47 of 57 people found the following review helpful
Should be retitled "Commodities Bear",
This review is from: Commodities Rising: The Reality Behind the Hype and How To Really Profit in the Commodities Market (Hardcover)
This guy completely rebuffs Jim Rogers' thesis of a new bull market in commodities. Someone is very wrong here and I'll put my money on Rogers being right. Given his assocation with Goldman Sachs, who many believe is now a quasi-government operation, used in order to "manage" the price of everything from the S&P index to the gold price, this book is a disinformation project masquerading as a "rational" and evenhanded analysis of the commodities markets. Much of the information on the growing demand for commodities in China is presented in such a way as to make the reader believe that becauase the average Chinese worker makes less than $2 a day, that, demand for raw materials in China is overstated. He assumes that it would be the average Chinese citizen as the ultimate consumer of these raw materials, and therefore, he says , since they cannot afford to buy " a copper plated" frying pan on $2 a day, that demand for copper would be overstated. The fact of the matter is that the Chinese, have committed to massive PUBLIC infrastructure projects for the next 20 years, that will require huge amounts of raw materials, most of which will need to be imported as China has a very limited amount of raw materials domestically. The author argues that China is becoming a net EXPORTER of raw materials!!! This is simply not true. China is now scavaging the globe trying to buy up whole raw material companies, in Canada, the US, Australia and Africa to meet their projected needs for the next 20 years. One recent example of this was their bid for Unocal, which was subsequently rejected via defacto veto by the Bush administration.
In addition, the US FED and CB's, because of the massive public and private debt obligations will be forced to massively inflate over the next 10 tears or so, or they will suffer a deflationary worldwide depression; therefore, the only prescription will be for continued worldwide growth with relatively high inflation. This fact alone should carry most commodities to multi-year highs, not to mention overall macroeconomic supply and demand.
This author argues that worldwide commodity supplies are catching up with demand, and that may be somewhat true on a short term basis, however, and a macro long term basis , there is no way supplies can meet demand based upon at leat 2 billion NEW consumers who are slated to enter the global middle class in the next 20 years.Even though raw materials may be a smaller component of overall production in the 21st century, there are a fixed amount of raw materials, which at best can be exracted on a linear basis. while worldwide demand will increase geometrically.
I would advise any reader of this book to read Jim Rogers' book and think for themselves.
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Initial post: Apr 16, 2008 8:45:01 PM PDT
Dirk J. Willard says:
I am a chemical engineer with over 30 years of experience in a wide range of field. I just love it when someone makes linear projects. As a species I am convinced that it will be our downfall because raw materials are not limitedless, no matter what the demand is. And, I really don't think you can put two cars in garage and a HD TV in every air conditioned house of every chinaman in China no matter what any business major says.
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