Wednesday, December 31, 2008

Middle East crisis widens

Hundreds of thousands of protesters have marched world wide to protest about the military invasion of Gaza by Israel. In Saudi Arabia tensions between the hard line Government and more liberal forces in the Kingdom are increasing as a result of the Gaza war.
Contacts are telling deeplode that the Gaza war is being used as fuel by political opponents to the ruling families.
From the governing elite the response is clear…
"The law in force in the kingdom bans demonstrations which cause chaos and disrupt public order. The security forces will prevent any attempt to organize rallies or demonstrations," (official response..)
The East of the Kingdom is reportedly seeing violent demonstrations with the military using force to break up these civilian protests.
The region is becoming more and more destabilized and the risk ofIran becoming involved is increasing as Israeli forces prepare for ground incursions into Gaza and air attacks on Iran.
An explosive situation which is extremely dangerous and with global mediators appearing powerless.
The next week or so is critical.

sources..private and news wires...opinions mine.

Tuesday, December 30, 2008

Egypt under increasing pressure.

Al Jazeera is reporting that demonstrations have broken out in the Yemeni city of Aden and the Egyptian consulate has been occupied.
Apparently a Consular guard opened fire and at least one demonstrator was wounded.
A number of demonstrators were arrested. This latest protest follows other demonstrations across the region in re-action to what is seen as Egypt’s collaboration with Israel. Remember that it is common knowledge that Israel’s Foreign Minister was in Cairo just prior to the Israeli action.
Arab states are disturbed that Cairo has closed the Rafah border while Cairo defends its action as based on the 2005 border agreement.
Whatever, it seems certain that Egypt will become a target if recriminations start and the instability spreads.
One hopes that Iran is able to exercise restraint but the situation is certainly tense.
This risk will be more and more reflected in commodity prices.

Source Al Jazeera......opinions mine.

Monday, December 29, 2008

Has Eygypt received some assurance from Israel

Much Palestenian anger is being directed at Egypt, seen by Hamas and some nearby governments as having given in to Israel’s military action by sealing its border with Gaza and forcing back at gun point many Palestinians who were trying to flee the attacks.

Witnesses at the Rafah border crossing described a chaotic scene as young men tried to force their way across into Egypt, amid sporadic exchanges of gunfire between Hamas and Egyptian forces.
This has huge ramifications for Egypt if Israel fails to control that region.
Not looking good. wires.... opinions DeepLode

Gaza ground incursion looks likely

Reports are saying that Palestinians in Gaza's densely populated capital are in a state of panic as Israel continues its air assault and seems to be preparing for a ground incursion as Israeli Defense Ministe Ehud is saying that Israel is now in "all-out war" with Hamas. Tanks and ground troops are massing at the border.
President Bush has set up a very tough challenge for the Democrats with his ham fisted approach to international politics. (He thought that Texas was all there was)

The World speaks on Gaza

What is the world saying about the slaughter on Gaza?

POPE BENEDICT XVI "The native land of Jesus cannot continue to be witness to so much bloodshed, repeating itself without end. I implore an end to the violence which must be denounced in all its forms and a restoration of the truce on the Gaza Strip. "I call on the international community to do all it can to help the Israelis and Palestinians on this dead-end road ... and not to give in to the perverse logic of confrontation and violence but to favour the path of dialogue and negotiations."

SPOKESMAN FOR BAN KI-MOON, UN SECRETARY GENERAL"The secretary general is deeply alarmed by today's heavy violence and bloodshed in Gaza, and the continuation of violence in southern Israel.[He] appeals for an immediate halt to all violence [and reiterates] previous calls for humanitarian supplies to be allowed into Gaza to aid the distressed civilian population."
"The United States is deeply concerned about the escalating violence in Gaza. We strongly condemn the repeated rocket and mortar attacks against Israel and hold responsible for breaking the ceasefire and for the renewal of violence there. "The ceasefire must be restored immediately and fully respected. The United States calls on all concerned to protect innocent lives and to address the urgent humanitarian needs of the people of Gaza."

