For the last 40 years, Americans have lagged in recognizing the declining fortunes of their foreign rivals. In the 1970s they thought the Soviet Union was 10 feet tall -- ascendant even though corruption and inefficiency were destroying the vital organs of a decaying communist regime. In the late 1980s, they feared that Japan was going to economically overtake the United States, yet the crony capitalism, speculative madness, and political corruption evident throughout the 1980s led to the collapse of the Japanese economy in 1991.
Building infrastructure at breathtaking speed. Creating the world's factory. Stringing together quarter after quarter of 7%, 8%, 9% and even 10% growth. These are some of the strengths of China's economic system. And sometimes, as we watch the U.S. and global economy struggle with the fallout from a financial crisis that started in the United States, or the economies of Europe sink again into recession, it can seem as if China's system has only strengths.
A key private sector indicator on Thursday, which showed Chinese factory activity slumped to a nine-month low in August against expectations of a modest pickup, throws up the question whether the worst is yet to come for the world’s second largest economy.
China's apparent oil demand rose 2.4% year on year in July to 38.92 million metric tons (mt), or an average 9.2 million barrels per day (b/d), a just-released Platts analysis of recent Chinese government data showed. This is a rebound from June’s first monthly contraction in more than three years.
By Richard Mills
As a general rule, the most successful man in life is the man who has the best information.
"When I entered the business world, three-fourths of the world was closed - China, Russia, Vietnam, India, most of Africa... In 2010, the entire world is wide open, the developing world is growing twice as fast as the developed world and there's still arguably several billion people out there that will modernize and progress." - Caterpillar's CEO Doug Oberhelman
China overtook India to become the largest market for gold bars and coins in the first quarter of this year, as rising inflation inspired a surge in bullion investment.
[[wysiwyg_imageupload:2337:]]By Frank Holmes
After selling off nearly 14 percent the previous week, oil prices finished last week slightly higher at $99.65 per barrel. While the end result was a net positive, the volatility continued. Oil prices per barrel reached $104, then fell to around $96, before nesting just below $100.
As an investor, this volatility can be difficult to handle. Throw in the uncertainty of today's geopolitical environment, and investors feel the need to downsize their positions in commodity investments, such as oil.
We think markets could remain volatile in the short-term, but here are three long-term indicators to support $100+ per barrel oil prices.
[[wysiwyg_imageupload:2296:]]By Nick Barisheff
As we near the end of the first quarter of 2011, the potential for a widening of the uprisings in North Africa and the Middle East has pushed oil prices past the $100 mark. Long before the riots began, commodity prices had risen to uncomfortable levels, having soared over 30 percent in a matter of months.
Currency creation by emerging market central banks was, and is, a major factor behind the rise in oil prices. Egypt's M2 money supply, for example, rose 13.3 percent during 2010, while China's M2 money supply increased by 17 percent and India's M3 money supply increased by 15 percent. When currency creation outpaces GDP growth, too many artificially created rupees and yuan and pounds and euros chase too few goods, and price inflation results (Figure 1).
By Prieur du Plessis
The current market perception is that the impact of the terrible disaster in Japan on the global economy is likely to be limited to a shave-off of approximately 0.5% of global economic growth. The IMF's forecast for Japan was lowered from 1.6% prior to the earthquake to 1.4% in 2011. According to the IMF their initial estimates are that the damage could be twice that of the Kobe earthquake in 1995 or up to 5% of GDP. My initial estimates also called for a shave-off of global GDP growth of 0.5%.
China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.