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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 3119
Posted: Feb 22, 2010 5:00
Comments: 3119
Forum Topic:
Commodity FX (CAD AUD NZD NOK)
Discuss Commodity FX (CAD AUD NZD NOK)
Industrial production remains low , retail low, and consumer inflation low.
Thus China has entered the same state of economy as Eurozone and USA, incomes from productive work jobs falls, the velocity of circulation of money drops, paving the way to deflation, not inflation.
80% of Australia's GDP is commodity exports, and the biggest parts of commodities goes to Asia, with China the biggest asian customer. Without commodities Australia industry is not self-sustaining.
I do not believe China could avert hard landing with another big round of infrastructure spending,
because what really stands in the way is the "medieval" distribution of wealth and income. China needs far more jobs and far less princeling-Oligarchs.
Thus AUD NZD are imho very safe shorts, the only question is at which price starting short, that is not if, but when.
i guess GS will push commodities higher like 2008.