The quest for energy resources — CNN Video
CNN Video — Militants agree to stop attacks. Nigeria’s oil minister tells CNN China and U.S. are vying for their oil.
Newswire: Jim Rogers
“I don’t see any adequate-supply situation in any commodity market over the next decade or two,” Rogers, the chairman of Singapore-based Rogers Holdings, said today in an interview in New York. “The commodities boom is not over and the bull market has several years to go.”
“I own some cotton,” Rogers said. “I own some sugar,” he said. “Sugar will go much, much higher over the course of the bull market.”
“Oil could reach between $150 and $200 a barrel,” because known reserves of crude are declining, Rogers said. He said international relations, particularly between the U.S. and Iran, will help guide prices.
“Natural gas is very cheap,” he said in the interview between sessions at an ETF Securities Ltd. investor conference.
Commodities ‘Best Place’
“Commodities are the best place to be, if you ask me, based on supply and demand,” Rogers said. He said he hasn’t invested in equities outside of China in two years.
“Everything has gone through the roof,” Rogers said of equities prices, adding that he may consider buying stocks “if something collapses.”
Click here to read the complete Bloomberg article
China Nurtures Futures Markets in Bid to Sway Commodity Prices - WSJ
ZHENGZHOU, China — Chinese leaders are concerned that their nation’s enormous economic expansion is becoming an excuse for foreign suppliers to inflate commodity costs. So, they hope to use their three futures exchanges to fight back.
“It is true we have a long-term goal of increasing our influence in terms of pricing, but to do that we have to create conditions and do it step by step,” Jiang Yang, chief futures-industry policy maker and assistant chairman of the China Securities Regulatory Commission, said in an interview. “But as the Westerners say: ‘Rome was not built in a day.’
But Beijing believes hosting big futures markets will enhance the country’s economic security by essentially advertising what the world’s biggest customer for some commodities considers a fair price. For the rest of the world, the exchanges could mean less guesswork about China’s buying habits, possibly reducing volatility in the global market.
Silver Lining: Jim Rogers Talks Up Commodities – Time Magazine
Jim Rogers’ daughters may not have been born with silver spoons in their mouths, but they’ve got them now. Not silver spoons, exactly, but silver bullion. “My little girls don’t own stocks — they own commodities,” he says, “and that’s why they’ll be able to take care of me in retirement.”
Rogers sees three big secular trends now, and he’s acting on all of them. First, America’s role as the dominant economic power is declining, so why own American stocks? (He doesn’t.) Second, China is emerging, and even though it may have crises from time to time, it is a good place to invest. (He does.) Third — and this is the biggie — emerging nations including China are greatly increasing the future demand for commodities such as oil. (He’s in with both feet.)
“Thirty years ago, 3 billion people were not even participating in the world economy, and now they are trying to live like we do,” he notes. That emerging megaforce, says Rogers, will put a supertight squeeze on commodity prices across the board, from beef to bullion.
Oil Climbs Above $73, Nat. Gas Rallies as Equities Fly High – Rigzone
Jumping toward $74 a barrel on an American holiday, crude oil rallied more than $1 from last week’s closing price, bolstered by a weaker dollar and a rise in the equities market. Also gaining today, natural gas closed 12 cents below $5 as the energy commodity continues to strengthen despite bearish fundamentals.
After rallying to an intra-day high of $73.84, the price of crude oil settled slightly lower to $73.27 on the NYMEX Monday, a gain of $1.50 from Friday’s close. Additionally, the US dollar eased against a basket of foreign currencies, helping to spur a rally in today’s commodity prices.
China Iron Ore Imports Exceed Real Demand, CISA Says – Bloomberg via Chinamining.org
Iron ore imports by China, the world’s largest buyer, have exceeded real demand by 50 million metric tons this year, the country’s steel association said.
China’s iron ore imports surged to a record this year, hurting the group’s bid to negotiate a contract price cut bigger than the 33 percent offered by Rio Tinto Group and BHP Billiton Ltd. The nation is looking at cutting the number of licensed importers, industry minister Li Yizhong reiterated today.
The Economist has just published a new article about China’s abundant and ever more precious rare earth metals. This adds to a flurry or articles, which have recently made it into major English language publications here in the US and Canada—including the Wall Street Journal, Market Watch and the Canadian Business Week.
The value of global rare-earth trade last year was just $1.25 billion, and it is projected to grow to about $3 billion by 2015—not much by most accords. However, the metals in question are absolutely essential for many high tech industries because of their phosphorescent and magnetic properties.
Rare earth metals include terbium, dysprosium, yttrium, thulium, lutetium, neodymium, europium, cerium, and lanthanum. These metals, as described by The Columbia Encyclopedia usually occur together in minerals as their oxides ( rare earths ) and are somewhat difficult to separate because of their chemical similarity.