PALESTINIAN PRESIDENT MAHMOUD ABBAS "I want to say very clearly that, yes, we talked to Hamas in Gaza and we spoke to them clearly and honestly, directly and indirectly, and through many parties, Arab and non-Arab. "Now it's not important what problems existed between us. We called them and told them please, we ask you do not end the truce. Let the truce continue and not stop so that we could have avoided what happened, and I wish that it had been avoided."

SPOKESMAN FOR JAVIER EU FOREIGN POLICY CHIEF "We are very concerned at the events in Gaza. We call for an immediate ceasefire and urge everybody to exert maximum restraint."

BRITISH FOREIGN OFFICE STATEMENT "The only way to achieve lasting peace in Gaza is through peaceful means. Whilst we understand the Israeli government's obligation to protect its population we urge maximum restraint to avoid further civilian casualties. "We also call on militants in the Gaza Strip to immediately cease all rocket attacks on Israel."

RUSSIAN FOREIGN MINISTRY STATEMENT"Moscow considers it necessary to stop large-scale military action against Gaza, which has already led to major casualties and suffering among the civilian Palestinian population. "At the same time, we call on the leadership to stop shelling Israeli territory."

AYATOLLAH ALI IRANIAN SUPREME LEADER "All Palestinian combatants and all the Islamic world's pious people are obliged to defend the defenceless women, children and people in Gaza in any way possible. "Whoever is killed in this legitimate defence is considered a martyr."

ARAB LEAGUE SECRETARY GENERAL "We are facing a continuing spectacle which has been carefully planned. So we have to expect that there will be many casualties. We face a major humanitarian catastrophe."

SYRIAN FOREIGN MINISTRY STATEMENT "Syria is following with great anxiety the barbaric Israeli aggression against the Palestinian people in Gaza... a horrific crime and terrorist act. "Syria calls on the Arab nation and the international community to use all possible means to put pressure on Israel to immediately stop the aggression, allow the wounded to enter hospital and open all crossing points [to Gaza]. "Syria as president of the Arab League calls on Arab leaders to hold an emergency summit to assess the dangerous situation in Gaza."

Source : News Wires...make up your own mind..I will and will express it here.

Saturday, December 27, 2008

South Australian Government "absolute" on uranium mining

In a recent interview the South Australian premier Mike Rann replied to a question aiming to confirm uranium mining in that state...."Absolutely!" He was referring to Olympic Dam but it augurs well for near term producer Alliance Resources (ASX: AGS)

Mr Rann was quoted as saying a visit to China in October had buoyed his confidence in its potential as a uranium export market.He is reported as saying that every meeting he went to was about uranium.
Mike Rann knows that South Australia has the capacity to be a major exporter of uranium and has long been outspoken on the need for his state to develop its uranium resources. Of course he was a major influence in changing the uranium policy of the Australian Labour Party prior to the last election.
AGS continues to be in the front row!!!

China needs to preserve its village food production

Today I farewelled a dear friend from China who had come down to spend a week with me over my holiday period. Her work is in the security of forex and international banking platforms. About that she says little but I gathered she is not as confident as I am about China avoiding the worst of the global downturn.
But all the meals we shared were home cooked by me ..and a helper or two!! The ingredients of those meals , except those that included meat or tofu, all came from my reasonably small but intensively cultivated garden. (and the wine of course but which was also local) So that leaves vegetables, herbs, fruit and eggs (well I didn't grow the eggs but they are happily deposited in a nest underneath the plum tree)
During a discussion about my vegetable garden I happened to mention that I preserve and cultivate most of my seeds for planting in subsequent seasons.
My guest lamented that this habit was dying out in Chinese self sufficient villages because of the well meaning but misplaced intentions of aid organisations working with the Chinese government which were distributing commercial seeds to local farmers . So the strength and variety of local plant generation was actually weakening.
Well I guess the intrusion of "western" practices is not all that good...not just in short term seed germination methods but, from what she said, also in the proliferation of short term foreign loans taken out by Chinese entities which are yet to hit the fan.
My optimism is still there but is on alert.

