Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter


China Wealth Expansion Driving Agri-Food's Mega-trend

Commodities / Agricultural Commodities Sep 21, 2009 - 04:09 PM GMT

By: Ned_W_Schmidt


Best Financial Markets Analysis ArticleBump and grind economic numbers might suggest that the Western economies, including the U.S., have seen the worst of the economic slide. Despite that appearance of an economic bottom, that the economic policies of the Obama Regime are a failure, and will continue to be a failure, is now increasingly obvious. When nations like China and India are demonstrating superior economic performance perhaps the time has come to either, one, jettison the bumbling economic policies of the Obama Regime, or, two, look elsewhere for opportunities.

Western economies made two attempts at economic witchcraft, the internet/technology stock bubble and then the housing/mortgage bubble. Both of these attempts at financial free lunches failed miserably. Neither was grounded in either sound business fundamentals or reasonable financial concepts. Both were get rich quick schemes, encouraged by the inbred economics community incapable of thought beyond a power point lecture.

The reason that the economic policies of the Obama Regime will continue to be failures is that economic growth, of an organic and sustaining kind, are either discouraged or not encouraged. Simply throwing money obtained by selling debt into the wind will not encourage sustainable economic growth. In contrast, China has encouraged the expansion of wealth, resulting in economic growth. One model, China, works, while the other does not.

Name a product that has experienced almost 250% growth in demand in the last five years of available data. In our first chart this week is plotted per capita consumption of milk by rural dwellers in China. By the way, rural inhabitants are slightly more than half the population. Urban consumption of milk in China, on a per capita basis, has been flat for the past few years. However, that comes after a tripling of per capita consumption in the cities. U.S. consumption of milk is five times that of Chinese urban dwellers, and their consumption is five times that of rural consumers. The potential for growth in Chinese milk consumption alone makes social networking web sites look like stagnant pools.

While some investors still seem to be chasing those dead cats bouncing in the form of banking and housing stocks, companies linked to the growth, today’s and tomorrow’s, in China seem to be doing well. Our second chart, above, is the year to date performance of a selection of Agri-Food stocks.  While this appreciation might be over done in the short run, those companies tied to the China of tomorrow have done nicely. Some might be appropriate for investors looking forward rather than backwards, or simply dreaming of yet undelivered change.

As the world turns toward serving China today, and India tomorrow, the world’s economic system is being “rewired” to accommodate the needs of those customers. While frivolous economic policies flow out of Washington, D.C., some investors not waiting for real change there. They are now making first round moves for tomorrow. Can you name two green grass investments of $200 million, or more, being made in the U.S.?

Well, one of those is the first grain export terminal to be built in the U.S. in more than twenty years, per Commodity News for Tomorrow, 18 September 2009. At present and in the past, grain from the upper Midwestern U.S. would flow south to New Orleans for export shipment. In 2011 when the terminal is completed, the grain will flow west by rail to the port, and then further westward to satisfy Chinese and Asian demand, Per that article,

“Grain exports rose 20% to reach a record 6.4 million metric tons at the Port of Seattle in 2008. For comparison, U.S. Department of Agriculture said exports of U.S. corn, wheat, and soybeans rose only 10% in 2008.(5)”

Name something that grew 10% or 20% in the U.S. in 2008. Yes, foreclosures and bad loans did. We really mean something worthwhile and desirable. And by the way, when those grains are flowing westward, what will be flowing eastward? The answer is simple: Money! The builders of this terminal are Bunge North America, ITOCHU and STX Pan Ocean.

Yes, we know that the wonderful move in the price of Gold over the past few weeks is making you feel wealthier, and clearly smarter than many investors. Over the past ten years your return on Gold has far exceeded that earned by those that turned their wealth over to the Street. But, you need to keep looking forward. Agri-Food investments may be today where Gold was ten years ago. Why not let 1.3 billion Chinese consumers work for you? To begin your research use this link:

We are also pleased to announce that 3rd Annual U.S. Agricultural Land As An Investment Portfolio Consideration, 2009 was recently released. This work is the definitive annual study of the role of U.S. agricultural land in an investment portfolio. It is a rigorous statistical analysis suitable for the sophisticated investor. The 60  page PDF file is delivered via email, and is available at the following link:

By Ned W Schmidt CFA, CEBS

AGRI-FOOD THOUGHTS is from Ned W. Schmidt,CFA,CEBS, publisher of The Agri-Food Value View , a monthly exploration of the Agri-Food grand cycle being created by China, India, and Eco-energy. To receive the most recent issue of this publication, use this link:

Copyright © 2009 Ned W. Schmidt - All Rights Reserved

Ned W Schmidt Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules