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talkpoliticsFirst some facts...
China has dumped (sold) 97% of short term US dollars (Treasury debt) as the American future looks ever the more bleak.
China is the largest foreign creditor to the United States, holding more than $1 trillion (26.1% of foriegn ownership) in Treasury debt as of March. Which is nothing really as USA politicians are attempting to curb a deficit which is projected to reach $1.4 trillion this fiscal year.
(Just for comparison, Japan holds/held $907 billion, UK $325 billion, Switzerland $111 billion, Canada $93 billion, India $39.8 billion, Israel $18.3 billion in U.S. Treasuries Securities as of March.) If you look at those numbers from treasury.gov China has been steadily holding less and less US treasury since Oct 2010!!!
And as China sells US debt, what China is buying is gold ($1530/ounce on Thursday!!!). But China is world's largest producer of gold, mining 351 metric tons in 2010 followed by Australia, USA and Russia. So trading USD for gold is one thing. I would argue the real investment is in commodities that China doesn't have in great abundance (it certainly doesn't have much immigration, if people are a resource) like energy.
However the great energy exporters, Saudi Arabia and Canada, are not exporting to China in the quantities they could. For the most part it doesn't even go to whomever is paying the top dollar. Oil is sold through long term commitments. Saudi only sells 9.4% of it's petroleum to China and Saudi exports seem to be in a bit of a decline (peak oil?). (Nearly) all Canada's pipelines run south to the USA, although that could change in next few years hampered only by aboriginal and environmental objections.
New untapped oil reserves are few and limited. It looks promising in Afghanistan (possibly 1.5 billion barrels), Israel (possibly 260 billion barrels), and USA/Canada (North Dakota/Saskachewan with possibly 3.0 to 4.3 billion barrels)
China's 5 year plan is focussed on non-fossil fuel/renewable energy. If it works, and China has been very good at achieving it's goals, it will no doubt change the global dynamics.
The world is changing faster then ever. If USA defaults we`re told we are all screwed. If USA survives this year, there`s always next year or the year after to worry about. It`s make the 2008 mortgage crisis that sunk many banks and economies seem petty. Well supposedly. I`m not so sure but I gotta give some heed to the experts.
So where to ride out the coming recession/depression? Europe is an economic powderkeg bursting first in Iceland (not really Europe) to Greece, and seems to be extremely volitile. Africa is still a political/social mess. The Middle East has shown us how vulnerable it was under the supposed stability of dictatorships. Australia (like Canada) seems to have a whole lot of natural resources. I'm not sure what's going on in South America. Asia seems to have been emerging strong for a long time. Japan has ebbed and flowed a few times. India proceeds slow and steady. China won't have us as anything but toursts.
I'm very confident in Canada, especially Alberta. We have been boom or bust throughout our history but it's been boom time for quite a while. Energy is our chief export and high oil prices have been our golden egg. But unlike Saudi Arabia all of our eggs are not in one basket. We have rode out the last few market crashes remarkably well. I think if/when USA defaults we'll still keep our head.
China has dumped (sold) 97% of short term US dollars (Treasury debt) as the American future looks ever the more bleak.
China is the largest foreign creditor to the United States, holding more than $1 trillion (26.1% of foriegn ownership) in Treasury debt as of March. Which is nothing really as USA politicians are attempting to curb a deficit which is projected to reach $1.4 trillion this fiscal year.
(Just for comparison, Japan holds/held $907 billion, UK $325 billion, Switzerland $111 billion, Canada $93 billion, India $39.8 billion, Israel $18.3 billion in U.S. Treasuries Securities as of March.) If you look at those numbers from treasury.gov China has been steadily holding less and less US treasury since Oct 2010!!!
And as China sells US debt, what China is buying is gold ($1530/ounce on Thursday!!!). But China is world's largest producer of gold, mining 351 metric tons in 2010 followed by Australia, USA and Russia. So trading USD for gold is one thing. I would argue the real investment is in commodities that China doesn't have in great abundance (it certainly doesn't have much immigration, if people are a resource) like energy.
However the great energy exporters, Saudi Arabia and Canada, are not exporting to China in the quantities they could. For the most part it doesn't even go to whomever is paying the top dollar. Oil is sold through long term commitments. Saudi only sells 9.4% of it's petroleum to China and Saudi exports seem to be in a bit of a decline (peak oil?). (Nearly) all Canada's pipelines run south to the USA, although that could change in next few years hampered only by aboriginal and environmental objections.
New untapped oil reserves are few and limited. It looks promising in Afghanistan (possibly 1.5 billion barrels), Israel (possibly 260 billion barrels), and USA/Canada (North Dakota/Saskachewan with possibly 3.0 to 4.3 billion barrels)
China's 5 year plan is focussed on non-fossil fuel/renewable energy. If it works, and China has been very good at achieving it's goals, it will no doubt change the global dynamics.
The world is changing faster then ever. If USA defaults we`re told we are all screwed. If USA survives this year, there`s always next year or the year after to worry about. It`s make the 2008 mortgage crisis that sunk many banks and economies seem petty. Well supposedly. I`m not so sure but I gotta give some heed to the experts.
So where to ride out the coming recession/depression? Europe is an economic powderkeg bursting first in Iceland (not really Europe) to Greece, and seems to be extremely volitile. Africa is still a political/social mess. The Middle East has shown us how vulnerable it was under the supposed stability of dictatorships. Australia (like Canada) seems to have a whole lot of natural resources. I'm not sure what's going on in South America. Asia seems to have been emerging strong for a long time. Japan has ebbed and flowed a few times. India proceeds slow and steady. China won't have us as anything but toursts.
I'm very confident in Canada, especially Alberta. We have been boom or bust throughout our history but it's been boom time for quite a while. Energy is our chief export and high oil prices have been our golden egg. But unlike Saudi Arabia all of our eggs are not in one basket. We have rode out the last few market crashes remarkably well. I think if/when USA defaults we'll still keep our head.
(no subject)
Date: 10/7/11 04:23 (UTC)But let`s be fair. Confidence is already lost, otherwise the USD would be stronger.
I always say USA's best asset is marketing (in a very broad sense). Not just touting what's good and great, but turning a falsehood into something believed. That's Hollywood, that's broadway, that's fifth avenue, wallstreet, and Washington DC summed up in a nutshell.
I'd also say that creative financing (banking/investing) is along those lines of America's marketing genius. What bought us the dot com bust, the S&L collapse and the mortgage crunch was perfect salesmanship of faulty products.
USA has been great at telling us that the Euro is a bad currency of trade and the world should stick with USD for translations of world trade. OPEC really would like to move to the Euro. Lately Russia has been suggesting a global standard currency backed by gold (http://www.nytimes.com/2011/07/08/business/global/russia-sells-gold-as-world-prices-rise.html), which again USA says is a bad idea. Why? Because USA couldn't pay to play.
(no subject)
Date: 10/7/11 04:25 (UTC)