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Realistbear

Chinese Economy Is Slowing--commodities May Get Rocked

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http://uk.biz.yahoo.com/25072006/244/china...ommodities.html

Business Week

China Slowdown Affects Commodities

By Brian Bremner
China is a developing economy that definitely punches above its weight class. It's a huge trading economy and voracious consumer of industrial commodities. And nowhere is the struggle by the Chinese government to wrestle down its high-flying economy being watched more closely than in the worldwide basic metals markets....../
Duncan expects downward pressure on the price of base metals such as copper, zinc, and nickel until the outlook for China's economy comes into sharper focus. "The short-term to medium-term, basically the next 6 to 18 months, could be rough," says Duncan.
The rise of China has largely been a positive trend for the world economy. The mainland is now a $2 trillion-plus economy with an outsized impact on trade and global commodity prices.
The flip side: If the Chinese economy gets into a jam, the repercussions will be felt far and wide.

Might be a good time to lighten up on gold and other commodities?

If China is going to slow down it may be "the trigger" for our housing market which will do badly in a recession. We already have a slowing US economy so add the 2 together and it may be time to go to cash.

Edited by Realistbear

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SLOWING? Perhaps.

But it has been growing at 11% per annum.

If growth slows to half that (5%), it will still be putting upwards pressure on commodities

True, but with a drop of 50% the hyper-inflated commodoties may drop by a commensurate amount? As we live in a speculative marketplace all movements seem to be exaggerated so a little bad news becomes a disaster and a rush to the exits. Volatility is good for no one but the very brave/lucky.

Case in point, small .25% drop by the BoE last year resussitated a dying housing market. Psychological impact was huge. Possibly the reason why Gordon cannot allow a hike. It would send a shock wave through the housing market far beyond the actual economic consequences that would normally flow from such a hike.

Bottom line: we are on a knife edge and anything could trigger a stampede. Cash is King for me.

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"Cash is king" that is a bold statement!

Interestingly many metals i.e iridium that are'nt traded on the derivatives market are also up comparatively to the mainstays of gold, copper etc.

I am still holding of mix of assets as cash is currently being devalued by 10%+ pa

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  • 331 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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