Board-Ansicht
Mix-Ansicht- Man nehme: Etwas China und nicht zuviel USA..................... - Emerald, 28.07.2005, 22:39
Man nehme: Etwas China und nicht zuviel USA.....................
-->Economy
For: Thursday, July 28, 2005
(800) 219-1333. VetHotline@aol.com. VanEckTillman.com.
They are laughing at us in Beijing today. I can just picture the communist party bosses clinking glasses as they celebrate having made fools of the U.S. with an adjustment in its money (the yuan) so tiny as to be insignificant. Yet this took all the wind out of the sails of those in Congress who were ready slap a 27.5% tax on imports from China, to partially level the playing field.
The 2%-plus rise in the yuan - a pittance compared to the 33% cut China engineered on New Year's Day 1995, leading to a general collapse of rival Asian economies a couple of years later - caused many observers (not me) to predict this 2%-plus move would be just the first of a number of adjustments, with a total change of 10% due within a year - and then China would completely throw their money onto the free market. That was a fantasy if I ever heard one.
And now the head of the central bank of China has squashed all their wishful thinking by announcing that 2.1% is the whole total adjustment and there will be no more. If China's happy celebration is open to a few selected invited foreigners, I could easily image a handful of their valuable allies from the ranks of American big business laughing as they joined the raising of glasses. In fact, if the CEOs did not make it to Beijing I have no trouble at all closing my eyes and seeing them all together in New York, celebrating their victory over American voters. WELL I HAVE NEWS FOR THEM - THE LAST LAUGH IS THE ONE THAT COUNTS. AND AMERICANS ARE GOING TO HAVE THAT LAST LAUGH.
There has been a lot of talk on Wall Street about China buying American Treasury bills with their surplus funds. The truth is that China has been attracting scads of speculative money from all over the world from hedge funds and others, all hoping to make a killing when China devalued its yuan. Now that China says there will be no more adjustments, that hot money will begin to flow out of China, first in a trickle then in a flood. Speculators may decide they have a better chance at profits in the U.S. stock market. The communists in Beijing - whose economy has already been slowing - will find out what American Savings & Loans discovered years ago, when hot speculative money fled and caused many to collapse. Then you will see an interesting spectacle. All the giant American firms that have been and are now building factories in China are going to learn soon enough that they have made a gigantic blunder. They bet on a falling star. And they have burned bridges to an America that is about to rise higher
than it ever has before.
All the evidence I see now points to the simple fact that the U.S. super boom I have been predicting has already broken out of its base and is climbing in a strong, decisive pattern upward. This thought does not square with the predictions of just about everyone but me in the world of economic forecasting. I wish that were not so, but to be honest I am accustomed to it. Anyone who has been with me for the past 30 years knows that I am cursed with being able to see over the next hill and even around the next corner. Much if not most of the time I am out-of-synch with just about everyone, and yet nearly every time I have written on the future it has come to pass exactly as I said it would, in its own good time. It is fate.
I realize from reading every account I can find of the Fed's new beige book report that the skeptics and cynics have chosen to take from it only the few moderate or even negative items. I want you to see the part they are neglecting - the optimistic, bullish and positive parts. So I have excerpted them and I will now share them with you at the end of this Hotline. I suggest you read them carefully... even if that means putting this Hotline aside for a day or so until you can invest the time. And then I urge you to share this news with anyone you know - friends, relatives, associates at work - whom you think can benefit from them. You have my personal permission to forward this Hotline and its supplement below by e-mail or fax to any and all you choose. More next week. Adrian Van Eck.
Reports from all twelve Federal Reserve Regional District Banks indicate that economic activity continued to expand in June and early July. (Adrian Note: when you see a city mentioned this refers to one of the regional Fed districts, which can include several states). Richmond and Dallas reported that the rate of economic growth increased, and Cleveland said economic growth was stronger and more balanced than in the spring. Atlanta, Minneapolis, Kansas City, and San Francisco characterized the pace of expansion as solid.
Most Districts reported increases in retail sales, and vehicle sales in nearly all Districts were boosted by a new round of price discounting. Demand for most services, including tourism, continued to increase across the country, and most Districts noted moderate to solid expansions in manufacturing activity. Commercial real estate activity improved in most Districts. