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theflasherman

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In reply to: flower on Tuesday 19/08/08 11:20am

Eight percent growth in China is equivalent to a recession. Below nine percent would make the authorities quite nervous.''

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i reckon he should be sacked as analysts, what a load crap he is talking about??

 

if chinese econony can grow at 8% /pa fpr the next 5---10years, then world economy will be safed from brink of deep recession.

 

the question is ---can china acheive it??????????

 

 

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In reply to: early birds on Tuesday 19/08/08 12:46pm

EB,

 

I think 8% is an easy target for China. It is useful to remember not too long ago inflation was running at about 8% (recent reported at 6.7%) with commodity input as one of the major costs. With oil and other basic industrial metals rapidly dropping in price, the pressure on cost is markedly reduced. In fact the whole of Asia, countries that supply China with intermediate/semi-finished products are benefiting from the drop in commodity prices, that I suspect after a short period of initial shock due to the runaway commodity price earlier this year, they, will be able to recover to their "normal" production level and life will move on as usual.

 

The question here is when, not if - how long will it take them and China to regroup/recover from this inflationary scare and go back to their march on urbanisation and industrialisation.

 

 

Cheers.

 

 

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QUOTE (early birds @ Tuesday 19/08/08 11:46am)

EB: Dont quite get your drift--here's the balance of the article.

 

My undersanding of what the Bloomberg reporter had assembled is that in many Asian economists view China has been on "hold" for a few months, and is now getting prepared to restart their expansion programme.

 

Remember that over the last year they have taken massive steps to strengthen their currency against the USD, have repeatedly put up interest rates and choked off credit demand, all that could quite easily NOW be reversed.

 

My main point was and still is: Watch Out--ASX Commodity Shares are far from finished-and China is the current key. (IMHO)

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``China needs much faster growth than an average Western country as it has to generate 10 million jobs a year,'' said Tao Dong, chief Asia economist at Credit Suisse Group AG in Hong Kong. ``Eight percent growth in China is equivalent to a recession. Below nine percent would make the authorities quite nervous.''

 

Economic statistics for July released in the past week showed a mixed picture. Exports rose, retail sales climbed the most since 1999 and spending on factories and property increased.

 

At the same time, weaker production growth foreshadowed softening demand for Chinese goods as the U.S., Japanese and European economies falter. A government-backed survey earlier this month showed export orders falling to a record, suggesting shipments may ease in coming months.

 

The People's Bank of China yesterday said demand from abroad ``will continue to weaken.'' The central bank has halted the yuan's appreciation, making exports more affordable to overseas buyers.

 

The yuan fell 0.2 percent to 6.8700 against the dollar today for a fourth weekly loss, the longest stretch since a peg to the U.S. currency was scrapped in 2005. The Chinese currency gained 6.6 percent in the first half, double the pace of a year earlier.

 

Olympic Closures

 

Factory closures and restrictions on construction, mining and motor vehicles to reduce pollution for the Olympics will also be a drag on growth in August and September, Goldman Sachs said in an August 8 report. Factories closed in Beijing and the surrounding areas account for 26 percent of China's economy, according to Goldman.

 

Inflation slowed to 6.3 percent in July, giving the government more leeway to promote growth. The government has already raised loan quotas for banks to help small and medium- sized businesses and increased tax rebates for exports of textiles and garments.

 

``Beijing wants her export sector to thrive,'' said Roth Capital's Straszheim. ``Since 2004 double-digit economic growth has been taken for granted.''

 

Policies to sustain growth in Asia's second-largest economy could put a floor under raw material prices, helping commodity- dependent countries from Australia to Brazil.

 

Fiscal `Firepower'

 

China has the funds to pay for pro-growth policies, according to Credit Suisse. The country has a budget surplus of 1.5 percent of gross domestic product and currency reserves equal to 45 percent of GDP.

 

``Without this firepower we would be very negative on both China and commodities,'' said Andrew Garthwaite, an economist at Credit Suisse in London.

