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Down And Out In Down Under

Tyler Durden's picture




 

For all the talk China's economic problems are getting (and yes, its official PMI came just slightly ahead of expectations on Saturday printing at 50.8 with consensus looking for 50.0: after all the Politburo can't give the impression of an out of control stall), the real action continues to unfold in its primary derivative economy, that of Australia, and particularly its "China-feeder" resource space, which is a far more accurate indicator of the true demand picture in China than manipulated data out of Beijing.  What is going on there, for those who have not been paying attention, is in one word, a disaster.

CLSA's Damien Kestel summarizes, "As noted in recent weeks it has been happy days for investors enjoying the highs on the S&P 500 and associated rallies across Germany, the UK, Japan and elsewhere. But that joy is a world away from the pain that has been inflicted on the majority of resource related equities and their investors. The AS39 Index on Bloomberg includes 87 mid and (now) small cap Australian resource companies. It has been smashed – just like many of its constituents. From early 2011 it has fallen >65% to now sit at GFC levels while there are plenty of examples of stocks that not so long ago had mkt caps of $800m that are now $50m. The evidence of pain in the resources space is everywhere but probably none more so than in Western Australia, the “engine room of Australia”.

Kestel goes on to compile a page of quotes from "conversations over the past week with friends and associates in the Perth mining game and it brought back memories of the Asian Crisis, Tech bust and of course the GFC."

  • “We’re seeing a much sharper contraction in the Australian economy than we’d anticipated four or five months ago”. Coffey MD, John Douglas. The engineering group has seen its shares, which traded above $4 in 2007, hit 10c last week.
     
  • “We’ve still got a lot of construction under way or committed and there’s a lot of activity that will go on for the next three years or so. I think where the question mark comes in my mind is, well, what will follow those projects?”. Western Australia’s Premier, Colin Barnett
     
  • “Perth has the highest population per capita of self made millionaires in the world”. Extract from a list of fun facts on Western Australia. I dare say there are a few less after the recent carnage in mining stocks.
     
  • The current feeling on St George’s Terrace (Perth’s main business street) amongst brokers and miners is that today is worse than the GFC ever was. It’s 100% pain out there” Perth mining investor
     
  • “I was at the Mines and Money conference in Hong Kong recently. They should really call it Mines and No-Money because no one has any and no one wants to give it to them” Mining CEO
     
  • “By 10am, the Fitness First gym in the city is packed full of brokers who’ve had a gutful of sitting at their desk doing nothing – salary cuts are starting and next it will be jobs” Perth broker
     
  • “Oh mate, the funding market is dead. You are now seeing a few deeply discounted rights issues for those that are reaching desperate levels ….. liquidity has completely disappeared” Perth broker
     
  • “Private equity firms are gearing up for a multi-billion-dollar push into the mining sector, with a wave of proposed asset sales by the big miners, a shortage of competing buyers and the funding headaches faced by smaller companies paving the way for a rise in deals”. The Australian

So, bargain-basement purchasing opportunity, or just the beginning of a secular shift and much more pain to come, as the China "paradigm" finally cracks?

 

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Sun, 06/02/2013 - 10:52 | 3618079 geminiRX
geminiRX's picture

I think this is bargain basement pricing....demand for resources will always be there. Reminds me of the call zerohedge made on BP during the gulf oil disaster. Anyone who bought BP at the time did nicely. 

Sun, 06/02/2013 - 10:54 | 3618088 kliguy38
kliguy38's picture

thank god someone of your stature brought that "breaking news" to our attention on this thread.....now get back in your mommies basement before she spanks you.

Sun, 06/02/2013 - 10:59 | 3618098 Herd Redirectio...
Herd Redirection Committee's picture

The superrich scooping up assets for pennies on the dollar.  Same as it ever was.  

I am not saying the US-China lovefest will continue, just that the world will find ways to grow again, if the current limiting factors are reduced.

One of the top things plaguing the world economy...  Is the excessive concentration of wealth.  On top of that, that wealth was for the most part acquired illegally.  But really, if you smuggle drugs, and then earn interest on that money, was the interest acquired legally? Any way, I postulate the wealth inequality of the 21st century is more stark than EVEN FEUDAL TIMES.

Sun, 06/02/2013 - 16:54 | 3618729 Dr Benway
Dr Benway's picture

You think this is "bargain basement pricing", gemini? Because they have the word "resources" in their name, and "resources" are good? Lol, great analysis. You should move to Australia and become a stock shill, you would fit right in.

 

First off, these companies don't actually produce any resources or profits, and never will. They exist by issuing shares at inflated prices to the gullible. Every couple of years insiders ramp the share price, and with stunning regularity this sucks in the next round of moron investors.

 

Secondly, as their share prices have plummeted, prices have become easier to control. These formerly-midcap-currently-penny-stocks are even more manipulated now than before, with prices thus certainly not in bargain basement territory, especially considering many of them having a true value of zero.

 

For more information about fraud in the Australian market:

http://s1144.photobucket.com/user/_DrBenway/library/?sort=6&page=1

Sun, 06/02/2013 - 11:24 | 3618142 JPM Hater001
JPM Hater001's picture

Meh- on our way back happening here in America but visit India or china and the disparity jumps by leaps and bounds.

And in feudal times 1 knights word was better than 6 peasants.

Now we have video...

Sun, 06/02/2013 - 11:46 | 3618169 aint no fortuna...
aint no fortunate son's picture

screw the penny stock miners in Perth - here's a (formerly) big US company with a lot of interests in Australia - Cliffs - symbol CLF - check out their 3 year chart:

http://stockcharts.com/h-sc/ui?s=CLF&p=D&yr=3&mn=0&dy=0&id=p94070729405

"...The company also operates two iron ore mines in eastern Canada that primarily provide iron ore to steel producers in Asia; and two iron ore mining complexes in Western Australia. In addition, it holds a 45% economic interest in a coking and thermal coal mine located in Queensland, Australia;"

Yah some of that is met coal problems in the US but a lot is China...

Sun, 06/02/2013 - 11:46 | 3618176 Herd Redirectio...
Herd Redirection Committee's picture

Its tough, who is poorer, an Indian who is debt-free living on $3 a day, or an American, with underwater mortgage, $44,000 in credit card debt, just lost their job, etc.  

But the point is, I am talking on the global scale.  There has never been a bigger gap between the avg. person and the megawealthy ($1 billion +)

Sun, 06/02/2013 - 12:25 | 3618240 GMadScientist
GMadScientist's picture

Start examining the right axes; is the American's high-stress environment better than the Indian's risk of say a Cholera outbreak and which has better access to the coping mechanisms to survive each?

You don't think there were "log scale" differences between Croesus and your average Lydian or Emperor/Pope/Duke what-his-name and the ones fighting the battles?

