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 TRADE.com 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

Coronavirus-stocks-bear-market-2020-analysis

U.S. Dollar Woes Boost China's Global Resource Investments

Commodities / China Economy Oct 15, 2009 - 08:34 AM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticleKeith Fitz-Gerald writes: Washington continues to believe that the U.S. dollar is a weapon and most of the G8 is playing along. They simply can’t see – or won’t acknowledge – where the dollar is actually headed, even though the evidence is right before their eyes.


On the other side of the world, however, China is refusing to drink the U.S. Kool-Aid. It sees what’s really happening with the greenback, and understands the implications for its own finances and economic growth.

That’s why Beijing has taken matters into its own hands.

As Beijing breaks with the West, Western investors need to take notice – China is now a serious player on the global financial stage. It’s only going to grow in power and stature.

And it has a powerful hand to play.

Wheeling and Dealing

Not only does the Red Dragon have a $2.3 trillion cache of reserves to work with, it also has the world’s most powerful growth engine: An economy that’s advancing at an 8% clip, 1.3 billion consumers who save an average of 35% of their incomes, and a government that’s spending money in an effort to propel them into the 21st century.

What makes this especially poignant is that China understands its role – past, present and future. Most of its leaders are exceptionally well versed in Western history, meaning there’s a profound understanding of the problems and potential obstacles the West faces as it attempts to bounce back from the worst financial crisis since the Great Depression. There’s an irony here, since China may understand our problems even better than we do.

China’s outlook and economic fate is no longer totally dependent on the United States and other Western counterparts. China knows that it has to take matters into its own hands if it is to avoid being dragged down and smothered by Western has-beens.
Beijing is doing just that.

What’s more, China’s leaders are taking a whole host of steps that will affect basically every asset class on the planet for years to come.
Some of these moves are subtle on their face, but will have a broad and lasting impact that investors need to see and understand. Others are as shrewd as they are aggressive. For instance, China is actively diversifying its dollar risk by buying up hard assets – including oil, gold and all sorts of other commodities – as part of a global shopping spree that’s unparalleled in recent memory.

As part of his global game of let’s make a deal, China is reaching pacts with resource-rich despots around the world – not because Beijing likes dealing with these people, but rather because China has little choice given is massive population, zooming growth and the neutered status of the Western financial system.

Sheer size isn’t China’s only objective: It also wants to join the “adults’ table” that seats the current global financial leaders. To achieve this status, however, Beijing knows it needs to have a credible currency. Instead of waiting for the international currency exchange community (read that to mean the self-centered currency traders in New York and London) to integrate the yuan into major trading pairs, China’s leadership has been establishing yuan-based swap agreements with nations around the world. In doing so, Beijing has completely bypassed the international system now in place.

China has simultaneously been working – albeit quietly – with other groups having similar vested interests to ensure alternative financing methods, whether the U.S. cottons to Beijing or not. I’ve been predicting this for years, which is why I wasn’t entirely surprised when reports surfaced earlier this month about the Organization of the Petroleum Exporting Countries (OPEC) and the so-called “BRIC” nations (Brazil, Russia, India and China) shifting to an international currency basket and gold to replace the use of U.S. dollars in the pricing of oil contracts.  While this was quickly denied by some of the OPEC nations, their comments made it clear that they were talking about "convenience."

I could go on but I think you get the picture: The global guard is changing. Whether we like it or not is irrelevant. It’s going to happen, so as investors we need to look for the profit opportunities that will assuredly come our way.

As history demonstrates, these guard-changing shifts are major profit opportunities – and are not to be missed.

Profit Lessons of the Past

As was the case when France’s hegemony was usurped by England’s – and then England’s by United States – there are major profits to be had. To be clear, I’m not calling for the total demise of the U.S. way of life, or a complete abandonment of U.S. assets on the global financial stage. Any such notion would be foolish in today’s interconnected world. The real issue for most U.S. investors is that they need to bring their holding into line with what the changing of the guard implies…and increasing proportion of global choices.

Most investors remain dramatically underexposed to the new realities of global investing. They may have only 15%  – or less – of their portfolios invested in internationally focused investments. At a time when U.S. equities make up less than 25% of the world’s total stock-market capitalization – and when nearly 75% of global economic activity is place beyond U.S. borders – that’s a serious miscue for an investor to make.
What you really want to do is to go with the flow, and recognize the changing of the guard for what it actually is – a new source of wealth.

[Editor's Note: Pure and simple,China represents the wealth-building opportunity of a lifetime. When it comes to China investments, Money Morning Investment Director Keith Fitz-Gerald is the dean. He's lived and worked and lived in Asia for two decades - including numerous sojourns into China, where he's seen how market-focused changes are creating fortunes for the entrepreneurs who are making everything happen.

As the editor of The New China Trader service, Fitz-Gerald can now make those market insights available to you. Fitz-Gerald has not only chronicled the many changes that have taken place in China over the past several years - in many cases, he's actually predicted them.
Subscribing to The New China Trader is akin to hiring a guide to help you navigate, and profit from, a market that's perhaps the most complex in the world – but that also promises to be the most profitable for decades to come.

So if you've been looking for a way to invest in China for the first time - or you've been investing there, but aren't satisfied with your results - now may be the time to act. For more information on how to sign up for Fitz-Gerald's latest on-the-ground research, please click here.]

©2009 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - 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