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Considering the fact that the Chairman and the CEO both get multi-million dollars pay from RIO, and yet they missed such "obvious" where even a bum such as me could easily see and had been pointing out ad nauseum in my many old posts -- it really makes me wonder why Rio bother to pay them this much. Or may be they should hire me to run Rio for them? Me, very cheapskate, I am happy to take half of what they get... I may even do without the bonus and golden handshake! :P:devilsmiley:



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What's wrong with Germany and China?


** according to the writer, these two countries don't make much sense and they are to be blamed for his country, the USA and the rest of the EU problem. In short, he is saying it is bad to save, to be thrifty and to live within one's means and it's good to spend and live beyond one's means and borrow your way out of any financial shortfall... and blah, in the usual twisted economic idea and nonsense. If he has a real brain and has memory, if he really can think and see or google, and if he really accept any counter argument objectively, all he has to do is to go back before the shithitsthefan moment and ask this very very simple and basic question: IF all the countries in the world, esp the USA+UK+EU-ex-Germany, were to have been living decently, well within their means and did not borrow to spend extravagantly, would their current demise happen?


Would GFC happen? Would the US$ be in such crappy state? Would he be writing the above crap of accusing Germany and China such bad arses in not spending enough to save the indebted states?


NO! None of that would happen!


...and Mr Wolf would not have to write such a twisted piece to piss someone like me off!

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Video - the US China trade wars...


** loud talking, shouting and frankly a lot of crap.


1) trades constitutes about 15% of the US GDP, revaluing RMB or not frankly is barking up the wrong tree.


2) according to Kudlow, in the last 3 years, the US exports to China have been increasing, if RMB is an issue, how do they justify that? Peter's argument was because imports from China into US are greater than exports, and its due to Chinese RMB's low value that is causing the local (US) products losing out -- ask this question: how valid is Peter's claim? That's when Kudlow was trying to cut him down/off because even Kudlow could see it doesn't make much sense when the US consumers can buy the same goods cheaper by 30%. The issue here is product competitiveness and marketing - the usual marketing 4P, check them out here.


If the US politicians want to make RMB an issue, I think the Chinese would welcome it as it surely would help them to "explain" a lot of things to the US politicians and the world over as currently the whole freaking usual internet media fog of war is running full steam with all kind crap being strewn around, making China the scapegoat in this "stupid" issue!


3) David Goldman was interrupted by Peter, but, frankly he was partially right in saying it's the Chinese saving the key to the US account imbalance -- the trick is to get the Chinese to buy more US goods, not by forcing them to raise their currency because like David has pointed out, the currency value is an arbitrary one -- who can accurately and correctly value RMB vs US$ where US$ is being supported by nothing but printing press alone? And the Chinese don't really believe in any American god anyway? Just who are those experts and smartarses in the NET that are telling the RMB is over-valued by 40%? How do they know and how do they tell? Further, these so called experts had been wrong and had been caught out so many times as proven by the onset of the GFC, what makes them think the Chinese will buy their valuation? In short, why would the Chinese listen to such arbitrary valuation and self-harm by slashing the value of their US$ reserves?


4) ... just realise I am wasting time again on this crap... bah! *&())(*&&^ stop now. Go fly a kite!

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Are you feeling lucky? Here's payback time...


** if you feel cold, it's okay. It's only natural and it's a self-defence mechanism -- it is telling you to be careful, that's all. No big deal and kick your leg higher... it's party time! Yea!


2012 also is the beginning of a three-year period in which more than $700 billion in risky, high-yield corporate debt begins to come due, an extraordinary surge that some analysts fear could overload the debt markets. With huge bills about to hit corporations and the federal government around the same time, the worry is that some companies will have trouble getting new loans, spurring defaults and a wave of bankruptcies.


The United States government alone will need to borrow nearly $2 trillion in 2012, to bridge the projected budget deficit for that year and to refinance existing debt.


"An avalanche is brewing in 2012 and beyond if companies don't get out in front of this," said Kevin Cassidy, a senior credit officer at Moody's.


Private equity firms and many nonfinancial companies were able to borrow on easy terms until the credit crisis hit in 2007, but not until 2012 does the long-delayed reckoning begin for a series of leveraged buyouts and other deals that preceded the crisis.


That is because the record number of bonds and loans that were issued to finance those transactions typically come due in five to seven years, said Diane Vazza, head of global fixed-income research at Standard & Poor's.


In addition, she said, many companies whose debt matured in 2009 and 2010 have been able to extend their loans, but the extra breathing room is only adding to the bill for 2012 and after.


The result is a potential financial doomsday, or what bond analysts call a maturity wall. From $21 billion due this year, junk bonds are set to mature at a rate of $155 billion in 2012, $212 billion in 2013 and $338 billion in 2014...


** I would say it again, only fools (or geniuses) will consider it safe to invest all their money into the stock market, buy and hold, and hope that they will come out winning! Don't like what I have just said? Well, tough! Try to take that as "good medicine" and good medicine tends to taste bitter... and it's for your own good! :) Ok, shuddup now... zipped!

