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Cline Mining Corporation T.CMK



TSX:CMK - Post by User

Post by bond46on Dec 02, 2012 5:25pm
212 Views
Post# 20672607

RE: China's waiting game

RE: China's waiting game

In the aftermath of the Lehman collapse and the onset of the financial crisis, China at the urge of US and Europe opened up the monetary spigot and flooded the system with something of $700 billion, a huge amount of money that was channeled to infrastructure projects since the export markets both US and Europe dried up. This uneven allocation of capital inside China, created a lot of inflation since production of tangible products for exchange, i.e., exports dried up. It took the Chinese eight quarters to bring inflation down from 6.5% to 2%. This stimulus created a sense of euphoria in the West and boosted commodity prices thus saving the day both in Europe and the US. But no longer. China while it brought down its inflation and had done its part of averting a melt down of the global economy, this time around was not willing to play the game of the west and the latest stimulus was only $150billion, a modest amount by comparison. This prompted some commodity experts in the West to say that that was hardly enough to jump start the global economy. And to that China responded that "China is not going to be the financial coolie of the West.". First the Chinese lectured Angela Merkel that with the austerity policies of Europe, they harm the Chinese interest in Greece and their export market. And the latest salvo was against the US which "though it advises the rest of the world what to do they are not in a position to resolve a simple issue [ meaning the fiscal cliff]. And while the West had pinned their hopes on the new leadership to boost the infrastructure stimulus, they may have to wait quite a while. The Chinese have learned their lesson and are not going to create another inflation bubble. So miner 8740 may be right in saying that the mine may not go into production as soon as Mr. Stone had thought. Which makes the survival of this outfit more perilous

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