T Nation

China Ditching the Dollar for Copper

[quote]
“China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years.”

“The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources,” [Nobu Su] said. [/quote]

This could get interesting really quickly.

[quote]LIFTICVSMAXIMVS wrote:

“China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years.”

“The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources,” [Nobu Su] said.

This could get interesting really quickly.
[/quote]

look out Taiwan.

[quote]LIFTICVSMAXIMVS wrote:

“China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years.”

“The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources,” [Nobu Su] said.

This could get interesting really quickly.
[/quote]

I actually can’t wait to see what happens. We have never seen anything like this before and it should be wild ride.

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[quote]LIFTICVSMAXIMVS wrote:
Free investment advice right here:

Learn Mandarin[/quote]

Wurd. I thought they would have went to gold, silver or platium. Either way I knoew they would get out of the dollar because precious metals are actually worth somthing.

[quote]jawara wrote:
LIFTICVSMAXIMVS wrote:
Free investment advice right here:

Learn Mandarin

Wurd. I thought they would have went to gold, silver or platium. Either way I knoew they would get out of the dollar because precious metals are actually worth somthing.[/quote]

Shit, the Chinese have been stocking up on gold and silver for like the last 5000 years. They may have invented paper money, but they’re not slaves to it.

Copper…just like Francisco D’Anconia.

Interesting

[quote]pwilliams wrote:
Copper…just like Francisco D’Anconia.

Interesting[/quote]

I was waiting for HH to bring this up. You beat him to it.

Common cents.

You may be interested to know that there is approximately 1.62 cents worth of copper in a pre-1982 penny.

Which means that $1000 worth of these pennies would be worth approximately $1620.

It is, of course, illegal to melt down US coins for their metals, or to export them for sale to, say, China.

So, of course, nobody should ever do this.

But it is interesting to know.

[quote]dhickey wrote:
pwilliams wrote:
Copper…just like Francisco D’Anconia.

Interesting

I was waiting for HH to bring this up. You beat him to it.[/quote]

Just picked it up, about half way through it.

[quote]Varqanir wrote:
Common cents.

You may be interested to know that there is approximately 1.62 cents worth of copper in a pre-1982 penny.

Which means that $1000 worth of these pennies would be worth approximately $1620.

It is, of course, illegal to melt down US coins for their metals, or to export them for sale to, say, China.

So, of course, nobody should ever do this.

But it is interesting to know.[/quote]

It costs more than 1.62 cents per penny to buy a pre 1982 penny. And if you bought 1000 worth of pennies in 1982, this would constitute less than a 1.8% annual return.

wonder how fast they are going to go about unloading the US$ reserves.

Could be ugly for the value of a dollar.

[quote]Evil1 wrote:
wonder how fast they are going to go about unloading the US$ reserves.

Could be ugly for the value of a dollar.[/quote]

Well, no – your understanding of cause and effect is backwards. Chinese investors are ditching the dollar because the value of the dollar is already ugly.

They know that the fed is just printing paper which has no value. It is better for them to divest their dollars now while they still can.

[quote]LIFTICVSMAXIMVS wrote:
Evil1 wrote:
wonder how fast they are going to go about unloading the US$ reserves.

Could be ugly for the value of a dollar.

Well, no – your understanding of cause and effect is backwards. Chinese investors are ditching the dollar because the value of the dollar is already ugly.

They know that the fed is just printing paper which has no value. It is better for them to divest their dollars now while they still can.[/quote]

While I agree that the Chinese are dumping dollars (East Asians are the smartest ethnic group on the planet), they have an internal contradiction: they have a command structure at the top and a free market economy below. As members of the free market accumulate wealth and therefore power, the Communists can either cede power, or crush the upstarts. Which does anyone here think will happen?

I suspect that they will have some sort of revolution there and that will be that. In fact, if you were American and powerful, would it be out of the bounds of logic to CAUSE such a revolution there? It happened in Russia in the early 20th century (to prevent Russian econ development).

British and American elites are destined to rule the world.

[quote]Headhunter wrote:
LIFTICVSMAXIMVS wrote:
Evil1 wrote:
wonder how fast they are going to go about unloading the US$ reserves.

Could be ugly for the value of a dollar.

Well, no – your understanding of cause and effect is backwards. Chinese investors are ditching the dollar because the value of the dollar is already ugly.

They know that the fed is just printing paper which has no value. It is better for them to divest their dollars now while they still can.

While I agree that the Chinese are dumping dollars (East Asians are the smartest ethnic group on the planet), they have an internal contradiction: they have a command structure at the top and a free market economy below. As members of the free market accumulate wealth and therefore power, the Communists can either cede power, or crush the upstarts. Which does anyone here think will happen?

I suspect that they will have some sort of revolution there and that will be that. In fact, if you were American and powerful, would it be out of the bounds of logic to CAUSE such a revolution there? It happened in Russia in the early 20th century (to prevent Russian econ development).

British and American elites are destined to rule the world.
[/quote]

I can’t even begin to speculate which direction it will go. What if Marx was right about communism eventually resulting in a spontaneous melting away of government?

[quote]jawara wrote:
LIFTICVSMAXIMVS wrote:
Free investment advice right here:

Learn Mandarin

Wurd. I thought they would have went to gold, silver or platium. Either way I knoew they would get out of the dollar because precious metals are actually worth somthing.[/quote]

Copper is really the smart choice. There is way more of it on the free market and they can quietly amass a s***load of it very quickly and quietly. Copper and other precious and semi-precious metals always do well in weak economies.

BG

[quote]Headhunter wrote:
I suspect that they will have some sort of revolution there and that will be that. In fact, if you were American and powerful, would it be out of the bounds of logic to CAUSE such a revolution there? It happened in Russia in the early 20th century (to prevent Russian econ development).

British and American elites are destined to rule the world.

[/quote]
Your mistake is the perception that democracy and free market must necessarily go hand in hand. We’ve only had a truly democratic system for about 50 years - it’s a very young political system to make such assumptions.

[quote]Abaddon wrote:
Headhunter wrote:
I suspect that they will have some sort of revolution there and that will be that. In fact, if you were American and powerful, would it be out of the bounds of logic to CAUSE such a revolution there? It happened in Russia in the early 20th century (to prevent Russian econ development).

British and American elites are destined to rule the world.

Your mistake is the perception that democracy and free market must necessarily go hand in hand. We’ve only had a truly democratic system for about 50 years - it’s a very young political system to make such assumptions.[/quote]

How does a free market thrive outside a constituted Republic?

[quote]katzenjammer wrote:
How does a free market thrive outside a constituted Republic? [/quote]

Pretty simple actually:

  1. their is either no government forcing coercive restriction onto business or

  2. the government that exists does not regulate business at all.

[quote]Abaddon wrote:
We’ve only had a truly democratic system for about 50 years - it’s a very young political system to make such assumptions.[/quote]

wait…what?
which country has a truly democratic system?