Tuesday, December 23, 2008

Saudi combats the global slowdown

Saudi Arabia has announced an SR475 billion ($US126.7 billion) economic stimulus budget for 2009, allocating more money for education and increasing public spending by 15.8 percent (SR65 billion)

The new budget has earmarked huge money for health services and social development, for water, municipality, agriculture, industry and mining infrastructure .

Large amounts have been identified for new road projects and for the maintenance of existing roads indicating an expectation for an increased reliance on roads rather than pipelines!!!
Saudi is determined to enter the global mining market and one should not under estimate the financial power of this socially conservative but fiscally aggressive kingdom...And Citadel Resource Group (ASX:CGG) is extremely well placed both geologically and politically.

Monday, December 22, 2008

Global Uranium Demand Rapidly Re-balancing

Now that France,Russia and the USA have completed the civil nuclear supply agreements with India the global supply and demand scenario is changing rapidly. It has been confirmed that Areva has agreed to supply 300 tonnes of uranium to India.

The uranium is to go to India's Nuclear Power Corporation and will be significant in easing the shortage of supply in India.India's reactors can now move back towards full capacity.
This deal, signed after changes to trade rules were made that allow India to participate in global nuclear markets, comes close on the heels of the agreement with Russia to supply uranium for the two reactors at Tarapur. (DeepLode has posted on this deal previously...)
India will continue to have an impact on the global supply capacity and as more reactors come on line globally (or even just on to the planning boards) sovereign states and power companies will begin to lock in future supplies. Production is lagging at the moment so the uranium price will come under pressure. And as DeepLode has already said Alliance Resources (ASX:AGS) is in the front row.

Friday, December 19, 2008

Minnesota Star steers the way

James Oberstar, a Democrat from Minnesota who chairs the House Transportation and Infrastructure Committee, said today he and party leaders were finalizing plans to spend $85 billion on transportation and public works projects. Those would upgrade crumbling roads, bridges, sewers and other aging infrastructure. Senator Oberstar said the bill's language would require that federally funded projects "can be started with people on the construction site working in 90 days". More and more the USA's new administration is falling in line with China's plans...domestic infra structure and more domestic infra structure.....and out with the grand plans of the Wall St greedies. Back to economic basics.

Obama readies the rescue

Barack Obama is promising a huge injection of funds to improve the neglected U.S. infra -structure and at the same time to "crack down on the culture of greed and scheming that's led us to this day of reckoning."

"If the financial crisis has taught us anything, it's that this failure of oversight and accountability doesn't just harm individuals involved, it has the potential to devastate our entire economy," He also had a crack at regulators and politicians who fell asleep at the wheel.
And how right he is.

Barack Obama may ask Congress next year to approve a stimulus plan of around $850 billion, an amount that has grown as the U.S. economy sinks deeper into recession, an adviser to the president-elect has been reported as saying.

The latest proposal is circulating in Congress as Obama’s advisers work with lawmakers to craft a package aimed at improving roads, bridges and other parts of the crumbling infrastructure. (Sounds not unlike China's rescue package with its emphasis on infra-structure)
The target is 2.5 million jobs over the next two years.
Well we are getting close to a trillion dollars!!!
At least some action is assured after the dopiest U.S. administration in its history.

(news wires have reported the substance ..the opinions are those of DeepLode)

Wednesday, December 17, 2008

China bets on a US recovery.

China today has reported its October international capital flows and once more has increased its holdings of US treasury securities by $65.9 billion. It sure is the No 1 holder of American debt. China now holds to $652.9 billion of it and is well ahead of Japan as the top holder of US debt.
It has almost a third of its $2 trillion of foreign exchange reserves into US treasury securities.
That is a huge vote of confidence in a recovery.

