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Re: China +Copper......Spin or substance?
If true it is a brilliant move, for a sovereign wealth fund with a command and control economy that will need to build major infrastructure for its citizens in the near future.
They can treat it as an investment, or use it up in government projects over the years. It makes alot more sense for China to invest in oil and gas leases, metals, and agriculture than to spend its money on paper promises from countries with very shaky economies. -
Re: China +Copper......Spin or substance?
Darn!!!
I've been investing in the wrong metal! Where did I put all those Lincoln pennies?
Don't see what the Chinese are all so upset about:
"...China has woken up. The West is a black hole with all this money being printed."
I mean after all, it looks like the President and Ben are now going invest in Arnold Schwarzeneger's latest real-life action film:
Schwarzenegger to Seek Obama Backing for Note Sales
April 15 (Bloomberg) -- California Governor Arnold Schwarzenegger and the state’s finance officials plan to press the federal government to insure their short-term debt as they prepare to sell $15 billion of notes in the next few months.
http://www.bloomberg.com/apps/news?p...vOe78&refer=us
What's not to like about this plan?
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Re: China +Copper......Spin or substance?
Not sure if I trust this base metal rally: the Chinese are stockpiling... for what again? Is ANYONE else stockpiling??? For WHAT, again?
The chinese are importing iron ore because it's cheaper than native stuff. The iron ore mines in china are ready to shut down!
Yes, china will burn a lot of base metals in their next 5 year plan, but the real determinant are interest rates, not efforts to pull demand.Comment
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Re: China +Copper......Spin or substance?
they'd rather stockpile industrial metals than tbonds. if you had to choose, wouldn't you?Originally posted by phirang View Post
fred and ej have been talking about when/how/into what to move out of cash. the chinese first did some diversifying among the fiats, but now they've got the idea that it's time to own real assets. given the size of the assets they're playing with, they can't wait til the last minute to begin their purchase program.
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Re: China +Copper......Spin or substance?
The Chinese have done this before, with copper in fact, during a low in the price cycle. Too much is being made of this relatively minor move.
The Chinese stocking some inventory vs buying a mining company is like any of us iTulip members installing a fuel storage tank vs buying some producing oil assets.
Watch what they do with the suppliers of the commodities; they are now able to buy quality assets that were previously politically off limits. The irony is that they now get to buy them cheap.
Here's one splendid example. Rio is in a tough spot. If they don't sell assets and shares, they are faced with the prospect of rolling over the Alcan acquisition debt with...more debt. The shareholders are unhappy. But the regulators are telegraphing they won't stand in the way of a deal. And while Australian politicians huff and puff, I seriously, seriously doubt that if the shareholders vote down the Chinalco deal the Aussie and UK governments can politically do much of anything to bail out an overindebted mining company and its foolish shareholders [and management]. They will instead have put the company in the position of having to sell assets at even more distressed prices having knocked the Chinese out of the bidding...a scenario I don't think will come to pass.Rio Q1 iron ore output down, defends Chinalco deal
Wed Apr 15, 2009 12:50pm EDT
SYDNEY/LONDON, April 15 (Reuters) - Miner Rio Tinto (RIO.AX) posted weaker first-quarter aluminium and iron ore output on Wednesday and defended its $19.5 billion asset and stake sale deal with China's Chinalco in front of unhappy shareholders...
...Rio (RIO.L) released its production figures on the same day as its annual general meeting, which gave shareholders a chance to let off steam over a plan to sell state-owned Chinalco stakes in prized assets and allow it to double its holding in Rio to 18 percent...
[under the deal Chinalco will buy iron ore, aluminum and copper mining assets from Rio for $12.3 billion and spend another $7.2 billion to buy converts that will raise its stake to the 18% in the parent company. This is on par with the failed CNOOC purchase of Unocal, where the Chinese offered $18.4 billion, albeit those were 2005 dollars
]
...The deal has sparked opposition from some shareholders who want to participate in Rio's fundraising and from Australian politicians worried about Chinese influence in a key sector...
Germany approves Chinalco's Rio bid
Rio Tinto says Chinalco's $30 billion bid to increase its stake in the miner has received regulatory approval in Germany...
Australia regulator won't oppose Chinalco-Rio deal
SYDNEY (AP) - Australia's competition watchdog said Wednesday it would not oppose Chinalco's plan to double its stake in debt-laden miner Rio Tinto because the deal probably would not give the companies unfair influence over global iron ore prices...
