Would a reduction in China's reserves threaten Sil
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Daily Pfennig: The Big Events Week...
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By Chuck Butler
Apr 25 2011 9:50AM
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"... OK… remember last week when I told you that China’s Central Bank head, Zhou, had said that China had too much in reserves? (read dollars, folks)… Well, this past weekend, a member of the monetary policy at the Central Bank, Bin, said that “$1 Trillion dollars in reserve would be sufficient.”… So, in case you’re searching for a calculator right now, (I know I did! HA) that would be a “skimming off the top” of $2 Trillion dollars! It just so happens that $2 Trillion is about the same amount that the Fed Reserve has printed with their QE1 and QE2!
Now, the question would be, just what are they going to do to get rid of $2 Trillion dollars? Ahhh, grasshopper… We all know what they are going to do… They’re going to buy resources for their economy… They’ll spread a little to the problem children of the Eurozone, and they’ll invest in their infrastructure… The sleeping giant, that my dad used to warn me about when I was a kid, has awakened, eh? ..."
(I added the caps for emphasis. sunwood)
I'm wondering what sort of an impact these $2 Trillion are going to have on Silvermex and the other resource companies. Do any of you guys see this as a series of takeover threats? If I had that sort of money, making "offers they couldn't refuse" would be kids play.
Canada has to be a very attractive source of resources to China. Just the military potential of sitting on Uncle Sam's doorstep would be probably be worth a hefty premium to China.
How would a little guy like Silvermex fair in such a takeover game? Do you think it could happen. Do you think we as shareholders would win or lose; i.e. would a short term profit offset the hoped for "opportunity profit" those of us in it for the long haul crave?
sunwood