Tuesday, December 16, 2008

Saudi Arabia : The new hard rock frontier

Tonight I sat at a table of "serious" investors/ advisors/ bankers...meaning richer than I am...and they talked about Saudi Arabia. Apparently new legislation is steering Saudi away form oil into mining. ( That much I knew because I hold CGG).
After the second bottle of Petaluma (1999) extravagant claims were made! eg. King Solomon's riches came from Saudi!! - and I was told that the Saudi government only recently opened up the land for large-scale commercial exploration and production. (That I already knew as being correct)

Saudi Arabia is the size of a small continent it was said and since 1945 the amount of exploration drilling that has been done is less than occurs in Australia in one year.(That is accurate)
And apparently the State's mining enterprise Ma'aden is leading the surge with heaps of money...(Another bottle opened....(Mount Mary Quintets 1998).
At this point I ventured that Ma'aden is Arabic for minerals.
They didn't know that! One to me!
But I agree it does appear that new frontiers are opening up....and of course Saudi also has treatment capacity...and the low cost of diesel is a relief.
I then admitted that I hold CGG and was aware that Sheik Khaled Al Qahtani was recently in Australia. Silence...a few more drinks and I quietly left...
Beware of smart investors/bankers who know many things!!

Seve Ballesteros goes home to recover

DeepLode is a big fan of Seve Ballesteros and wishes more modern day golfers communicated with the paying patrons as Seve did.
He knew we came to see him and acknowledged us.
He is now out of hospital two months after brain surgery:
His web site says "There is a long recovery time ahead and I shall keep fighting with patience and determination against the brain tumor that was detected at the beginning of October."
Good Luck Seve..
and I will try to break my handicap tomorow and think of the great pleasure you have given!!

Monday, December 15, 2008

Citadel reports more major intersections at Jabal Sayid

DeepLode has written previously about Citadel Resource Group (ASX: CGG)and its excellent prospects in Saudi Arabia and last week the good news continued to flow.They released more very significant results from Jabal Sayid. Remember that Owen Hegarty and other people close to him are involved here!
But also of interest is that major Saudi Arabian interests in Citadel were recently in Australia.

Sheik Khaled Al Qahtani and his family were here to meet with "investors".
It turns out his family have another connection to Australia.
In a conversation on Sydney Harbour the Sheik explained that his father imported Holden F.Js to Saudi Arabia.And they were very popular but then Holden stopped making a left-hand drive model!
So the Saudis had to make a shift to those inferior Mercedes machines!!
Let's hope the Citadel connection lasts longer!!!
DeepLode is confident of that!

Friday, December 12, 2008

Bass Metals gets a bargain

Deeplode mentioned Bass Metals (ASX:BSM) a day or two ago and quoted Barry Fitzgerald saying in the Melbourne Age that the Hellyer Mill was a perfect fit for Bass.
Hellyer's replacement value was estimated to be upwards of $100 million but in this market a bargain could be had!
"Should Bass secure the Hellyer mill, it becomes a more interesting base metals play all round." he writes.
Well they have bought it this week ...for $4million plus all the tailings etc for an additional capped royalty.
A bargain indeed..........Patience will be rewarded.

Thursday, December 11, 2008

Don't flash in front of John Daly

At least not with a camera!
John Daly smashed a spectators camera into a tree in Sydney yesterday when according to Daly the man got too close to him.Golfers increasingly seem to view spectators as a nuisance. We are kept at sometimes silly distances from the play and too often are berated by players after they hit a poor shot.Perhaps they should remember that the sponsor's target at tournaments is the paying public not the players.
Yes we do pay for what increasingly seems to be a "privilege" to watch these highly paid sulky sports men!
Poor John Daly!
The only reason he was paid to appear in Australia is because of the very reason the man wanted to take a photo of him. John Daly is cashing in on the "renegade" persona he himself has created. You can't have it both ways John.
And why is there such a silly rule as no cameras on the golf course? Small, silent modern digitals are in no way an intrusion.Could it be a commercially driven decision?
If John Daly was upset by the spectator he should have spoken to his caddy who could have called an official, a marshall or security.Daly was wrong and if his actions had occurred in the street would not the police be involved?
Golfing officials need to take a close look at the direction in which the sport is heading!