Something the megawealthy (all 400 of them LOL) should be thinking about... http://en.wikipedia.org/wiki/Gy%C3%B6rgy_D%C3%B3zsa

Sun, 06/02/2013 - 15:10 | 3618555 Herd Redirectio...
Herd Redirection Committee's picture

I honestly think if you compare the wealth of a peasant who owned 1 cow, 2 goats, and 5 chickens, to his medieval ruler, the current wealth disparity between peasants and lords would be greater.

Sun, 06/02/2013 - 15:35 | 3618592 mkkby
mkkby's picture

Then you should stop thinking because it hurts anyone in the vicinity. 

Even the poor in the US are richer than the 50% of the world living on less than $5 a day.  Compare someone on welfare to someone drinking filthy water and foraging in land fills.  Go live in India or Africa and report back.  Your perspective from watching TV makes this the fuck tard comment of the year.

Sun, 06/02/2013 - 15:42 | 3618608 greatbeard
greatbeard's picture

>> Even the poor in the US are richer than the 50% of the world living on less than $5 a day.

And that has what relevance to the issue of wealth disparity in the US?

Sun, 06/02/2013 - 18:27 | 3618879 Oldwood
Oldwood's picture

And why do you care what someone else has as long as you have what you need? Wealth disparity is a issue designed to divide. You cannot realistically compare someone of three hundred years ago with today. Most people were barely scatching an existence out and lived half as long as today, and few "owned" anything. While it is questionable what we "own" now days given taxation and debt, but I really don't think there is much comparison relative to idividual wealth. Now freedom, now thats a different discussion.

Sun, 06/02/2013 - 19:43 | 3619035 greatbeard
greatbeard's picture

>> And why do you care what someone else has as long as you have what you need?

It has to do with a level playing field and how the super wealthy got and maintain super weaalthy status.  I'm a  human equality kind of guy.  I'm supposing you're more of an Animal Farm type?  And who are you to judge what I need?  What do the super wealthy need? Our economy is hamstrung by the concentration of wealth and our governments hauling water for the greedy sons of bitches.

>> Now freedom, now thats a different discussion.

Are you so naive as to presume I, and folks like myself, have the same freedoms as the super wealthy.  I can tell you, we don't, and it's because of their mostly ill gotten gains that gives them freedom and takes mine. 

So now, off to carry water for your masters.

Sun, 06/02/2013 - 22:31 | 3619354 Buck Johnson
Buck Johnson's picture

I totally agree.  The smaller companies and financial houses there aren't able to compete with the downturn and so the mines will be taken by the bigger and more diverse companies.  Don't get me wrong, the bigger ones will have trouble also but what they will have is time on their side so when or if they have to liquidate to another they have assets.  Where the smaller ones can't. 

 

Also it will be worse than the feudal times, in fact I like to callit Neo-Feudal.  Where the rich will have more access to power and control and will get what they want and the rest of us will sell out mother out to get some droppings from their table.

Sun, 06/02/2013 - 11:02 | 3618104 geminiRX
geminiRX's picture

Words from a true hypocrite likely....

Sun, 06/02/2013 - 11:42 | 3618167 mick68
mick68's picture

I'm in Canada and we're the resource basin for the US. Same deal, Obama can spout all th rhetoric he likes about a recovery but we're taking the orders. And it's no different than the China/Aussie story. Anyone who says different doesn't know the facts or these days, is probably just another liar.

Sun, 06/02/2013 - 12:51 | 3618286 hardcleareye
hardcleareye's picture

So what exactly are you seeing for order changes?  What resource industry are you in?  It is hard to find data that has not be mulitpulated by TPTB or Lame stream Media....  I think that the Governement of Canada produces more "franken numbers" than the USA......

I have been expecting to see this "bleed" though, wonder when it will show up in the Globe and Mail etc...

Sun, 06/02/2013 - 14:59 | 3618534 kaiserhoff
kaiserhoff's picture

What idiot can down vote an honest request for information?

Now that we have a speech code like the rest of the parasite media, international communication is about all ZH has left to offer.  Hell, yes.  Details please.

Sun, 06/02/2013 - 16:03 | 3618639 Room 101
Room 101's picture

The reason for the down vote was the reference to "frankennumbers" which is of course a sexist slur against lesbians living in small cities of western Bulgaria. 

The term is probably a violation of the swiss politically correct and inoffensive speech code that we now have to operate under.  Tyler explained it a few weeks ago.  Something about the swiss getting so upset at ZH that they stopped counting their raubgold for a few minutes and told us how we need to talk nice about preferred social, religious, and ethnic groups. Or something like that...   

Sun, 06/02/2013 - 11:28 | 3618152 greatbeard
greatbeard's picture

>> Anyone who bought BP at the time did nicely.

 

Count this squashed gold bug as one who seriously considered doing just such a thing, should have, wished he had.  Problem is I'm a self made millionaire in the rear view mirror and one step away from homeless looking forward.

Sun, 06/02/2013 - 11:44 | 3618173 mick68
mick68's picture

Bought paper gold did you? Then you deserve your fate. If you own physical you've lost nothing. 

Sun, 06/02/2013 - 12:18 | 3618229 ElvisDog
ElvisDog's picture

Exactly. Gold (physical) is an insurance policy, a retirement and/or emergency fund if you will.

Sun, 06/02/2013 - 14:33 | 3618495 greatbeard
greatbeard's picture

>> Bought paper gold did you?

Speaking of things you know nothing of makes you look very foolish to those that have the knowledge. 

>> Then you deserve your fate.

You don't have any idea what my fate is so you certainly couldn't judge whether I deserve it or not.

>> If you own physical you've lost nothing.

Monitarily that's got to be one of the most idiotic positions I see spouted.  You wouldn't happed to know anyone buying physical for $1,900 per oz, would you?  Is your position that the folks who held Enron stock lost nothing?

You seem to be a mindless follower, mouthing the gold bug platitudes that TFMetals if rife with. 

Sun, 06/02/2013 - 10:54 | 3618090 Middle_Finger_Market
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Men not at work. 

Sun, 06/02/2013 - 11:27 | 3618149 AKrandy
AKrandy's picture

No wukkas mate.

Sun, 06/02/2013 - 13:18 | 3618345 Richard Chesler
Richard Chesler's picture

where women glow and men plunder.

Sun, 06/02/2013 - 16:29 | 3618686 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Damn they do glow down here. I've lived here six years after stints in Paris, NYC, and San Francisco, with side trips to places like Milan and Bangkok. They had a program here in the 1950's called "Beautiful Balts" where they encouraged people from Baltic nations (Finland etc) to move to Australia. You see them and their daughters in the supermarket, I can't decide which are more heart-stopping, the leggy 19-year old daughters, or the MILF-y Mom straight outta the fantasy book. Damn.

Sun, 06/02/2013 - 13:19 | 3618346 NoTTD
NoTTD's picture

Too right.

Sun, 06/02/2013 - 10:57 | 3618095 Dareconomics
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The lack of Chinese demand for Australia's natural resources is driving down the value of the Aussie.  You can add that dynamic to the anecdotes above.

