Saturday, April 30, 2011

Anara Tower, Dubai


Also, check out this amazing bridge being built in Dubai:

Wednesday, April 27, 2011

Monday, April 25, 2011

Barrick shall not live by gold alone

The largest gold mining compan in the world, Barrick Gold, has suddenly taken a shine to copper. Here are some relevant quotes:

"Mr Munk said Barrick was not trying to become a diversified miner like Rio Tinto or BHP Billiton, saying copper is the only non-gold metal where it desires significant expansion.

Minmetals, the Chinese state-owned miner, was among the multinationals targeting copper assets.

Barrick has gatecrashed Minmetals’ bid for Equinox with its C$7.3bn agreed deal. The competition for Equinox – whose value is based around a single mine in Zambia – is one sign that the metal is taking on an aura traditionally reserved for gold.
http://www.ft.com/cms/s/0/2a102274-6f6a-11e0-952c-00144feabdc0.html#ixzz1KaYCke98
and
For a company long concerned with protecting its image as a pure-play gold miner, doing an (almost) unapologetically copper-driven deal is a big admission about the relative futures of the two metals.

Barrick could have put that money to work buying a gold deposit and adding to gold production per share, but instead it’s going for copper. It’s a big statement on which metal has more opportunity right now.

http://www.theglobeandmail.com/globe-investor/investment-ideas/streetwise/barrick-suddenly-takes-a-shine-to-copper/article1998210/

The great recession hits China


BEIJING (MNI) - Prices of new homes in China's capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city's Housing and Urban-Rural Development Commission.


http://imarketnews.com/node/29203

Thursday, April 21, 2011

Copper keeps going up

From: http://business.globaltimes.cn/china-markets/2011-04/647533.html




Copper on the Changjiang Nonferrous Metals Trading Market, a major spot metals market in Shanghai, traded Thursday at an average price of 71,825 yuan ($11,018) per ton, up 425 yuan ($65.19) from the previous day.


I think they mean metric ton, which is 2,204.62 lbs or 1,000 kilograms. If that is correct, then the price is right at $5.00/lb.

The Comex price is $4.34 (see http://www.metalprices.com/FreeSite/metals/cu/cu.asp).

Wednesday, April 20, 2011

Silver is going nuts

It was $40 only 1 week ago. Now it is almost $46 and it will probably jump quickly to $49 and bounce off the $50 ceiling. The question is how long until it breaks $50.

See: http://news.silverseek.com/SilverSeek/1303153473.php

That point is here today, and I think the signs are clear: gold is approaching $1500 and more importantly Silver is about to smash through the most protected price in the history - $50. I think it bears repeating, $50 silver is the most protected price in recorded history, it is a price that's cost trillions and trillions and millions of lives and untold millions in misery to defend. $50 silver has been defended with all the energy and manpower the cult of evil can muster. The war is not over and the price is still out of reach, but momentum is on the side of humanity. After $50 there's no more resistance - Silver will break free and rise quickly to crush the banking system, the energy and life blood of the enemy. Beyond $50 silver, the dollar and the banking system will collapse quickly. George Soros and the BRIC nations are already aware - the dollar hegemony is cracking and $50 silver is the wedge in the heart of the beast.

Tuesday, April 19, 2011

Is China moving towards the "copper standard"?

First of all, here is an article from a couple of years ago:


China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.

Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

"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," he said.

The SRB has also been accumulating aluminium, zinc, nickel, and rarer metals such as titanium, indium (thin-film technology), rhodium (catalytic converters) and praseodymium (glass).

While it makes sense for China to take advantage of last year's commodity crash to restock cheaply, there is clearly more behind the move. "They are definitely buying metals to diversify out of US Treasuries and dollar holdings," said Jim Lennon, head of commodities at Macquarie Bank.

John Reade, metals chief at UBS, said Beijing may have a made strategic decision to stockpile metal as an alternative to foreign bonds. "We're very surprised by Chinese demand. They are buying much more copper than they will need this year. If this is strategic, there may be no effective limit on the purchases as China's pockets are deep."

...

Beijing may yet buy gold as well, although it has not done so yet. The gold share of reserves has fallen to 1pc, far below the historic norm in Asia. But if a metal-based currency ever emerges to end the reign of fiat paper, it is just as likely to be a "Copper Standard" as a "Gold Standard".

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5160120/A-Copper-Standard-for-the-worlds-currency-system.html



Now, here is another old article about China investing in copper mines in Peru:


Li Shiping, 47, owns a smelting company that is about to fire up a new electric furnace made with 110 tons of copper, one of thousands of industrial projects in China’s developing interior. To stoke them, a Chinese state-owned mining company will tear down the peak in Peru and ship home the copper. It plans to relocate the town of Morococha, population 5,397. Many, including Ancieta, don’t want to leave.

The project is part of $11 billion in Chinese mining investments planned for Peru, a quarter of the country’s total, according to Fernando Gala, the Peruvian vice minister of mines. China is prospecting for mineral treasures around the world as it develops faster than any major economy in history. Its copper use is growing so quickly that by 2035 global demand for the metal may outstrip supply by 11 million tons, according to CRU, a London-based mining and metals consulting firm.

China’s annual needs for copper will almost triple to 20 million tons by 2035, CRU projects. In 2010, it will consume 6.8 million tons, 38 percent of global production, after more than doubling its share of world purchases this decade, CRU says.