Canberra Labour congratulates W.A. Liberals on Uranium

B4M discovery last night won the exploration award of the Association of the Mining and Exploration Companies and Martin Ferguson in presenting the award congratulated the newly elected W.A. Liberal Government on overturning the previous Labour Government's ban on uranium mining.
Four Mile will be Australia’s next uranium mine producing by 2010.
But the interesting comment was the thumbs up to the W.A. Liberal Governments go ahead to mining in that State....and my interest in the uranium project of Blaze International certainly now looks better...!!! At 0.006 it is a bargain.
And DeepLode has often posted on AGS and its outstanding B4M project.

Wednesday, December 10, 2008

New Chinese Car Manufacturing Venture

News wires are reporting that China's largest automobile maker, Great Wall Motor Co, plans to start manufacturing cars through a joint venture in Bulgaria.
The Great Wall Motor Company is listed on the Hong Kong exchange and plans to invest 80 million euros in a new car plant at Lovech, about 170 km northeast of Sofia. The venture will employ about 1,500 people and will start up early next year.
DeepLode has posted on how China is finding many ways to stay ahead of the pack and steal a march on the West especially the troubled U.S. auto industry. This is another example. Quick and flexible.

Detroit moves to China

DeepLode has posted before on the benefits to China of the demise of Detroit. The American car industry is regretting its gung ho entry into Joint Ventures with the Chinese government for production in China.
They have handed China a bargain.
The Big Three car makers, namely GM, Ford and Chrysler all have joint ventures in China and sell over a million vehicles annually in China and surely see China and Asia as its most important emerging market.
The Chinese market has been profitable.
And will continue to be so.
Ford is making a profit in China
G.M. is making a profit in China and is capital positive.
All joint ventures of Ford are making a profit.
Chrysler sales in China increased 217 percent in the first ten months of this year. The company is going to introduce two new models next year.
The U.S. auto industry crisis is an enormous opportunity for the Chinese Auto industry to steal a march on the U.S. And remember that these are formal Joint Ventures which give the Chinese partners (ie the Government ) control.
The current rescue plan before the U.S. Congress is political not economic.
The car industry has already been moved to China by the same industry decision makers who are now cap in hand in Washington. The transition is on.Production will go to China. The big three have signed the contracts.

Hong Kong Up Again Today

Hong Kong is up over 5% again today. Seems at odds with the view expressed by the chief of the Australian Reserve Bank regarding China's economy as the Hang Seng is often a very, very accurate indicator of the confidence of the Chinese cash emperors. (No criticism implied of the Reserve Bank..they seem on the money at the moment) But I would be expecting some more strong directions from the Central Economic Work Conference which, as I write, is winding up in Beijing. A recovery has started in my opinion and China is eyeing off some very cheap Global entities the acquisition of which will put them in the front of the field for the next twenty years.

Tuesday, December 9, 2008

Blazing Saddles

DeepLode enjoys finding penny dreadfuls that turn into golden eggs. Blaze International (ASX:BLZ) might just be one of those.Their past has been in technology with two products called PIXE and Kemelon. They tell us that the first is a pre-compression filter and the second a multi-media messaging platform. While that sounds impressive they have been a flop and are about to be dumped.
But it has one very interesting asset and that is its uranium ground at Yeelirrie . Because of the W.A. government's ban on uranium mining it has sat idle.That has all changed of course with the change of government in Western Australia. The project surrounds BHP Billiton's 50,000-tonne uranium deposit which will certainly be re-activated. While it will take time BLZ may just lay a golden egg!
And Traders Macquarie, an investment outfit run by the very savvy Leon Serry, thinks so as well. They have been buying BLZ in big junks and now sit well up on the register.
BLZ was traded yesterday at 0.006. (one trade for 3 million shares)