The state-controlled Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Company dominates production of “rare earth metals” in China. Alistair Stephens of Arafura Resources in Australia, explains, “the Chinese realized the strategic importance of rare earths decades before the West.”
Producing the latest flat screen TV’s, smart phones, wine turbines, solar panels and even electric batteries which power America’s new Chevy Volt (battery powered car), are all simply not possible without these rare earth metals.
I am not one to doubt the incredible potential of the free market system, but in this particular situation, Deng Xiaoping was wise not to trust in the free market to dictate his “rare earth metals” policy in the 80’s.
As commodity prices fell in the mid 80’s, rare earth producers in the United States and Canada were priced out of the market. Deng Xiaoping, the man associated with introducing markets in China, instead encouraged the development of mines in the mid-1980s as prices fell dramatically.
Rare earth metals may not generate as much revenue as oil does for Saudi Arabia or Russia, but it is clear if China chokes off supply and begins consuming more of their rare earth metals domestically, the developed world will need to find new sources.
Additional articles on rare earth metals:
Will China Tighten ‘Rare Earth’ Grip? – The Wall Street Journal
Rare earths are vital; and China owns them all – Market Watch
Rare-earth metals: The new China syndrome – The Canadian Business Week
Yuan Inflows to Rise as Dollar Loses Luster, WisdomTree Says — Bloomberg
Sept. 15 (Bloomberg) — Investors are putting more money into the yuan
on bets China will allow appreciation in the exchange rate to make it
more accepted as an international currency, according to WisdomTree
Investments Inc.
A weak dollar, linked to concern about record amounts of debt in the
U.S., will drive more funds into China and emerging markets given
prospects growth rates will exceed those in developed countries, Bruce
Lavine, president of investment firm WisdomTree, said in an interview.
Lavine said in each of the last three months there was an inflow of
$25 million into his $142 million Chinese Yuan Exchange-Traded Fund,
which was started in May 2008 and invests mostly in yuan
non-deliverable forwards. ETFs are listed on an exchange where they
are bought and sold daily like stocks.
“Five years from now you will see a thoroughly different landscape in
terms of internationalization of the yuan,” said New York-based
Lavine, whose funds oversee $5.1 billion in assets. “When the dam
finally breaks, it happens faster than you think.”
To access the full article please visit –
http://www.bloomberg.com/apps/news?pid=20601110&sid=a7FkyJviwSqE
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Sent from my mobile device
Jonathan (Jono) Warren is a friend of mine who is currently living in Beijing, but is moving to Kashgar, Xinjiang. You know the place where all the riots occurred a little while ago. He is beginning a tea business, where he will be importing Pakistani tea into China, packaging it in China and then selling it to super markets in the West.
Sounds crazy right? Well, regardless of your thoughts of this brief description of his business, the man is quite well read and paints a incredible story with his words… which you can find at his blog Garbage and Noodles (http://garbageandnoodles.blogspot.com/)
Here is a small excerpt from his most recent post “I sing, you sing, we all sing”
Up in Changbaixian, Liu Baiguo was that grower. The owner of a local Chinese-medicine shop (???), recommended Mr. Liu as his farm was the closest to the city, but produced some of the best ginseng. Liu walked into the shop and asked for the ones who were looking for him. He seemed genuinely excited to be able to show his roots to two bright-eyed American entrepreneurs.
He led us out of the shop, out of the marketplace, and into his car – a police car that he got to keep after his work as a chinese border customs official. At his fields, he told us everything he knew about ginseng, how he inherited his fields, how there are 92 workers working for him, how he plants trees on the plots where the ginseng is picked because the roots use up all the nutrients…
I thought it was very appropriate and a nice coincidence that upon returning from my business trip to China & Singapore, I turn on my blackberry and am flashed with this NYT article: American Graduates Finding Jobs in China.
BEIJING — Shanghai and Beijing are becoming new lands of opportunity for recent American college graduates who face unemployment nearing double digits at home.
“I’ve seen a surge of young people coming to work in China over the last few years,” said Jack Perkowski, founder of Asimco Technologies, one of the largest automotive parts companies in China.
“When I came over to China in 1994, that was the first wave of Americans coming to China,” he said. “These young people are part of this big second wave.
[Source: NYT - American Graduates Finding Jobs in China]
Nonetheless, after living and working in the country at the beginning of the crisis (Sept – Dec 08), and returning to do business this past month—the fact remains there is one thing you can find in China that is missing from my colleagues and friends here in the North-Eastern United States, down in Lima, Peru and Belo Horizonte, Brazil and across the pond in the UK and France.
“A positive outlook on the future.”