 

http://dareconomics.wordpress.com/2013/06/01/around-the-globe-06-01-2013/

Sun, 06/02/2013 - 11:17 | 3618131 JOYFUL
JOYFUL's picture

That the lack of demand for Australian(or pretty much any other western commodity suppliers)natural resources can be attributed to a completed program of stockpiling - whereby the Chinese intend to be fully prepared for the Great Reset... wherein the six months or so following the complete collapse of the western ponzi scheme and attendant collapse of global demand have been correctly anticipated as a slack time - after which, being along with Rus and several resource-rich formerly 'third world' powers the last man standing....

the Chinks will forge ahead with the game plan which has already guaranteed their ascendance in the coming shift to a gold-based trade regimen which has been long predicted and anticipated by certain beyond-fringe blogistas but is apparently outside the ken of the collective brain trust of what purports to be the ...."alternative media" ....

important new signalling the arrive of which is 3.2.1 ....ooops...ZH hits the snooze button ... one more time!

Sun, 06/02/2013 - 11:27 | 3618145 earleflorida
earleflorida's picture

gosh,... your good reading JOYFUL

again, nice follow through...

thanks  :-))

Sun, 06/02/2013 - 11:27 | 3618148 disabledvet
disabledvet's picture

what the fuck are you talking about?

Sun, 06/02/2013 - 12:45 | 3618272 hardcleareye
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"There's just one thing Dude, do you have to use so many cuss words?"  The Stranger, Big Lebowski

Sun, 06/02/2013 - 12:55 | 3618292 Pure Evil
Pure Evil's picture

Gold based trade with China?

Who in their right mind is gonna want to trade their gold for the majority of crap coming out of China?

What do the Chinese have: adulterated and/or highly polluted food products, crap electronics, crap textiles, and other manufactured products that contain dangerous chemicals, i.e., lead in toys, toxic pet treats, etc., the list is endless.

If the Chinese had practically endless barrels of oil instead of cheap labor, then you'd have something to talk about.

Why do people seem to think China is gonna come out of this smelling like a rose.

China has a lot of internal political dissension and the Communists will be fighting tooth and nail to maintain control when the great reset happens. Why else are they hoarding except with the hope of placating their own internal populations.

I bet we see a new Chinese civil war before we see a new Chinese dragon rising.

Sun, 06/02/2013 - 13:28 | 3618367 Middle_Finger_Market
Middle_Finger_Market's picture

You missed the key phrase above: ''the Great Reset''. Not much will survive of the current fiat system, we are entering a world where commodities trade commodities. The Chinese produce all sorts of shit, but that eceonomy whether by chance or vision has propelled them into a world superpower capable of hoarding the large majorities of the worlds resources. Is this check mate...beware the yellow man. 

Sun, 06/02/2013 - 16:58 | 3618734 11b40
11b40's picture

No, he did not miss the point of the great reset.  No one knows if, when, or how any such reset is coming.  And if/when one happens, no one has a clue as to the outcome.  The Chinese better well stock pile, as they simply don't have enough natural resources within their borders to take care of their population, let alone save the world in a new melinnium.

Any great new reset is very likely to involve big-time protectionism as the workers of the Western world awaken and make their voices heard against the multi-national cartels that have been selling us all down the river for 4 decades.  Then see what hapens to the economic miracle of China.....

Their system is one of predatory mercantilism, and sooner or later, everyone else is going to get tired of.  It sure did not take Korea long to tire of Japan's QE.

Sun, 06/02/2013 - 20:27 | 3619111 laomei
laomei's picture

As I mentioned below, yep China's got resources, but it's kinda stupid to rush in and exploit them all when there are far better options on the table.  Many of those resources are untapped and undeclared.  China's got plenty of uranium, yet, China looks overseas to buy it up.  China's got some massive untapped oil fields, but there's absolutely zero reason in the world to tap them right now.  When you have tons of foreign capital sitting there, what the hell's the point of it?  When there are countries with oil that are sick of the US bullshit (wherein they sell oil for USD and then are compelled to dump said USD into US T-bills and piss it away on useless crap).  Nope, trade that oil for something far more valuable... actual, real, sustainable development that will help transition the economy away from reliance on oil.... a thing that the west NEVER wanted to happen.

 

Doubt me? Go talk with some of the few foreign China veterans in the industry here, not the ones sitting at a desk, but the ones in the field helping exploration of resources.  So much gets found all the time, and it's hushed up.  In the end all resources are property of the state and all major exploration concerns are state-owned, state-controlled, and that's that.  There's a lot of "peak" everything on the horizon in the not-so-distant future.  So what you do is stockpile and accumulate the foreign resources, while generally concealing the domestic (save that for later).  On the fringe parts of the country, yes, you announce those large finds, but insular? You shut the fuck up about it.  You don't declare it, you don't document it, you leave it entirely off the books and bury the area in red tape to keep it quiet.  This is what happens all the time.

 

Say for example, China goes fully declared and opts for full exploitation of domestic reserves.  China's energy needs are met in full and it'll be that way for a decent length of time. 

  • When there are shifts in energy policy/usage/strategy, you have a lot of fighting to do and interests to placate
  • You have to worry about all jobs from top to bottom
  • You have to worry about environment even more
  • You have to worry even more about energy prices
  • You derive no international benefit, you simply become a hermit kingdom that needs nothing from the outside
  • When resources start to REALLY matter, you're used up and at the whims of the rest of the world

It makes perfect sense if you bother to think about it, and when anyone (like me) tries to explain it, they can be dismissed with the sheets saying that said resources don't exist.  Even better, when China goes around buying up energy companies in the outside world, there's less scrutiny... the reaction is "poor china, obviously they are trying to secure what they need, they are so weak and have no energy".  When in reality, what China is doing is getting cheap energy and placing all the burden on foreign countries for it.   And in the meantime, you are making more nations RELIANT on China for their damned economy... which encourages greater opening up to China.

 

Sun, 06/02/2013 - 15:11 | 3618552 g speed
g speed's picture

you wouldn't trade gold for a GM chinee "Buick" ????  --er Cadillac that is???

Sun, 06/02/2013 - 15:49 | 3618612 mkkby
mkkby's picture

@pure evil -- who in their right mind will buy chink products?

You will, dumb ass.  All of us will.  In case you slept through the last 30 years, almost all manufacturing has been shifted there.  Yes, a lot of it is dishonest crap, but most isn't. 

They already won the future because we begged them to take most of our productive capacity.

Sun, 06/02/2013 - 19:55 | 3619049 laomei
laomei's picture

Said it before, saying it again.  China actually does manufacture some top-grade stuff.  Where the disparity comes into play is that factories only produce what is demanded of them by importers, and importers are greedy bastards who are looking for essentially free money.  There are countless products out there that you can buy wholesale for $5 which get a new brand name slapped on them, thrown into a pretty box, and presto, it's $100 plus tax.  Of course, then they press the factory to make it for less and less, while at the same time the actual cost is going up.  Corners get cut, and the importing nation ignores the fact that they are being scammed by the importer, nope, bitch at China.