U.S. reschedules Nuclear Delegation to India

A trade mission from the U.S. nuclear sector was to visit India in December to check out potential large scale deals. They were to meet with Indian government officials and the top brass from Indian nuclear companies. It was cancelled of course because of Mumbai and has now been re-scheduled for January.
Japan is also trying to get agreements approved.
DeepLode has posted on the success that the Russian delegation had recently so the U.S. will be very keen to get in on the rapid expansion of India's nuclear industry.

Monday, December 8, 2008

Who are buying houses in the US ?

A friend of mine in H.K. alerted me today to a trend in the real estate investment strategy of individuals from China. Chinese investors are buying up houses in the stressed American market.China is concerned because it wants its investments at home at the moment. But it also likes the idea of a strong Chinese investment in the U.S.
And as Chinese companies face restrictions on investment in the U.S. the idea of many individual Chinese investing in the U.S. is somewhat of a bonus. And Chinese banks are funding some of these purchases. Join the dots folks.


Hong Kong took an 8% run seems it is expecting some positive drivers from the annual Central Economic Work Conference being held from today till Wednesday which will set the tone for next year's economic policy. This three-day event spells out how the Government will use its huge stimulants to bolster employment and domestic demand.
China is determined to reduce its dependence on exports and thus stay ahead of the declining Western Economies.
This three day Conference will announce already decided new growth strategies but make it appear as a "consensus" decision.
China is determined to grab this opportunity.
Expect some BIG new announcements( building on already known huge injections)..which Hong Kong already has wind of!!!
The West seems ignorant of these internal Chinese processes .

Sunday, December 7, 2008

Alliance Resources announces high grade extension

Alliance Resources (ASX:AGS) have announced yet more high grade hits at its Beverly Four Mile project (J.V. with Quasar) in South Australia. Deeplode has mentioned AGS a few times but it keeps getting better. In fact they are having difficulty finalising a final resource estimate because the size of the deposit just keeps on getting bigger. The market response stays subdued but it won't forever of course. New reactors are on the go globally but production is being held back by the global conditions.
However the price of uranium is gathering pace on the upside.
Check out the full report on their web site.

Here is a small extract.


The results reinforce the Four Mile Project as a high-grade mineralized system with potential for significantly increasing the uranium resource base.
Mineralisation at FMW remains open to the north, northeast, west, and southwest.
The mineral resource estimate for a part of the Four Mile East Deposit is in progress and anticipated to be complete in January 2009"

Saturday, December 6, 2008

Russia signs Nuclear deal with India

A few days ago DeepLode reported that India was a current strong focus of the nuclear industry and that trade delegations were flocking to the country. The Mumbai attacks have slowed that down. I did report however that Russian nuclear people were already in India and yesterday that was confirmed with the announcement of an agreement between the two countries. So what does that mean?
Well for starters it has allowed for an immediate supply of uranium fuel to India's troubled Tarapur power plant.This facility has been operating at less than 50% of its capacity because India could not access uranium fuel supplies.This is a long term contract!!
The capacity to sign the agreement comes as a result of India being admitted to the mainstream of the global nuclear power sector. This was after India clearly separated its military and civil nuclear facilities and began to bring in appropriate safeguards to prevent nuclear materials moving between the sectors.
One can only hope this will be well monitored as Pakistan turns up the heat on India and its Government.
While the agreement with Russia includes energy in general, space exploration and technical cooperation are also included and also enables commercial deals between Russian and Indian firms. Russian firms will also build a series of large reactors across India.
India of course is planning a massive nuclear energy development...the impact of that on the price of uranium is yet to be factored in and with a slowdown in mining watch for another big run in the price of uranium.
My pick of the global near term producers Alliance Resources (ASX: AGS) will be in the right place at the right time!!