Walk the streets of Beijing and the city is full of people just as the NYT article above describes; motivated and adventurous young entrepreneurs and professionals from all walks of life that have come to China to build their respective futures.
Likewise, a considerable portion of China’s younger generations remain confident and positive about their futures. In a country of 1.4 billion people (probably more) you will hardly ever find a general consensus. What applies in Beijing, will not apply in western China in the city of Xinjiang. This does not change the fact, that the life styles and future aspirations of China’s youth are considerably different than those of their parents and grandparents.
The Chinese are not ignorant; they know things are probably worse than their government lets on. At the same time, critics in the west are too quick to point fingers and predict imminent economic collapse. Sometimes it is a bursting real estate bubble, an over-valued stock market due for a correction, plunging exports, or decreasing import demand. Critics will always find a way to well… criticize.
Now where is China going to put $2 trillion USD? Well according to
this Bloomberg article (see excerpt and a link to the complete article
below), China still plans to purchase US treasuries. However, if
China’s recent foreign policy and international investments tell the
world anything, it is that the total dominance of the US dollar as the
world’s currency is slowly coming to an end. This won’t happen over
night, and the US dollar will probably remain a big player for some
time, but eventually China wants to find new places to park its money.
Here’s a small except. See link below for the complete article from Bloomberg.
China’s foreign-exchange reserves probably topped $2 trillion for the
first time, drawing attention to the difficulty the government faces
in finding places to invest the world’s largest holdings.
The reserves climbed $67.8 billion to $2.022 trillion as of June 30
from three months earlier, according to the median estimate of six
economists surveyed by Bloomberg News. That would compare with a $7.7
billion gain in the previous quarter. The central bank may release the
number today or next week, based on the timing of previous
announcements.
Central bank Governor Zhou Xiaochuan ruled out any sudden change in
the management of the reserves last month after proposing that
governments investigate setting up a supranational currency. Premier
Wen Jiabao is concerned that China’s $763.5 billion of Treasury
holdings may fall in value as the U.S. sells record amounts of debt to
fund stimulus spending.
“There’s no obvious alternative for China to U.S. Treasury bills,”
said Stephen Green, head of China research at Standard Chartered Plc
in Shanghai. “The alternatives are limited for that much money.”
China’s reserves more than doubled in two and a half years as the
trade surplus pumped cash into the economy, fueling claims that the
nation’s currency is kept artificially low to help exporters. The
International Monetary Fund may describe the yuan as “substantially
undervalued” in a pending report, according to a person who has seen
the draft.
Bloomberg article:
http://www.bloomberg.com/apps/news?pid=20601080&sid=acAzOqr9lvKA
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Sent from my mobile device
Benito
International Trade Consultant
Mir Global Marketing LLC
http://www.mirglobalmarketing.com
http://www.chinasouthamerica.com
ChinaSouthAmerica has been over-run by embedded videos as of recent. The site will return to to the normal mix of my own personal analysis and coverage of news and developments relating to China, South America, South-South Cooperation, Commodity Markets and Micro-Finance.
I have been thinking about creating a new blog which I will dedicate to sarcastic, cynical, comedic based material of US-Pop Culture.
Content such as this video from the Colbert Report on Comedy Central shows a side of the United States people from abroad miss quite often, and that is, WE (USA) LOVE TO MAKE FUN OF OURSELVES.
| The Colbert Report | Mon – Thurs 11:30pm / 10:30c | |||
| The Clinton Curse | ||||
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John Adams final words, meant to encourage his fellow assemblymen to sign of the Declaration of Independence and the eventual first reading of the Declaration of Independence from the amazing HBO miniseries based off John McCullough biography on John Adams.
“Objects of the most stupendous magnitude. Mirrors which will effect the lives of millions, born and unborn are now before us. We must expect a great expense of blood and pain, but we must always remember that a free constitution of civil government can not be purchased at too dear a rate as there is nothing on this side of Jerusalem of greater importance to mankind.
My worthy colleague from Pennsylvania, has spoken with great ingenuity and eloquence. He has given you a grim prognostication of our national future, but where he foresees apocalypse, I see hope. I see a new nation ready to take its place in the world, not an empire, but a republic and a republic of laws, not men. Gentlemen, we are in the very midst of revolution, the most complete, unexpected and remarkable in the history of the world.
How few of the human race have every had an opportunity for choosing a system of government for themselves and for their children?
I am not without apprehensions gentlemen, but the end we have in sight is more than worth all the means. My believe says that the hour has come, my judgment approves this measure and my whole heart is in it. All that I have, all that I am and all I that I hope in this life I am not ready to stake upon it.
While I live, let me have a country. A free country!”
John Adams — 1776
