For those of you who don’t remember the Hunt Brothers, here is the background. Fast forward to today, and we see a “mystery holder” of copper stocks at the LME. Let’s see a massive manipulation at the same time China is blowing up, could get very interesting. Just a thought, but does anybody care to wager that this is Chinese or a Chinese stooge? I would not want to be involved with being long any metal now.
Anyone in these markets should start reading obscure stories in the China Daily, under reported in the West. These stories are just special, take the time to read and reflect on them. They go on and on, painting a revealing picture of what a crony communist capitalist Bubble economy looks like when the wheels come off.
In the first, the refiners are pointing finger at crony state oil apparatchiks for, in effect, profiteering.
In the next China surveys the shortage landscape and decides to “crack down on profiteers.” I would surmise that a profiteer in China is anybody not paying large bribes or a who is not a well connected apparatchik. Even more likely the profiteer IS an apparatchik.
The third story shows how, if you aren’t an exporter being crushed by input costs, the Gumnut will step in and slap on prohibitive export tariffs. The idea here is to keep the product domestic, where it can be looted and prosecuted by apparatchiks as a profiteer. I am sure the regulation and exemption book is perfectly clear as well, just bring your bribe money.
Here, another bureau defends price increases and blames it on the end of a special Gumnut subsidy.
This story describes the major state owned power company taking huge losses on coal prices, which they claim were impacted by “consolidation”. Here a regulator reiterates an order to coal suppliers not to increase prices. It is a little unclear if this is a price control, but that approach was definitely utilized for producers of cooking oil. Here another regulator vows to crack down on speculators.
A taste of real estate conditions and record pollution in Shanghai says a lot, but apparently nobody lives in these new places anyway. I was in China during one of these pollution episodes and it took me months to recover. This brings us back to polluting coal which China still uses for 70% of its power generation. Euan Mearns of Oil Drum writes that coal production is plateauing and unsustainable.
While European and American central bankers and governments bail out and offer lifelines to financial institutions, we get stories of how western “institutions” are climbing all over themselves to speculate in the China bagunca (mess), I mean miracle. The universal and I think false assumption is that the Yuan is some kind of undervalued currency. It’s not too difficult to connect the dots on where this ends up.
Constructing empty buildings uses lots of cement, which not surprisingly is priced at an all time high in China. The price to income ratio for housing is 27:1, five times the global average.
And the beat goes on and on.