Last edited by GRG55; April 15, 2009, 10:01 PM.Comment
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Re: China +Copper......Spin or substance?
No kidding, one of my uraniums just caught a bid from the chineseOriginally posted by jk View Post
check out MGAFF (disclosure, I own it,no intent on selling it)Comment
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Re: China +Copper......Spin or substance?
Phirang's nose is working pretty good for this reader. Copper's briskness and the general sense of perkiness in the commodities is hinting at being vulnerable.
Can gold get down into the low 800's going into the summer?. Copper down to $150? Silver down to ten and a half? USD can wind up this summer looking quite perky against CAD, AUD, GBP, and Swiss franc. I'm sleeping quite comfortably with my USD holdings. Well maybe that's an exaggeration. At least for the next couple of months I'm looking for it to break out over 86 and surprise a lot of people who swear it's putting in a double top.
Selling silver at $14.50 and gold at $950+ never felt so right as just now to this observer. Got a pile of greenbacks to deploy into sub-$9 silver and sub $750 gold (if I can get it in the next 12 months. I think so on a sharp dip!).
Let's see if we come close to those ranges going into the summer.Last edited by Contemptuous; April 17, 2009, 12:59 AM.Comment
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Re: China +Copper......Spin or substance?
Really, copper and base metals are a question of where risked capital wants to hide.
If TSHTF this summer, it'll be Fall '08 all over again. You know the drill there: short the phonebook.
My real problem with the global economy is that capital flows are a DISASTER: while the global swap lines are ready to rescue a given bank, and so we probably won't see another money market collapse, there's a FUNDAMENTAL economic problem: whom do we export to now?
The only bull case I see for base metals SHORT TERM(of course, fundamentals for copper etc are fine long term, but then we're all dead) is China building up its navy or FX constraints. However, it's complicated, because the harder the US demand-pulls, the more FFR must go up and the worse future recession will be(a la EJ's 1970's analogy).
To glibly say, "ah the US will export more" is dangerous: export to whom? Every chotchka we export takes food out of a chinaman or german hand and puts it in an American one.Comment
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Re: China +Copper......Spin or substance?
Don't forget that they've been busy buying Africa for a few years now. That amounts to an earthen warehouse with a corrupt, kleptocratic security guard. It's the same strategy listed in the article if less liquid.Curiousity, skepticism and green vegetables.Comment
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Re: China +Copper......Spin or substance?
what a brilliant & clever move of China !
Also an other hit for Mr EvansPritchard.Comment
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Re: China +Copper......Spin or substance?
Sweden was first, monetized copper back in the 1700's to pump up the price when copper was a Swedish near-monopoly. The rest of Europe was not stupid enough to fall for it and weasled out. In the end a lot of the copper plate money (the world's largest coins, the biggest up to 17kg. each or so) was shipped out as ballast.
Any country importing copper would be a fool to try to monetize it.Justice is the cornerstone of the world
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Re: China +Copper......Spin or substance?
"I've been investing in the wrong metal! Where did I put all those Lincoln pennies?"
http://www.coinflation.com/
$0.0143238 is the melt value for the 1909-1982 copper cent on April 17, 2009.Justice is the cornerstone of the world
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Re: China +Copper......Spin or substance?
I think Zero Hedge's take on this is worth considering:Originally posted by Mega View Post
The False Chinese Driven Rally in Copper
http://zerohedge.blogspot.com/2009/0...in-copper.html
and
http://zerohedge.blogspot.com/2009/0...th-copper.html
"The price of copper has largely followed the trajectory of many other markets. As we stated, we don't think we are close to the bottom (despite the recent equity rally) but copper looks susceptible to a particularly sharp correction as equity and commercial real estate numbers worsen. With real estate (new construction) looking to get worse before it gets better and electronics of all kinds seeing almost universal demand pressures, it's tough to see any major upside. The only potential savior is China going ahead with expansion in the face of a terrible export outlook and its reserves getting spanked by the dollar; not the most bankable sentiment."Comment
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Re: China +Copper......Spin or substance?
"Diversifying among the Fiats". I get a picture in mind of an eligible bachelor swanning around at a debutantes ball. :rolleyes:Originally posted by jk View PostComment
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