 

This is why you are seeing such an influx of Chinese brands now.  That's where the money is, they can cut out the middleman, sell for a reasonable price and make quality that doesn't get bitched about.  Of course, this is taking money out of the pockets of the crooks, so they jack up the fear about Chinese manufacturing.  In the end, ya get what is paid for, not what you are paying for though.  There is TONS of great stuff here as long as you are able to pay for it

 

As for oil in China, there's more than they're willing to admit or announce.  There's no point, all it would do is deplete reserves faster.  The current game plan is to trade development for oil, development means new markets.  Simple as that really.  China learned this lesson long long long ago already.  Going too insular makes for bad relations and no power or say.  Same goes with non-perishable staple farming.  It's nice but pays shit, the weather is finiky, the harvest can be unreliable.  Go cash crop and trade for the unmet needs.  When there's a downturn in the economy, you only have to worry about factory orders, not the mines too and all the other labor involved.   Let that be someone else's worry... when it's their economy on the line, you'll suddenly find yourself surrounded with new friends who really don't want to see you fail.

 

And that's how you hedge your economy.. you don't try to take the whole pie, just the good parts.

Sun, 06/02/2013 - 11:43 | 3618170 joego1
joego1's picture

when you are feeding a billon people you have a lot of stock pilling to do.

Sun, 06/02/2013 - 13:01 | 3618314 macholatte
macholatte's picture

 

whereby the Chinese intend to be fully prepared for the Great Reset...

 

WWIII .... bloodless:

take over Oceania, just buy it

take over Africa, just buy it

take over a government, just buy it

 

 

The Capitalists will sell us the rope with which we will hang them.

Vladimir Lenin

 

Mon, 06/03/2013 - 08:10 | 3619822 PT
PT's picture

Re:  "The Capitalists will sell us the rope with which we will hang them."  So true.  Even blind Freddy can see it is happening right now. 

These days I also like to say, "Capitalism is two blokes holding knives at each other's throat and complaining, 'But I have my knife at the other guy's throat, why am I bleeding?'"

Sun, 06/02/2013 - 13:18 | 3618343 Totentänzerlied
Totentänzerlied's picture

You give the comMaonists too much credit. Can they print oil?

Sun, 06/02/2013 - 13:31 | 3618373 JOYFUL
JOYFUL's picture

Why bother printing oil when you can use that 2 trillion or so in Treasury paper to buy oil refiners and the fleet to send it home in?

4 cryin out loud: do people still have no idea just how much firepower the Chinese have to spend on offshore investment?

Sun, 06/02/2013 - 13:45 | 3618394 InvalidID
InvalidID's picture

 

 I think you're missing a key component here. Come the 'great reset' as it's being called, that 2 trillion in TBills will be worth less than the ink that printed it. Who the fuck will buy it if the dollars dead?

 

 As for real firepower... The Chinese might have some reserves but I would bet a years salery it's not nearly as much as we think/they say. Moreover, they'll be spending it to keep thier own country together if the global economy collapses. A billion angry, unemployed, hungery mother fuckers... That's gonna take some real 'firepower' to deal with.

Sun, 06/02/2013 - 15:55 | 3618625 mkkby
mkkby's picture

Well, I wouldn't want your miserable salery or even cellery.  The chinese people don't have many guns, and they will be slaughtered like insects if they revolt. 

Yes, china has a history of revolution, but those were battles of the elites jockeying for positions of power.  Try turning off the TV and learning something other than how well stars dance.

Sun, 06/02/2013 - 17:03 | 3618746 11b40
11b40's picture

You have no idea what ou are talking about.  There are violent protests in China virtually every week about one thing or another, and the government has great fear of a peasants revolt, or major factory strikes that spread.

Sun, 06/02/2013 - 17:52 | 3618812 InvalidID
InvalidID's picture

 

 First I'll start by saying yes, the Chinese do have guns, idiot. (Ok, the idiot wasn't called for just yet) They don't have many but rural people are allowed to own bolt action rifles and shotguns and the like. More important than that, there's a lot of guns manufactured in China and a pretty hot black market over there.

 Will the Chinese rise up in a violent burst to over throw the government? I doubt it. Protest in the streets? Maybe if they are hungry enough, but not likely in the near future. So how then could the Chinese peasant collapse the nation and over throw the regime?

 Same way we hear people talking of starving the beast here in the states. If people simply stopped doing what they were 'suppose' to do and worked outside the system China would be toast, same as any nation. Being as they have a strong black market already, and if there weren't any jobs because of a global meltdown... It's not that hard to add up, I'm sure even someones as cock sure as yourself can do it.

 It's likely China's answer to this would be war. They'd do the same as many nations before them and try to drum up some nationalist pride (Senkaku Islands.. hmmm Incursions into India... very interesting)

 Without a quick win this would deplete much of China's reserves, starve and anger the people, and piss of the folks in China that do have guns... The military...

 

 Even with small meaningless wins like the Senkaka reserves would be burned up for no real gain other than nationalist ferver, which would quickly die when hunger set in.

Sun, 06/02/2013 - 13:48 | 3618402 FeralSerf
FeralSerf's picture

America's been printing oil for some time now.  Their FRNs have been traded for plenty of oil.  If China can convince the world that the yuan is a suitable replacement for the USD as the world's reserve currency then, yes, they can print oil.

Sun, 06/02/2013 - 16:00 | 3618633 mkkby
mkkby's picture

Bingo! 

Yes, oil is printed.  However, one additional requirement is being able to protect your oil investment through military power.  The natives generally don't like being under the boot of kings and princes.

Sun, 06/02/2013 - 14:33 | 3618496 Creepy Lurker
Creepy Lurker's picture

So you think it will only be about 6 months? My big worry has been that the reset could go on for a long time..

Sun, 06/02/2013 - 16:01 | 3618636 mkkby
mkkby's picture

LOL, it's been 6 months away since 1971 or so, depending on who you ask.

Sun, 06/02/2013 - 12:52 | 3618287 caribbeanbarry
caribbeanbarry's picture

Last I was in Oz in 2001, the exchange was 2 Aud to 1 USD.  I was living the high life on my Fed Fiats.  I also know many Aussies that work aboard Super Yachts.  The last few years they have be bitchin about the weakness back in Oz of their USD demominated salaries.  It seems that may change soon forcing more Aussies to go off shore to earn a good living.  Sad, it's a wonderful country.  I also recently saw on ZH that for $5 million, you can get a provisional citizenship in Oz, so long as you invest the 5 mil in Oz.  I wonder what Simon Black thinks of this offer...

Sun, 06/02/2013 - 22:22 | 3619326 NidStyles
NidStyles's picture

They let that government take control of everything and disarm them, so of course they are all going to get screwed.

Sun, 06/02/2013 - 11:00 | 3618100 Tinky
Tinky's picture

One less shrimp on the barbie tonight, eh?