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Aussie Service Exports...


Education services, Australia's biggest service export, increased in value by 23.2 per cent to $17.2 billion.Trade Minister Simon Crean said the service sector was the key to driving Australia's productivity across the globe.


"Services is not just a sector in its own right, it is also an enabler ... of Australian agriculture, of our manufacturing and our resource base," Mr Crean said in a statement...


** next time if you hear anyone complaining about overseas students crowding out the local students, you should tell him/her to shuddup because there's more than just the school fees, boarding/accommodation fee, etc they are bringing in to this country; those are the tangibles and are obvious to notice. What an average person doesn't see is the long term intangibles and benefits the education services are brining to this country -- the goodwill of the foreign students/country they come from -- this practically would provide a lot of invisible income to Australia, mostly unheard or unknown of by most Aussies, esp in the areas of import/export trades, tourism and diplomatic relationship between Australia and the home-nations of these overseas students... just keep this in mind, many of them will become leaders (of various fields - commerce, politics, industries, etc) in their home countries and they will carry immense amount of influence that could affect and impact Australia.


Education service/exports, if you like, can/should be seen as a form of investment, in this case, it's human/capital investment... the investment timeframe is a short 2 to 3 years, but its capital return could last a life time...

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NH, there is of course a corrollary to this. If the three major IO players got together and said that none of them would enter into a sole agreement, where would that leave the Chinese??


IMHO it would be counterproductive for one of the bigplayers to agree to an exclusive deal with the Chinese.


Ask any suplier who has agreed to contract with Coles or Woolworths. They agree to buy your product at price x this year.

After you have ramped up and spent loads on capital improvements, the "customer" next year says, sorry, can't pay that this year, its down to half of last years. What do you do?? Tell them to get nicked?? Take the medicine and hope you survive??



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That's why I said China might have problem pulling off this trick at the moment. But there's no guarantee they won't carry out such threat once they have found alternative sources to alleviate the current supply squeeze. In my view, the eventuality of China to "hit back" and get their money back is as good as 50/50 (my speculation here). The following is just what came to my mind, kind of scenario play, all based on my "imagination"...


1) if/when the 2012-2015 debt repayment tsunami hits the west and when the global econ is going into its second phase of contraction, China, I believe will be going into a much stronger cooling phase and that's when their steel production and IO demand will be at a low, this is when it become crucial for all the parties where io supply/demand will be readjusted -- that's the moment where such a deal could be applied and killed the unofficial supply alliance -- at least this is where I think I will hit them as the reward/impact/potential for the preferred supplier will be that much greater: a) surviving the hard time and dominating the future market, b) killing off one or two of the major competitors.


2) China's internal ship tightening where the steel industry is completely overhauled with just a few big steel mills with io purchases managed and controlled by a national agency aka the Japanese model. Frankly there's no reason why China cannot work with Japan and S.Korea as a team in negotiation. The Japanese did give the Chinese a chance to prove themselves and gave up when they saw the Chinese steel mills were "that" dysfunctional, who knows they may give the Chinese another chance once the Chinese can prove to them they had tightened up and reorganised?


3) The power of monopoly/duopoly -- it works both ways -- right now the suppliers are in control, but unless the big 3 have that absolute understanding and unshakable faith in each other, there's no telling when put under stress as in pt 1, that one of them might just switch. Take a look at the recent paper cartel between AMC and Visy. Self interest always comes first.


4) The quarterly spot market pricing -- good for the io producers, but very bad for steel millers and general industrial production and planning. Just in time manufacturing has been a norm in the last 20 years, with spot market pricing and with price demand/fluctuation varying from 60%, 90% (what's next? 120%?), it will become impossible for any io consumers, steel customers to plan or budget... this just my view as I have no idea how the whole production chain is run in China for instance. Assuming they are much less efficient comparing to the Japanese and the S.Korean, can you imagine what is the impact this kind of price changes to the whole industry and the whole economy?


Just consider the obvious -- inflation is already up and will be up with a multiplier effect, the financing cost, insurance cost, and distribution cost, god knows what else will be turned upside down. They might be able to cope with this in the current year, but the next and after that?


The bottom line is very simple -- if the Chinese econ dies, so will the good time in Australia. So will the mining sector that so closely relying on exports to China. This is my ultimate worry -- the big 3 single-handedly killed the goose that lays the golden eggs for the whole of Australia.


5) Assuming I am worrying about nothing as in the above pt.4 scenario, but put yourself in China's position, esp their economic planners' position -- when face with such potential threat/disruption to their economy and self interest, what'd they do? What'd you do? If you still think and hope they will play nice, aka Simon Crean's appeal, I'll be realistic here -- he is dreaming, no chance in hell.


So what's next? Let's wait and see what the Chinese would do next. Or how the price will settle? The higher the price, the higher the cost, the higher the cost, the higher the pressure... at some point, the whole thing will blow... just wait and see as usual.

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Thanks. Whilst I did laugh along with Jon's antics, but "that" sense of frustration and anger he was echoing among the people, I believe is quite real. Bad news for the Democrats and good news for the Republicans.



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