Gold Forecaster
- Global Watch
China, now the world's
largest Investor
Julian D.W.
Phillips
Gold Forecaster snippet
Mar 21, 2007
- Below is a snippet from the
latest weekly issue from www.GoldForecaster.com
This report is written in the
light of an overlooked conclusion on the objectives of China.
China realizes that it is an emerging giant. It realizes
it has the capacity to outperform the developed world in manufacturing
of all kinds [by following a path similar to Japan and other
Asian nation - but on a far greater scale]. It is not China's
intention to sit in the shadow of the U.S. or Europe, but to
become the dominant global player, with its extremely low cost
manufacturing cost structure. The Chinese government wants
China to be number one in the world and not just in manufacturing,
but in designing a new government relationship to its economy,
far removed from the structure used by either the U.S. or Europe.
As such it will comply with the world's requests for change
if it suits China's future. Such compliance will lessen as
it grows to be indisputably the driver of the world's economy.
It will do whatever it takes to access the resources with which
to secure such a future, without asking anything of the nations
with whom it contracts. It is naïve to think that China
is likely to kowtow to the developed world. Because of these
aims gold & silver has a place in the globe's monetary system.
China's impact on
the rest of us.
The trip of Treasury
Secretary Hank Paulson to China highlighted one of the reasons
why we are so positive on the long-term future of gold. Generally
the perception of China in the developed world is that it is
an up and coming emerging [giant] economy that will move in the
same direction as all other now-developed economies that were
formerly emerging nations. It is fully expected that China will
adopt the same economic shape as these nations too. To us
in the face of the facts coming out of China, this is at best
arrogant.
China's future economy, its
banking system, foreign exchange rate policies, reserve policies
and its overall economic and political objectives are of paramount
importance to all other nations and markets. To misunderstand
or to underestimate the Chinese government would be the greatest
mistake all of us could make in terms of our future investments.
With China now setting up a hugely funded agency for investments
[$200 billion of a potential 1 trillion and rising at the rate
of $250 billion a year] their policies will affect us all dramatically.
Mr Jin said the new agency would report to the State Council,
China's cabinet, and not the finance ministry, confirming our
understanding that the reins of power rest solidly in the hands
of the government.
And where next? Look at Toyota's
performance in the U.S. Just wait until China gets the hang
of exporting cars [they've got to get quality right first].
China overtook U.S. passenger car output for the first time
last year. Chinese production was tabulated at 5.2m autos and
the U.S. output at 4.4m autos. As late as 1997, Chinese production
was only about 5% of U.S. output.
The rest of this report looks
at "The world's biggest Investment fund" - "What
China wants China gets" - "U.S. Bankers to structure
Chinese Banking?" - "Central Bank Gold Sales"
- Plus many other items as well as a finger on the pulses
approach to Gold Silver and Platinum markets and shares.
Buy on the falls
The markets on all
fronts are looking as though they are nearing their low points.
So what does one do? We have been recommending that one should
"buy the dips" constantly. However, at the moment
the market could go sideways for a while longer and may even
attack the lows recently seen.
At Gold and Silver Forecaster
we would recommend that a very good policy in a market
such as these, where we continue to be certain of future rises,
but would like to get the lowest entry point possible, is to
buy on those days that fear rises and prices fall in an atmosphere
of looming catastrophe so we follow a policy of "Buy
on the falls". It is sometimes nerve racking to
do so, so one must be certain, but in such markets one often
finds the dealers don't have that much stock themselves, sell
it to you and then mark the price up. The dealers are vulnerable
at this point and don't want to hold stock on their books.
If one wants to buy quantity, one has to do this for as long
as doubts sit in a consolidation area.
But be certain of the level of liquidity of the share you are
buying into and adjust your dealing accordingly. We wish
you every success!
Please subscribe to www.GoldForecaster.com
for the entire report.
Mar 21, 2007
-Julian
D.W. Phillips
email: gold-authenticmoney@iafrica.com
321gold Ltd
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