Sun, 06/02/2013 - 13:33 | 3618378 natty light
natty light's picture

North Dakota in a few years.

Sun, 06/02/2013 - 11:01 | 3618101 Gringo Viejo
Gringo Viejo's picture

So come on down mate

and we'll put some top ramen on the barbie for ya.

Sun, 06/02/2013 - 11:03 | 3618107 lj_nissen
lj_nissen's picture

"The mining business is capital intensive and extraordinarily cyclical." - Rick Rule

Sun, 06/02/2013 - 11:06 | 3618111 IridiumRebel
IridiumRebel's picture

"Crikey, mates! Today we are on a search for the wiley investor....let's see what we can flush out from the river beds"

Sun, 06/02/2013 - 11:09 | 3618117 Navymugsy
Navymugsy's picture

That was fucking hillarious! Is the crocodile hunter still dead?

Sun, 06/02/2013 - 11:12 | 3618119 IridiumRebel
IridiumRebel's picture

I thought no one would get it. I do believe Mr. Irwin is still dead.

DEATH BY STINGRAY

 

 

 

{cue heavy badass metal guitar riff}

 

Sun, 06/02/2013 - 12:30 | 3618250 GMadScientist
GMadScientist's picture

"We've found woily, and we've found investahs, but we just kant seem to foind any woily investahs."

Sun, 06/02/2013 - 11:07 | 3618114 Monedas
Monedas's picture

Ya mean Australobitch PM is not going forward with her 25% windfall profit tax on gold miners ?   LOL

Sun, 06/02/2013 - 11:09 | 3618118 Herd Redirectio...
Herd Redirection Committee's picture

Alternatively you could have referred to her as that Raging Ginger _______ (fill in the blank)

Sun, 06/02/2013 - 12:37 | 3618258 GMadScientist
GMadScientist's picture

Weasely

Sun, 06/02/2013 - 11:18 | 3618127 Temporalist
Temporalist's picture

This is missing something about the reality for people on the ground in Australia that everything is extremely expensive.  I expect a dramatic deflationary problem there which will subsequently (of course) be addressed by relaxed rates and QEazy money from bansktercrats. 

Unfortunately for them their own unemployment issue will get worse because immigrants are flooding in, from Europe (Ireland, Greece, Portugal) the Middle East and the Far East (which is where they are closest to).

 

The Per Capita Income of Perth is 4th highest in the world (last I heard; not just self made millionaires) but the same point is illustrated.

 

There is going to be another "Tax" on miners I'm sure which will fix everything.

 

Incidentally the housing bubble there only leaked a little air since 2006 and has remained inflated so it still looks dangerously close to popping.

 

The ridiculous construction explosion, for a small population, is a reminer of Dubai and their ongoing construction related financing issues. 

 

This all with the socialist government cherry on top (from a populace that extols individualism and self sustainability - quite the dichotomy) this can't go well.

 

Edit:  And I forgot to mention their young population cannot get enough of American Television and Celebrity as they watch all the most popular US shows there.  The "Consumer Sheep to the Slaugher" trend is alive and well in AU.  Muppets are born every minute.

Sun, 06/02/2013 - 11:19 | 3618135 Fred123
Fred123's picture

I suggest the good folks of Australia keep out the darker skinned peoples or your beautiful city of Perth will look like Detroit in 20 years.

Sun, 06/02/2013 - 11:31 | 3618157 Temporalist
Temporalist's picture

All you do is race bait you are pile of shit

Sun, 06/02/2013 - 11:41 | 3618166 Fred123
Fred123's picture

Pathetic reply son. Been to America lately? Specifically our once mighty industrial cities? How about France? England? Didn't think so. Take off your blinders sonny....

Sun, 06/02/2013 - 11:49 | 3618183 Temporalist
Temporalist's picture

You know far less than you think you do; typical of a douchebag tool like you. 

Sun, 06/02/2013 - 13:08 | 3618327 Buckaroo Banzai
Buckaroo Banzai's picture

Enlighten us, then.

Sun, 06/02/2013 - 13:34 | 3618383 Anusocracy
Anusocracy's picture

You are correct.

Crappy economic and cultural mindsets have no racial boundaries.

Sun, 06/02/2013 - 15:32 | 3618587 Fred123
Fred123's picture

Your reply shows exactly what you do know.

Sun, 06/02/2013 - 12:30 | 3618246 garypaul
garypaul's picture

Agreed about the decay in the cities, but do non-whites represent the cause or just a symptom? Anyway, great non-thinking on your part: just blame 'darkies'.

BTW.London was famous for it's poverty sections long before any dark people got there.

Sun, 06/02/2013 - 12:56 | 3618300 GMadScientist
GMadScientist's picture

Ssshh...if pikers like that National Front Cunt above ever understand it isn't powerless darkies they need to fear so much as the rats for which they are codependent lapdogs then they'll unleash that angst on "The City" like they should.

Sun, 06/02/2013 - 16:16 | 3618665 mkkby
mkkby's picture

There's no need to be racist, or to try to explain why one city or another has changed.  Simply CITE ONE EXAMPLE of a black society that has been successful and civil.

Anywhere in Africa?  Nope.  Any city or even neighborhood in the US.  No again.  Haiti, Puerto Rico??  No.

Are there any famous black scientists or engineers?

In western societies they have a free living and education.  Do they better themselves with all that free time?  Are they filling up libraries and cultural centers, starting businesses... or are they committing crimes and hurting others/themselves?

I don't hate anyone.  There are good people of every race.

Sun, 06/02/2013 - 22:31 | 3619352 NidStyles
NidStyles's picture

What you think Sumaria and Egypt were filled with nonexistant white people? You kids are so damn stupid these days.

There are actually a lot of famous Black Scientists and Engineers. This is what I mean, you children do not even know basic history that is available all over the internet.

 

 

Sun, 06/02/2013 - 15:33 | 3618588 TheMeatTrapper
TheMeatTrapper's picture

There is a difference between poverty and social fragmentation. In the Great Depression, people were dirt poor but they still attended church, sought work and valued self reliance. We were a nation of Europeans. Our idea of different cultures meant English, Irish, German, Italian, etc.

With the multiculturalization of America, our social mores, cultural values and self respect have disintegrated. There's a much bigger difference between Germans and Somali's than Germans and Irish. 

The parasites have infected the host to the point that there is no longer a difference between the descendents of Scoth Irish immigrants and those 200 years removed from living in the stone age. 

There is a reason why the Swedes have the most generous welfare, immigration and social safety net towards immigrants in the entire world, yet the "immigrants" they so generously attempted to save are now burning their cities down. 

The truth is not hidden, it's right out there in plain sight for those not in denial. 

 

Sun, 06/02/2013 - 22:32 | 3619357 NidStyles
NidStyles's picture

Welfarism is a part of Liberal ideology, which comes from Europe.

 

So uhh ya...

