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The Chinese Government has decided to restructure its dollar portfolio by spending its dollar reserves into the commodity market. The Chinese government perceives that the fastest
growing investment in the future will the red hot commodities market. The Chinese
growing investment in the future will the red hot commodities market. The Chinese
government cannot directly challenge the US DOLLARS and its trade consequences for the Chinese government so the government will take advantage of the commodity depression
to buy up commodities it will need for the future. The move is predicated on the fact that
to buy up commodities it will need for the future. The move is predicated on the fact that
we are entering into the beginning of a 23 year inflationary cycle where commodities will
lead the way into the future. The commodity market is ripe for a vast infusion of capital at
these low prices.(The interest cost for financing billions of dollars of commodity purchases by the government agencies is at a record low rate of interest of less 3% given the fact that at the end of this INFLATIONARY cycle the interest rates will top 18%) This is compounded with the Middle East needing to recovery from low oil prices and the fact that these interest rates it allows them to borrow billions of dollars to buy commodities at 100 times value. Every dollar borrowed will
be worth $100.00. What happens is that dollar lose purchasing power during inflationary times and commodities gain in value relative to dollars.
The inflationary cycle will be fueled by these large institutional buyers from these
foreign governments from Canada, Australia, Russia, Saudi Arabia and China. The role
of Brazil and India will continue the fuel to create a vast commodity network of buyers and
sellers of commodities. This vast influx of billions of dollars into the commodity market
will create the next economic growth. The question of growth in the Global Economy
will come from vast movement of funds into these marketplace. The stock market
explosion is a cover for the real explosion into commodities.
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