precious metals. So who did they sign a contract with to mine them? China. Of course we have to make it safe for them to mine those precious metals first. Go figure. It's not unusual for us to make a place safe for some other country to reap the benefits.
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Post by BeenThere...DoneThat... on Aug 7, 2011 21:34:31 GMT -5
...stupid is a relative term...
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