Sun, 06/02/2013 - 14:40 | 3618507 Freddie
Freddie's picture

Look at the history if Christian Lebanese versus Islamic Lebanese in Australia.  The Christians have been in OZ for over 100 + years and are good folks.  The Muslims showed up in less than the last 20 years and have been major trouble, crime, etc.   BTW_ Danny Thomas in the USA was Christian Lebanese and found St. Jude's Childrens Medical hospital.  They have helped tens of thousands of children.

Sun, 06/02/2013 - 17:37 | 3618787 August
August's picture

Freddie's concise history of the Australian Lebanese is 100% correct.

"Skin color" per se is irrelevant.  There are two categories you want to avoid importing:  the genetically sub-par, and the culturally hostile. 

Draw your own conclusions.

Sun, 06/02/2013 - 22:39 | 3619374 NidStyles
NidStyles's picture

Welfarism promotes the worst in society by ensuring it's survival to the next generation and even promotes it's expansion. It doesn't have to be a particular race/color/creeed to be the worst of a society. It just has to be the most detrimental and society destroying portion.

 

That is the danger of Liberalism, as it's end conclusion of Welfarism. What you are doing is called a red-herring, where as you are distracting from the real problem of Welfarism with the symptom of cultural conflict and anti-social behaviors.

Sun, 06/02/2013 - 15:34 | 3618591 Fred123
Fred123's picture

Take off your blinders boy.

Sun, 06/02/2013 - 13:23 | 3618355 Unpopular Truth
Unpopular Truth's picture

Detroit's issue is the handouts that created an entitlement attitude.

Sun, 06/02/2013 - 13:43 | 3618391 Anusocracy
Anusocracy's picture

Yes, and current so-called republican MI governor Snyder is trying to expand Medicaid coverage.

Sun, 06/02/2013 - 14:35 | 3618499 DosZap
DosZap's picture

Yes, and current so-called republican MI governor Snyder is trying to expand Medicaid coverage.

 

THAT's nothing, just go to Benefits.gov, and see what FREE gifts are going to be bestowed/are being on illegals now.Sickening, and all we hear is SS/MC will run out in xxxx.and xxxx.STOP giving OUR payed for benefits away to non citizens you dicks!.

Sun, 06/02/2013 - 14:31 | 3618488 DosZap
DosZap's picture

I suggest the good folks of Australia keep out the darker skinned peoples or your beautiful city of Perth will look like Detroit in 20 years.

 

 

The former PM of AU, had his stuff together on the Islamic demands for Sharia Law, and their requests to run their own affairs.Either live by OUR rules and laws, or we will deport your asses.Only smart leader left on that subject(look at Paris/Sweden/France/UK, all cesspools are going to be ISLAMISIZED, soon, and very soon.

Sun, 06/02/2013 - 22:41 | 3619384 NidStyles
NidStyles's picture

None of that would have happened had the Socialists not started feeding those people in the Middle-East for free. It encourages growth of failed societies, but Liberals are too ignorant to see the end results of their current actions, because of how pedantic/emotive and short sighted Liberalism as a Philosophy is.

Sun, 06/02/2013 - 12:16 | 3618225 Miffed Microbio...
Miffed Microbiologist's picture

We were in Sydney last Feb and was shocked at the prices. Place was absolutely booming however. Went to a department store to buy some clothes ( mr miffed lost his luggage) and I just had to ask the shopkeeper what the hell was going on. She said " oh, it's China...they want our minerals!" I was incredulous she seemed so blasé about the prices. She explained " oh we are putting up with that, its a necessary evil because this is a godsend for us. We were looking at a failure in our state pensions until all this happened. Now I'm secure that I'll have the money due me when I retire!" I figured there was no point in saying anything. Good luck lady.

Miffed;-)

Mon, 06/03/2013 - 00:21 | 3619573 PhilofOz
PhilofOz's picture

Prices can be bloody high for a lot of items but it goes hand in hand with wages..... my wife works as a cleaner for four hours on a Saturday getting over $37 an hour, on Sunday over $47 an hour. Then throw in the 9% superannuation her employer puts away for her on top of these hourly rates and 100% wage workcover protection for first year. Unbelievable! Four years ago she was happy with her wage equal to around $1.20 an hour in the Philippines while her friends still pay huge amounts to get into the USA to earn $7.50 an hour with no other benefits whatsoever. No wonder Oz is the destination of choice for the third world if they can get here. Worth the big gamble to take a leaking fishing boat from Sri Lanka I guess.

Sun, 06/02/2013 - 11:15 | 3618130 q99x2
q99x2's picture

The United States of America is not collapsing. The bankster take over version of corporate facism in the United States of America is failing.

The States must take back the Federal Government and prosecute the traitors and take over the banking and oil cartels.

Long live the revolution. Military leaders invited to lead.

Sun, 06/02/2013 - 11:33 | 3618158 Suisse
Suisse's picture

No, I'm pretty sure it's collapsing. Been to most cities lately? 

Sun, 06/02/2013 - 13:26 | 3618361 NoTTD
NoTTD's picture

Most of us don't live in the cities, most of which, particularly in the north, are losing population.

Sun, 06/02/2013 - 18:50 | 3618923 Almost Solvent
Almost Solvent's picture

Yes, Dallas, Houston, Miami, Atlanta, etc. All looking good. You must be a northerner carpetbagger fuck.

Sun, 06/02/2013 - 22:53 | 3619411 NidStyles
NidStyles's picture

You mean the heavens of Liberal Utopia? Yeah think about that for a minute. ;-)

Sun, 06/02/2013 - 11:17 | 3618132 Fred123
Fred123's picture

Don't worry, China has a history of recovering from economic downturns followed by an economic boom of 20-30 years.....hmmmmm that wasn't China was it?  ......China usually has a revolution followed by killing millions of their own people and squashing economic activity for decades......China is so screwed.

Sun, 06/02/2013 - 11:30 | 3618156 earleflorida
earleflorida's picture

other than Mao... china has carried itself quite admirably

Note: your history is sadly lacking accuracies

Sun, 06/02/2013 - 11:38 | 3618162 Fred123
Fred123's picture

Note: Actually my history is very accurate.

I suggest you read about history rather than the social rubbish you have been taught. It's obvious from your post that you are not yet 50. Such an amazing difference in education standards in the last 40 years makes it easy to spot the youngsters.

Sun, 06/02/2013 - 13:03 | 3618317 GMadScientist
GMadScientist's picture

Then tell us something useful about the state of China prior to the arrival of your oh so prententious, if not entirely efficacious, educational standards, dear Limey.

Tell us how they turned away your ambassador because your pathetic industry provided nothing they needed before you did what you always do and returned with gunships (just like you did to those upstart Americans when they endangered your monopolies).

Such an amazing difference in relevant details makes it easy to spot the propagandists.

