The great, 2008 recovery powering force, was meant to be that of China.
Turning its Rural Community into, urbanised economically active dwellers 500 million at a time.
Even if this was possible, it would be a bumpy transition, with many an overshoot, and Mal-Investment.
So when did China truly start slowing?
A large part of the China ‘miracle’ would be the insatiable appetite for commodities especially for building, homes, commercial office & infrastructure.
Part 1 – Copper bottom.
One of the most critical construction industrial metals is Copper.
DEFINITION of ‘Doctor Copper’
Market lingo for the base metal that is reputed to have a Ph.D. in economics because of its ability to predict turning points in the global economy. Because of copper’s widespread applications in most sectors of the economy – from homes and factories, to electronics and power generation and transmission – demand for copper is often viewed as a reliable leading indicator of economic health. This demand is reflected in the market price of copper. Generally, rising copper prices suggest strong copper demand and hence a growing global economy, while declining copper prices may indicate sluggish demand and an imminent economic slowdown.
So on this chart, Post 2008 new Copper Highs when did we tip?
Ans: 2011 [2nd Red shaded area, after 2nd Yellow warning area]
Since Subprime the chart looked like this…
The Copper tip.. an exhaustive high just through the Key Level of Significance [KLoS] of 450
Interestingly apart from High Grade Copper, Our:
- Oil south break call at $103,
- and the FX pair AUD/NZD,
All also turned south in 2011 … In short 2011 was our silent unknown 2007…
Did you know that?
Have a peek here
AUD/NZD Weekly Chart.
When did the reliant on mined commodity Currency start turning?
Answer: The Key Reversal period was 2011, from March, with AUD spilling early 2012 [across other FX pairs too]
From these charts we appear to be since in an engineered attempt at a softer landing version of 2008, much like Copper.
In Short China & The Commodity market have been in an extended deflation bleed south, that risks now going into a ‘Dis-orderly’ descent.
A Supply Glut, a Glut Everywhere a Glut but nothing wrong with demand and not a depression you hear !?