Tuesday, June 9, 2009

More On China

http://www.mgn.com/news/dailystorydetails.cfm?storyid=9975

PRECIOUS SHIPPING EXPECTS DRY RATES CRASH


In conversations over the last few days, I have discussed the risks that China is taking with regards to their stimulus package. It was a significant amount of money and it is being deployed in the real economy: manufacturing & production.

It seemed to me that stockpiling was not the way to deal with a global slowdown. Does China know when this will end? It may seem like a good idea to buy industrial commodities when prices drop significantly, but I think it is a rookie mistake. How far will prices drop if the global economy does not rebound when China thinks it will?

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