China Invests in Production and Commodities While the US Feeds the Sharks

China is securing long term supplies of oil, aluminum, iron and other hard commodities at 'favorable prices for years to come.'

The United States is investing in increasingly worthless paper, insolvent banks, crony capitalist ponzi schemes, non-productive consumption, and enormous bonuses for Wall Street financiers.

After a visit to China a few years ago, touring their factories with workers quietly hunched over their worktables in fear, working whatever hours were offered in difficult conditions, Bill Gates observed that this was 'his kind of capitalism.'

The choices you make, what you choose to do or not to do, will pay significant returns, either good or ill, for your children and your children's children.

Plus ça change, plus c'est la même chose.


NY Times
With Cash to Spend, China Starts Investing Globally
By David Barboza
February 21, 2009

SHANGHAI — With the world suffering through a tight credit market, China has suddenly gone shopping.

Beijing said on Friday that one of its big state-owned banks, the China Development Bank, agreed to lend the Brazilian oil giant Petrobras $10 billion in exchange for sending China a long-term supply of oil.

That investment came after similar deals were signed this week with Russia and Venezuela, bringing China’s total oil investments this month to $41 billion.

China’s biggest aluminum producer also agreed earlier this month to invest $19.5 billion in Australia’s Rio Tinto, one of the world’s biggest mining companies. And last Monday, the China Minmetals Corporation bid $1.7 billion to acquire Australia’s OZ Minerals, a huge zinc mining company...

China wants reliable supplies of crude oil, to fuel its growing transport sector; it needs iron ore for steel production, and copper and aluminum to build homes and consumer goods...

Analysts say China could continue to make deals for a variety of small oil and gas companies, mineral producers and mining firms.

This week, for instance, shares of the Australian miner Fortescue Metals Group rose after reports the company was in talks with China over a big investment to help the company expand.

In many cases, China has struck deals in countries that have access to large supplies of oil and minerals but where American and European countries are not well-positioned, like parts of Africa and the Middle East.

In one deal this week, China made an alliance with the government of Hugo Chávez, the president of Venezuela, who has denounced American leadership.

While the oil deals announced vary in terms, analysts say they ensure China a steady supply of oil for decades to come, sometimes at favorable prices....

The SP 500 and Short Term Indicators

The short term indicators are getting stretched to the downside, and the other narrower indices are approaching their own support levels.

Perhaps a techinical bounce at some point, but no higher than overhead resistance. A stairstep decline such as this can be quite damaging, and often will continue until it finds strong support, a footing and a V bottom. It may require a plunge, otherwise it just keeps bleeding.



The SP 500 seems likely to test the prior low at 741. We may get a legitimate double bottom. The overhead resistance will cap any purely technical bounces. That is how we will tell them apart.



The McClellan Oscillator is getting overextended to the downside.



This has 'plunge to a bottom' written on it. But we might just continue to slowly bleed.

The US Employment Picture

The official US Unemployment Percentage Rate.



The average number of weeks a job seeker is unemployed.



The percentage of people in the Civilian Labor Force who are working.

This statistic helps to keep track of workers who are 'discouraged' and no longer included in the official unemployment rate.

This statistic shows that there never really was any recovery after 2001, that the appearance of growth was ephemeral, all a bubble spun by the Fed and the Banks and the Bush Administration.



Source: Bureau of Labor Statistics

Gold Reaches New All Time High in India

The rush to physical gold amid devaluing currencies is a world phenomenon largely unnoticed in the US because of the flight to safety in the US dollar and a strong institutional bias among Wall Street which prefers to deal in paper for its higher turnover and richer fees.

If this trend changes, if the dollar loses some of its own safe haven appeal, if the gold shorts are forced to capitulate despite the propping from the Central Banks, then this could be a surprisingly strong market move.

Gold is already proving to be a desirable alternative to the Swiss franc which as we have noted before has become a disgraceful shadow of its former self because of Swiss government mismanagement. Watch the Swiss howl when their interest rates must move higher to accommodate the debasement of their currency to salvage a corrupt banking sector.

The Economic Times (India)
Gold at all-time high of Rs 15,800 per 10 gm in Delhi
19 Feb 2009, 1350 hrs IST

NEW DELHI: Surging gold prices set yet another record of Rs 15,800 per 10 gram in the national capital on Thursday in line with the surging global bullion markets on speculation that the global recession will deepen further.

The precious metal recorded fresh gains of Rs 50 to Rs 15,800, a level never seen before, after poor economic data of Russia and Japan raised concerns of a growing malaise of global recession.

Jewellers and market analysts said the demand of the yellow metal picked up after the global equity and forex markets dropped in the recent past.

They said shaky investors find no other option but to park their funds in the precious metals, while physical buying for the current marriage season declined substantially

We do not see any customers these days as surging gold prices cooled down the demand for jewellery in this marriage season," said a Delhi-based Jeweller Gaurav Anand.

A similar firming trend in other regional bullion markets in the country also dampened trading sentiment to a great extent. In Kolkata, the gold opened at a record high of Rs 15,925 per 10 gram.

Meanwhile, gold in futures trading touched a new high by rising 0.88 per cent to Rs 15,712 per 10 gram at the MCX counter.