Sun, 06/02/2013 - 13:25 | 3618359 Totentänzerlied
Totentänzerlied's picture

If you asked them, they'd have said there is nothing they need that they don't already have - because anything the Middle Kingdom lacks cannot be worth having, anyway. The degree of insularity and myopia was (and is)... infinite.

4000 years this insanity has been going on.

Sun, 06/02/2013 - 11:20 | 3618137 short screwed
short screwed's picture

 Economic fundamentals are so passe.  Australian central bank just needs to flood the economy with more paper prosperity.  That will fix everything.

Sun, 06/02/2013 - 11:30 | 3618155 disabledvet
disabledvet's picture

http://theage.drive.com.au/demise-of-ford-leaves-nations-car-industry-in... see ya' later australia. good luck. i've seen that plant in Taiwan..."they made they're deal before you did."

Sun, 06/02/2013 - 13:32 | 3618376 NoTTD
NoTTD's picture

It's not reassuring that the only thing Labor can think of is larger government subsidies.

Sun, 06/02/2013 - 11:57 | 3618196 Haager
Haager's picture

Bargain, but not really basement. If you're in Euro-dreamland you may consider to put your savings in Australian stocks, and then don't look at it the next 6 month. I think $audeur has bottomed, China will pull itself out of any problems during the next 2 decades, just because they still have options left - contrary to US, Japan, Europe.

With their economical ally situation doesn't look that bad at al in the short term, and with some support in the fx-crosspair your investment may still gain even if stockprices will have some fluctuations.

Sun, 06/02/2013 - 12:07 | 3618210 Jason T
Jason T's picture

sounds awfully deflationary.. yet interest rates are rising.. this is interesting

Sun, 06/02/2013 - 12:23 | 3618215 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Off topic but looks like China found a solution to it's pig problem. This should guarantee no more pig carcasses floating in the rivers there.

http://www.reuters.com/article/2013/05/31/us-smithfield-shuanghui-dealta...

 

Washington may still be digesting news of China Inc's latest bold move into America with the nearly $5 billion takeover of Smithfield Foods Inc (SFD.N), but early indications are the deal will not inflame enough nationalistic opposition to kill it, and success could pave the way for more Chinese purchases.

 

Shuanghui International Holdings' agreement to buy Smithfield would be the largest ever acquisition of a U.S. company by a Chinese one. The bid - an effort to feed a growing Chinese appetite for U.S. pork (cough bullshit cough) - has stirred some concern among U.S. politicians and will face review by a Treasury committee.

Yes a review by the same unbiased Treasury Committee that under Turbo Tax Timmay Geithner allowed the Chinese to do this.

Keep in mind this happened back in 2011 but certainly is relevant here and for the Treasury bond market in general today. We don't know what the Chinese are buying here on ground level unless you are part of the insider information network so weak bond auctions may not mean weak bonds since the Chinese are not bidding directly and probably is part of the game on the rigging of the interest rates by allowing a major buyer to purchase in the shadows and not be reflected in the information the FED projects concerning bonds. Think about it and how it potentially relates to QE either increasing or tapering and who knows who else has this same arrangement with the Treasury and is not showing what they are buying in the official auctions through the primary dealers.

http://finance.yahoo.com/blogs/daily-ticker/geithner-thinking-treasury-g...

 

In an unprecedented move, in June 2011 the U.S. Treasury Department granted the Chinese government direct-bidder status to purchase U.S. Treasuries direct from the U.S. government, reports Reuters. All other central banks must purchase U.S. Treasuries through primary dealers on Wall Street, which then place bids on their behalf at Treasury auctions.

The People's Bank of China holds roughly $1.2 trillion in U.S. debt, more than any other entity, and it is now the first foreign government with direct computer access to the U.S. government Treasury auction process. China, however, must sell U.S. Treasuries on the open market.

"It's a big deal because the Chinese are getting very special treatment," says Gordon Chang, Forbes columnist and author of the Coming Collapse of China, in an email to The Daily Ticker.

This special treatment does have the potential to save the Chinese government money, but not in transaction and commission costs because primary dealers are prohibited from charging its bidding customers fees. However, China could getting a better deal by keeping its purchases from Wall Street secret.  - But we all know about how tight the lips are at the FED with their reports.

 

Yeah like the Treasury is going to be unbiased in their review phuleaaaaseeeee.

 

Sun, 06/02/2013 - 16:39 | 3618702 falak pema
falak pema's picture

hey michael I thought you had an existential problem, I now realise it was just a question of avatar change.

Appearances are so important in this world.

Unless Mike is not the Mike of old I'm being bold so I'm told when I bike to avoid running in my running shoes  which are not Nike; as I point my pen torch where its not bright; am I rite or am I rong when I ring the gong, bong bong.

Sun, 06/02/2013 - 19:09 | 3618962 Manipuflation
Manipuflation's picture

So you two are in a first name calling relationship?

Sun, 06/02/2013 - 20:23 | 3619103 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Must have me confused with someone else who used this name. It is a well these days an obscure pop culture reference to the Three Stooges.

Sun, 06/02/2013 - 23:11 | 3619445 NidStyles
NidStyles's picture

Soo many noobs here. Michael used to be the screen name with that particular avatar. He hasn't been around in like 7 months.

Sun, 06/02/2013 - 20:21 | 3619098 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I don't know who you are referring to but I am not Mike. Maybe a former poster used this name? Seriously I'm not pulling your chain either.

Sun, 06/02/2013 - 12:11 | 3618219 Caput Lupinum
Caput Lupinum's picture

A dingo ate my portfolio....

Sun, 06/02/2013 - 12:15 | 3618222 criticalreason
criticalreason's picture

and this report side by side with a peak resources thread.....is it really true that just as we are about to run out of commodites and with high commodity inflation, one of the biggest commodity producers is suffering more than anyone?

Sun, 06/02/2013 - 13:17 | 3618319 Peter Pan
Peter Pan's picture

Australia has no doubt been a lucky country because her reources have made up for the lack of vision shown by her politicans.

Iron ore which is baically just another kind of dirt is still selling for over$100 per tonne but no one knows for how long given the uncertainty about China and the new sources coming on stream in Africa. And let us not forget Brazil's Vale.

On top of all this let us not forget that wage levels in the mining sector have become very rich and are a further drag on competiteveness.

Many projects are being shelved and many overseas LNG projects are coming on stream which will impact pricing negatively.

On September 14th it looks like the government will be soundly thrashed and rightly so following consecutive deficits now headed for well over 300 billion after splurging on non productive expenditure to build school halls to avoid the GFC correction as well as stuffing rooves with insulation that then had to be removed, not to mention causing about 100 deaths and many houses to burn down due to shoddy workmanship. The idiotic minister was rewarded with another portfolio.

The biggest pain is reserved for workers and the average man's pay packet. The mining boom has contributed to around 50% of pay increases over the last decade and this has made Australia uncompetitive as evidenced by scores of manufactuers either closing down or shifting to Asia.