 

China plans to spend 3.8 trillion yuan ($550 billion) on transportation and infrastructure in its five-year plan running through 2010 and this year is tripling annual spending on railways to 300 billion yuan.

 

``New policy measures to support growth could include further tax rebates for low-end exporters, an easing of lending quotas, slower yuan appreciation or even depreciation,'' said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. ``China is returning to the investment-heavy growth model we saw in 2003 and 2004.''

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In reply to: flower on Tuesday 19/08/08 03:17pm

my drift is ---if china can achieve 8% growth for next 5 years, that will be enough demanding for commodities to hold up Aussie economy.

 

NH

IMHO, chinese won't try to get 10% plus growth at near term, because they don't like to fuel the inflation that it just got under control.

 

i reckon 8% is enough for assie mining.

 

 

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In reply to: early birds on Tuesday 19/08/08 03:35pm

Turned the original chart around, but the original question remains:

 

"Commodities STRONGER FOR LONGER???

 

Watch the Oil price closely, it could well be that RUSSIA has an UNDISCLOSED agenda in Georgia.

 

Where do those oil pipelines lead to??

 

WHAT would the consequences be if Russia has decided (still ruled by Putin) to flex its muscles against a near paralysed USof A???

post-37-1219191371.gif

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London Metal Exchange to Consider Molybdenum, Cobalt Futures

 

By Claudia Carpenter and Chanyaporn Chanjaroen

 

Aug. 29 (Bloomberg) -- London Metal Exchange, the world's largest marketplace for industrial metals, may decide next week to begin trade in cobalt and molybdenum futures as prices surge for the raw materials used in iPods, laptops and steel products.

 

Commercial Director Liz Milan will on Sept. 4 propose the board introduce the contracts, the first for the metals on any exchange, by mid-2009, said Chris Evans, new products manager. A decision is expected the same day, he said. Molybdenum, produced during copper manufacture, is used to toughen steel, and cobalt used in rechargeable batteries comes from nickel production.

 

``We've seen a lot of interest from industry participants, from miners through to consumers and traders,'' Evans said in an interview today. ``Molybdenum and cobalt are byproducts of metals that already trade on the exchange so launching them should be considerably easier.''

 

The two metals have leapt in recent years, attracting the attention of investors, on rising demand for steel in Asia and mobile electronic devices worldwide. Output of the materials is dwarfed by metals such as aluminum. Molybdenum production totals about 190,000 metric tons a year and cobalt about 55,000 tons, Evans said. Aluminum output is about 40 million tons a year.

 

Some producers and suppliers say the introduction of the futures contracts will increase price volatility.

 

The trade ``serves no purposes other than attract pension funds and other people who should not be in the minor metals markets,'' said Anthony Lipmann, managing director of Walton-on- Thames, England-based Lipmann Walton & Co. Ltd., a supplier of cobalt and molybdenum. ``When things are going bad for them elsewhere they'd just flee the markets, causing a price slump.''

 

Price Collapse

 

The price of palladium has collapsed 35 percent since the end of June as speculative investors dumped the metal, he said.

 

Minor Metals Trade Association Chairman Charles Swindon in London declined to comment, saying the association prefers to wait for the LME decision. The MMTA has 115 members representing producers, consumers and trading companies of minor metals.

 

Credit Suisse Group, Switzerland's second-largest bank, began offering cash-settled swaps in off-exchange metals such as molybdenum and cobalt in August 2007. Hedge funds and pension funds are among the bank's clients, as well as producers, consumers and physical traders, according to Kamal Naqvi, head of fund coverage at the bank's commodities team in London.

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Just having a look at the Materials Index; it seems we're on the verge of a serious mood change. And my "educated guess" says it's likely to go up.

 

An earlier Head & Shoulders pattern has been completed right on target;

MACD looks more Bullish, and the last few weeks could be viewed as an ascending triangle.

Maybe there is another retracement due before the breakout - it's often referred to as a "4th attempt breakout", and so far the 14140 level has been tested only three times. For graphic examples, visit http://bartrade.net/trades/4th.htm

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