As a result, copper has almost tripled on the London Metal Exchange since December 2008 despite the global recession. The metal closed at $8,200 a metric ton on Oct. 29 [2010]. Jeremy Gray, global head of resources at Standard Chartered Plc in Hong Kong, calls copper “red gold.” He says the price may rise almost 50 percent more to $12,000 in six to 12 months.
...
Peru and China signed a trade agreement in April 2009 in Beijing that became effective this March [2010]. Peru’s exports rose 31 percent through September, lifted by sales of copper, gold and fishmeal, according to Comexperu, a business trade group based in Lima. The U.S. and China each accounted for a sixth of those sales.

http://www.bloomberg.com/news/2010-11-01/china-becomes-boss-in-peru-on-50-billion-mountain-bought-for-810-million.html

Monday, April 18, 2011

Using copper as barter


Gold and silver have traditionally been used as stores of value, but the problem with them is that they are so expensive they would just locked in a vault. Also, you could be convicted of terrorism if you use them as money.

What about copper? It is very attractive cheap and useful, and I doubt that the Secret Service has any interest in copper bullion.

As of today, you can buy a 1 kilo copper bar for $19.00 at Liberty Bell Bullion (spot price about $9.40 based on $4.30/lb). Here is one for $22.60 from Deadwood Gold. Ebay also sells copper bullion.

Anyways it is interesting to think about buying copper as a tangible physical investment.

Sunday, April 17, 2011

Saturday, April 16, 2011

Friday, April 15, 2011

The new Silk Road

See: http://www.chinadaily.com.cn/china/2011-04/15/content_12330303.htm Ju Chengzhi, director of the international affairs department at the Ministry of Transport, told China Daily the soon-to-be-built Kashgar-Erkeshtam expressway is a section of the proposed new link between Asia and Europe. He said the route within China will start in Lianyungang, in East China's Jiangsu province, and travel through Xi'an, in Northwest China's Shaanxi province, before reaching the Xinjiang Uygur autonomous region. The proposed route will continue through Kyrgyzstan, Uzbekistan, Tajikistan, Turkmenistan, Iran and Turkey, before heading into Europe, he added. "The route will link China with major countries in Central Asia, Western Asia and Europe. It will pass these countries' administrative centers, major cities and resource-producing areas," he said. According to Ju, China has also proposed two other road connections between China and Europe -- one going via Kazakhstan and Russia and the other going through Kazakhstan and via the Caspian Sea. Experts said barriers -- including technical ones and issues connected to taxation and customs -- are the reason why almost all of China's exported goods to Europe are transported by sea. Even goods from Xinjiang, Gansu and Inner Mongolia are currently sent east by rail to China's ports before they are shipped to Europe.

Tuesday, April 12, 2011

Who is Norman Foster?



The Frank Lloyd Wright or Buckminster Fuller of our time, but probably more influential than either. The visionary of our time - Norman Foster.

Camko City, Cambodia

Sunday, April 10, 2011

Astana, Kazahkstan

The effect of the threatened shutdown

The recent minor cuts made to avoid a threatened government shutdown will have almost no effect on this future crisis I am talking about. It appears that before the cuts, the 2011 fiscal deficit would have been $1.65 trillion. The cuts total about $50 billion, with $38.5 billion in the deal and another $10 billion done earlier as part of the continuing resolutions.

The national debt on 9/30/2010 was $13.561 trillion. On 9/30/2011 it should be about $15.16 trillion, and this is after the cuts.

I am all for anything that would improve the situation. However, the deficit is at least $100 billion/month and the cuts at best totaled $50 billion. So the "fix" pushed the crisis out by 2 weeks at best.

Wednesday, April 6, 2011

Crisis in 2017?

From: http://www.bloomberg.com/news/2011-04-05/u-s-fiscal-crisis-in-spitting-distance-commentary-by-laurence-kotlikoff.html "CBO’s baseline budget updates suggest the date for reaching what Carmen Reinhart, Kenneth Rogoff and other prominent economists believe is a critical insolvency threshold -- a 90 percent ratio of federal debt held by the public to gross domestic product -- has moved four years closer, in just nine months! ... Last June’s analysis had us going critical (crossing the 90 percent debt-to-GDP threshold) in 2021. ... On March 18, when the CBO released a new forecast that incorporated the president’s budget, the 90 percent mark had moved up to 2017." Comment: I'm using a different metric and am still sticking to the 2021 date.

Saturday, April 2, 2011

Baku, White City



See what a little oil money can do at http://www.bakuwhitecity.com/

Friday, April 1, 2011

Better news

I am so cynical that even a slight improvement is good news. The annualized rate of increase of the national debt has dropped from 14.1% in my last calculation to 12.9% now. The average quarterly increase is 3.07% (based on the timeframe of 6/30/09 to 3/31/11). Using these number, I arrive at the following projections:

9/30/11 15160
9/30/12 17115
9/30/13 19323
9/30/14 21816
9/30/15 24630
9/30/16 27807
9/30/17 31394
9/30/18 35444
9/30/19 40017
9/30/20 45179
9/30/21 51007

So yea, the system won't collapse until 2021, one year later than in my previous projection!

Update: 6/19/2012.  This is model D-3, and is still too pessimistic.