Tuesday, August 18, 2009

China, Commodities and the Financial Media

The financial media here in the United States, bought and paid for by Wall Street, continues to bamboozle the investing public. They continue to perpetuate the "global recession means lower demand for commodities" fairy tale among others.

The investing public for the most part has believed this story much as a small child will believe fairy tales. Investors have to realize that the United States is no longer THE economic superpower as the US once was 50 years ago.

In fact, when it comes to most commodities, the United States is a rather insignificant player. The demand for commodities is coming mainly from the emerging economies of the world - China, India, Brazil,etc.

Let's look at China. China's coal imports are nearly three times higher this year than they were last year. China's iron ore imports are up 32% from a year ago as Chinese steel production surged to all-time high.

And let's not forget about oil. In July, China imported 4.6 million barrels of oil per day, up 42% from last July. This figure is a new record and equivalent to half of Saudi Arabia's daily output. This figure is well above the previous high of 4.1 million barrels of oil per day which was set back in March 2008.

You remember that, right? The US financial media at that time fluffed off those figures as merely China stockpiling oil ahead of the Olympics. After all, China really isn't growing... They would never dare to challenge us in the US.

In July, China also imported a record 4.82 million tons of soybeans. Yes, Wall Street, people around the world do not want to live in mud huts and eat dirt just to please the arrogant, greedy "Masters of the Universe" on Wall Street.

And China is putting those natural resources to good use. For example, China has spent $50 billion this year on high-speed rail systems in China, creating over 100,000 jobs. They will spend another $250 billion over the next decade. By 2020, China will have laid nearly 16,000 miles of high-speed track. By comparison, America has only 457 miles of high-speed track.

You won't see that data appear anywhere in the US financial media. After all, China is just a bubble, right?


  1. Dear Tony. Don't underestimate the fact that the US still consumes 4 times more oil than China. But it is indeed true that the growth in demand lies in China. And I certainly agree that oil market analysts often are 'short-sighted', i.e. they look at US data only. Look at my article http://energytics.wordpress.com/2009/08/23/short-sighted-energy-market-analysis/

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