Friday, December 5, 2008

Paulson Capitulates In China

I noticed an interesting quote from Henry Paulson on the news wires today.

"Paulson also said that China has decided to allow foreign banks to trade bonds in China on the same terms as Chinese banks, among other agreements reached to further open up the country's financial sector."

If the U.S. now believes that to be a concession then it is a very clear indication of where they believe the financial grunt is to get the U.S. and the world out of this mess they created....from no regulation to tight regulation...An indication of a cave in by the worst American administration in history....and an indication of the biggest swing in economic and political power since 1945.

Also notice that George has bought a mansion in Dallas in the last few days...very appropriate.
Well that is what the White House said
"The president and Mrs Bush have purchased a home in the Preston Hollow neighborhood in Dallas, Texas, where they will live after the president leaves office in January 2009,"

Thursday, December 4, 2008

Another $US20 billion from China and the U.S.

As I suggested a day ago the outcome of the Strategic Economic Strategy Dialogue is significant. What's behind the deal will come out eventually. China would be looking for some benefits in terms of trade with and investment in the U.S.

From the news wires a few minutes ago

December 5, 2008 - 3:25PM
US Treasury chief Henry Paulson said Friday the United States and China would make 20 billion US dollars available in trade financing to boost commerce amid the global slowdown "To support trade flows during this period of financial turmoil the US and China announced today that our two export-import banks will make available an additional 20 billion US dollars for trade finance, particularly for creditworthy importers in developing economies," Paulson said.China and the United States completed their last high-level economic meeting under the Bush administration with vows to fight protectionism in a time of global financial crisisFreeing up trade to boost weakening global growth was one of the main themes of the two-day Strategic Economic Dialogue, led on the US side by Paulson."Both sides believe that in the face of the growing challenges posed by the... crisis, we must fully oppose all forms of protectionism," Vice Premier Wang Qishan, the head of the Chinese team, told reporters."We stand ready to work actively with other countries in the world to promote the early resumption of the WTO Doha round of negotiations so as to... promote prosperity and growth of the world economy and trade."The last round of Doha trade talks collapsed in July when the United States and India clashed over measures to protect poor farmers against import surges. Paulson told the briefing the United States and China would make 20 billion US dollars available in trade financing to boost commerce amid the global slowdown."

How China will spend the stimulus package

From what I can work out this is how China will use its huge stimulus package. (and more will come if needed) The structural changes to its financial system are of course critical in conjunction with the injection of capital

280 billion yuan for housing projects
370 billion yuan to improve people's lives and infrastructure in rural areas
180 billion yuan to build highways, railroads, and the power grid
40 billion yuan for medical care and education
350 billion yuan for ecological and environmental projects
160 billion yuan to fund R&D and innovation projects
1 trillion yuan for places worst hit by the earthquakes

This will make a difference especially in the areas of public housing, health and the "welfare areas". Chinese families are reluctant to spend because of fears around these three areas. if the government can demonstrate that it is going to take more responsibility in these areas the hope is families will loosen the purse strings and domestic consumption will rise. Other areas are aimed at boosting employment to compensate for the manufacturing slow down.

Wednesday, December 3, 2008

Henry Paulson in China

Chinese Vice Premier Wang Qishan and the US Treasury Secretary Henry Paulson co-chaired this mornings opening of the 5th Strategic Economic Dialogue in Beijing. morning as special representatives of President Hu Jintao and President George W. Bush.

Initiated by the two presidents in 2006, the twice-yearly SED is the highest-level of dialogue between the two nations. It is rumoured that China is looking for the U.S. to relax some of its restrictions on Chinese investment to enable China to put together some finance investment packages which are really much needed domestically in the USA. Congress has in the past blocked Chinese moves to take substantial holdings in American companies but maybe their mood has changed in the face of the failure of the American finance system.

China announces new finance measures

China has yesterday announced another series of measures to boost its economy..
An injection of 100 billion yuan ($14.6 billion) into three policy banks will free up credit markets.An executive meeting of the State Council, or the Cabinet, presided over by Premier Wen Jiabao, also said steps will be taken to help financial institutions better ward off risks.This is occurring the day before the Chinese meet with Paulson and his delegation to discuss joint measures that can be undertaken. China continues to stimulate the economy and these banking measures will shore up small and medium businesses.

Banks, securities firms and insurers should take coordinated action to play a bigger role in supporting economic growth and contributing to industrial restructuring, it said.
In the face of the global financial crisis,The State Council said it is imperative to implement a "pro-active fiscal policy" and "a moderately easy monetary policy"; and the financial sector should play a bigger role in economic development.

It announced nine measures to stimulate the financial sector.
It urged commercial banks to meet the demand for loans from small and medium-sized enterprises,investors in the countryside and also home and car buyers.Clearly these measures are aimed at boosting the domestic market as well as stimulating infra structure projects.

China to save the U.S.A. and the global economy

George Bush and Chinese President Hu Jintao two years ago launched a twice yearly, Strategic Economic Dialogue. And this week it is on again. The dialogue will be led by US Treasury Secretary Henry Paulson and Chinese Vice Premier Wang Qishan, a key economic policy maker. Emphasis will be on the U.S. economy and its recession and whether China can maintain rapid growth and help keep the global economy afloat. A conversation tonight with a Hong Kong link indicates that tomorrow, or Friday, China will announce a huge injection into the U.S economy which will be approved by Congresss after years of stalling Chinese investment in the U.S.
China has what the U.S. does not ie $$$$$$$$$$$$$$$. And Geo.W. has given Paulson the OK. Usually he has relied on Saudi Arabia...but Prince B. is not at the moment forth China to the rescue.

Tuesday, December 2, 2008

Bargain Buying in Bass Metals

I have posted on Bass Metals before and drew attention to the keen interest the astute Barry Fitzgerald from the Melbourne AGE was taking in its potential. I happen to agree with him...and am amazed to see it selling at a price below its asset backing. Now he is backing up his opinion with another article.(Monday's Age)
He points out that Metals Finance Corp (MFC) has taken over the 19.9% holding previously held by Intec and that Intec has put its idled Hellyer treatment mill up for sale.Now Hellyer's replacement value would be upwards of $100 million but in this market a bargain will be available. ."Should Bass secure the Hellyer mill, it becomes a more interesting base metals play all round." he writes.
Bass is at 0.10 today. So if you buy you are getting $1.50 for your $1...and that is without the upside potential. Bargains to be had. In my non expert opinion ...a buy!

I will listen to the recommendations of my commanders.

Words today of the President elect....I do hope he has checked out the performance of the US commanders in Iraq...and understands that they have had no strategy in place at all.That is why the U.S. is still there.
And the current administration had and has no strategy other than that financed by Prince Bandar.
(Well he did authorise the payment of $US235m in 2004 at the request of Geo Bush for the purchase of 24 Bell helicopters for the Pakistan Army) Another "good decision" by the U.S.
Just ask the people of Mumbai and the families of the Australians killed there.

Donald Rumsfeld in 2006 talking about troop numbers " it is entirely possible there were too many at some point and too few at some point...because no one is perfect" (Bob Woodward "State of Denial" p257)
And that was a statement from the man responsible for the "Commanders in Iraq". Not a clue I hope the President elect is being diplomatic and will act more forcefully when in Office. American Command has failed in Iraq as it has so many times before. The chain of command has been so politicised that the President of the U.S. runs blind.
They told Bush what he wanted to hear...not what was actually happening..Watch out Barack...and Good Luck.