Commodities rally: China makes the world go ’round
Today's Financial News - Posted September 17, 2009
The commodities market is soaring, leading us to another round of double- and triple-digit gains. Thanks to China’s recent moves, the gains will continue to grow.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): This is a critical period for America’s chief export, its burgeoning national debt. As the Obama administration works to spend the country into a sustained economic recovery, our national debt is about to smack into its Congressionally mandated debt ceiling once again.
Unless the $12.1 trillion “credit limit” is raised, the U.S. has just $349 billion to spend until we are officially in default mode, with debt coming due and no way to pay for it.
If we don’t fix the situation, financial calamity will certainly ensue.
Of course, Congress will eventually make the politically sensitive move to raise the limit as it has some 90 times in the past seven decades (the House already voted for a $13.029 debt ceiling), but it won’t happen before plenty of political bickering and maneuvering.
It’s your fault, not mine
You can bet your bottom dollar China is watching the situation closely. As the largest holder of Uncle Sam’s obligations, Beijing’s economic future is tied to our ability to repay our burgeoning debt… with money that is actually worth something.
So far this week, the value of the greenback has weakened intensely. As I write, it takes $1.47 to get just one euro, a figure just shy of yearly lows.
Of course, with a weakening dollar, gold bugs are getting anxious. Their precious metal has surged in value, all the way to $1,023 per ounce, just ten bucks shy of all-time highs.
The action has had all sorts of beneficial ramifications for savvy traders. Over at TFN Strategic Trader one of my more-touted options trades was worth triple-digit gains yesterday.
As the situation grows over the next month, the plays value will undoubtedly increase.
By the way, we locked in gains of 80%, 40%, 18% and a whopping 185% over the past week. How’s that for the power of leverage?
Looking forward, it is all about China and the commodities markets. The news from Venezuela this morning proves it.
While Hugo Chavez may not be a political favorite in Washington, the rest of the world has no problem dealing with the man and his country.
Buy, Buy, Buy
China proved it by inking a $16 billion oil deal. Add this latest sale to last week’s $20 billion agreement between Venezuela and Russia and suddenly our South American antagonist is producing an extra 900,000 barrels of oil each day, making it an even larger player in the world’s oil market.
There are two reasons this news is significant. First it shows China is not afraid to deal with American enemies. And most importantly, it shows the communist country’s dire need to exchange its greenbacks for something tangible – oil or any other dollar-denominated commodity.
This is going to be a very common theme over the next 24 months as the dollar weakens and interest rates rise. The more Washington debates the national debt and the increasing levels of spending, the more pressure China will feel to diversify its holdings.
The commodities market will feel the brunt of the pressure. We are already gaining from the recent bullishness. Fortunately there is much more to come.
Conditions are absolutely perfect for a massive commodities-market rally. If you are not in a position to take advantage of the action, make your move now.
To learn the best way to get the job done, read this report. If you would have read it two weeks ago, you could have already doubled your money.
Next Article: Three big winners for a slow day
One Response to “Commodities rally: China makes the world go ’round”
Your comments are welcome
Follow TFN via RSS or Twitter |
 |
 |
 |
Advertisement
Latest Headlines
- The Big Picture for Sinobiopharma, Inc. (SNBP)
- Beazer Homes USA, Inc. (BZH) and Hovnanian Enterprises, Inc. (HOV) up despite horrid housing news
- The FDA catalyst: 2010 moves in MannKind (MNKD), Roche Holding (RHHBY), Acorda Therapeutics (ACOR) show it still works!
- Steepest drop since Feb. 2009: Here we go again!
- Is the silver run over? Coeur d’Alene Mines (CDE), Silver Wheaton (SLW), Alto Group (ALTO), Hecla Mining (HL), Endeavour Silver (EXK) close down
September 17th, 2009 at 8:38 am
Funny how any country that doesn’t bow to the criminal activities of the usa is labelled the “enemy”, for decades and before Chavez Venezuela was considered an allied, a model democracy in South America, this meant a few families stealing our natural resources and giving it to the transnationals while 80% of the country went to hell.
Today we have a man in control of what is ours and that makes us the enemy. We are not the enemy of the USA, it is the USA that is the enemy of the world.!