Quote "Furthermore, when the Chinese property boom turns sour, various asset markets and economies will be impacted. First and foremost, the prices of base metals may fall from their lofty levels and this will affect the earnings of the major mining companies. Remember, China is the major importer of base metals and any slowdown in its real-estate construction will diminish demand for industrial raw materials. Accordingly, we have recently liquidated our investment positions in the base metals mining companies. Moreover, any fallout from the Chinese real-estate bust will surely impact the economies of the commodity-producing nations such as Australia and Brazil. Thus, investors should remain vigilant and perhaps reassess the risk/reward of their cyclical investments in these resource-rich nations. " http://www.kitco.com/ind/Saxena/feb252011.html .............................. I suppose this would mean the Aud would fall,which would be profitable for PM holders.
The Chinese will do their level best to keep their property market from collapsing. There's simply way too much to lose.
I think that the big gain to look for is the Aud going to what it was not long ago.65c US. Could happen with fall of iron ore,etc exports.Gold would might rise against USD on safehaven,and greatly against Aud.
Question; What does someone do when they've got everyone around them in debt and have all that money sitting around? There's no point building new things because everyone's maxed out their borrowing capacity. Answer; You just move down another level on Maslow's Hierachy of needs... Shelter's done now it's time to speculate on commodities, (food, energy, building materials, pm's etc) If the Chinese realestate bubble doesn't burst commodities including PM's will go into overdrive. If it does burst, realestate will be so on the nose that people will flock to safe haven's and PM's will go into overdrive the end game is always 'gold'.
Considering the rather imfamous chinese 'ghost towns' springing up, I wouldn't at all be surprised to note the average investor over there flocking to silver and gold. Oh, wait... [youtube]http://www.youtube.com/watch?v=_cjjTnUnkIc[/youtube] [youtube]http://www.youtube.com/watch?v=PqFpl31UwPI[/youtube]
The "ghost towns" over there are a bit unnerving, though I can't say I ever fully believed the China growth story. They are consuming and producing in huge amounts alright, and growing their middle class, but at what cost? In other words, is it being done efficiently or are they inflating a massive bubble?
Actually, what's more unnerving is what's going on here at home... Linkage : http://www.heraldsun.com.au/money/homebuyers-oblivious-to-rates/story-e6frfh5f-1226009923103 We have some reaaaaaal special people in this country, do we not?
Auspm, from an outsider's perspective it seems obvious there is a housing bubble in Australia. It looks exactly like what happened here from about 2002-2007. Enough inflation and you may bail yourselves out though, at least in nominal terms Didn't work for us, so I don't advise it, haha.
Shhhhhhhhhhhhhhhhh! There's people around here who would stab you with electrified chop sticks and scoop out your eyes with deep heat laden melon ballers for saying such blasphemy!!!