The recent falll in the dollar is too little and too late and with the exception of fleeing Chinese hot money seeking a refuge outside China, it appears that real estate which is Australa's biggest sport on and off TV is destined for a correction even though itis still posting some dangerously optimistic gains thanks to lowered interest rates and Asian buyers.

Like I said, lucky country but stupid politicians who have been happy to see the ground being scooped and sent to China but very little by way of value added projects for creating non-dependancy on China as well as creating longer term skilled employment.

Hopefully if the dollar slumps it might give a reprieve of sorts although imported inflation will create problems.

Yes, a lucky country which has perhaps been too lucky for its own good.

Sun, 06/02/2013 - 17:08 | 3618751 Bazza McKenzie
Bazza McKenzie's picture

For the benefit of US readers you might have noted that the catastrophic government which will be destroyed in September is a Labor Party government, which is rougly equivalent to the Democrats in the US, lead by a woman, and is unarguably the worst government Australia has had in living memory.

Sun, 06/02/2013 - 20:16 | 3619081 thestarl
thestarl's picture

Government debt to GDP is amongst the lowest in the world,average growth 2 to 3% as with inflation,AUD above parity with USD over 1.5 trillion in retirement savings a decent education and health system.

I think you spend to much time reading the Murdoch press Bazza.

Sun, 06/02/2013 - 23:16 | 3619457 NidStyles
NidStyles's picture

Except the policies of the government are being upheld by the strong mining industry and heavy taxation.

 

Sun, 06/02/2013 - 13:21 | 3618333 Poofter Priest
Poofter Priest's picture

 

Dig this,

Some soverign nation that is sitting on a lot of money decides to stock pile certain resources. Like months and months worth.

Meanwhile they claim high productivity to justify the stockpiling (although it may be noticed that energy usage is quite low) as to hide the stock piling.

Then....[they] quit buying and run off their stock piles.

Prices crash, shares plummet for the producers.

[They] then step in and buy up the producers on the cheap, just about the time their stock piles are almost exhausted.

Just like Micky D's.....'billions served'. LOL

Would would have thought....?

Sun, 06/02/2013 - 13:30 | 3618369 Totentänzerlied
Totentänzerlied's picture

It would the first time in history a centrally planned economy successfully pulled off anything larger than a dinner party.

Sun, 06/02/2013 - 14:27 | 3618484 Poofter Priest
Poofter Priest's picture

Oh I don't know about that. The central banks have been rather successful in some of their endeavors so far.

We might think they have screwed up, but then we are measuring them by a different yard stick than what they are using.

Sun, 06/02/2013 - 18:47 | 3618917 mkkby
mkkby's picture

Well, that particular economy, centrally planned or not, has taken over most of the world's manufacturing capacity.  I'd say that moves them to the head of your dinner table.  The western world is bowing down to them now.

Ponder this, chimp brain -- how does the world look in 30 years when the US is no longer is able to fund a trillion dollar military?

Sun, 06/02/2013 - 13:44 | 3618390 NoTTD
NoTTD's picture

Joke which went around when the Soviets began buying wheat from the US:

Functionary: Why is the glorious USSR buying wheat from the running dogs of the US?

Kruschev:  We will order all the wheat they can provide, which will cause the price to rise so they produce more and more wheat and the price will go ever higher.  Soon it will become so profitable to grow wheat that they will devote more and more of their land to it, finally their capitalist greed will cause them to tear down their factories, rip up their roads, to plant more.  At last, the entire country will be one huge wheat field.

F: And then?

K: Then we cancel the order. 

Sun, 06/02/2013 - 17:17 | 3618763 11b40
11b40's picture

When China quits buying and runs off their stockpiles, economies crash, killing demand for the products they build from those stockpiles...then, their economy crashes.

Or, China buys mines in Australia So. America, Africa...and later foreign governments decide to nationalize, if they don't prohibit the sales outright in advance.

The tango is a complicated dance.

Sun, 06/02/2013 - 13:16 | 3618339 Peter Pan
Peter Pan's picture

By the way, let me add that even hamburger flippers earn $17.63 an hour in Sydney plus superannuation, plus 4 weeks holiday, plus long service leave, public holidays etc.

Lest you become envious, let me inform you that rental on a 2 bedroom unit in the eastern areas of Sydney cannot be found for under $450 per week.

Sun, 06/02/2013 - 13:35 | 3618384 timbo_em
timbo_em's picture

Maybe just like the US has found a way to recreate a housing boom without using too much lumber, China has found a way to tun its economy without using raw materials and energy?

Sun, 06/02/2013 - 14:19 | 3618461 mickeyman
mickeyman's picture

Does GFC = Great Fucking Collapse?

Sun, 06/02/2013 - 14:26 | 3618482 pauhana
pauhana's picture

I'm having a hard time reconciling this article with the one two down from it on peak gold - the rise of commodity prices that will bankrupt us all.  So which is it?

Sun, 06/02/2013 - 15:00 | 3618525 adeptish
adeptish's picture

Deleted

Sun, 06/02/2013 - 14:54 | 3618527 Yen Cross
Yen Cross's picture

      Investors aren't piling out of the Australian 2 year and 10 year bonds. The 10 year is no where near the March 2013 highs. I think the aud/usd trade is due for a short squeeze. Lot's of news out of Australia later today. Lots of news out of China and Australia this week. One way or another, we'll find out the direction of that trade this week.

    http://www.investing.com/rates-bonds/australia-2-year-bond-yield

    http://www.investing.com/rates-bonds/australia-10-year-bond-yield

 

Sun, 06/02/2013 - 17:10 | 3618753 Cycling Fish
Cycling Fish's picture

THank God the "mining boom" is dead! The high Aussie dollar has been killing manufacturing companies and East Coast jobs for years.

If we can get the Aussie back around 70  - 80 US cents our manufacturing sector will expand and soak up unemployment.

 

Sun, 06/02/2013 - 18:02 | 3618831 InanimateCarbonRod
InanimateCarbonRod's picture

There is an obvious disconnect between resource/commodity economies (ahem Canada/Australia) and the performance of companies that are dependant on those areas (hello bank and finance!).  Otherwise, how else would one explain the runup in local financial service companies in the respective countries in spite of the fact that they are all reporting significant slowdowns in capital market revenues, M&A activity etc.?

How else to explain the +17x multiple on stocks like MQG:ASX or RY;TSX?

Anyone want to buy a vowel?

M _  N _ P _ L _ T_ _ N.

Sun, 06/02/2013 - 19:55 | 3619048 thestarl
thestarl's picture

Some time in the not to distant future a gereration of Ozzies are going to learn all about the Dutch Disease....parties over.

Wed, 06/12/2013 - 20:40 | 3652251 mallymcl
mallymcl's picture

I am chasing a very good little article I read that was pretty much saying... during resources booms how many small cap companies with no idea go around, get money of people who have no idea, achieve nothing etc and ultimately at the end of these booms you are left with the very small % of companies who have achieved something.

It was quite bearish/pessimistic but there was a lot of truth to it also. Anyone?

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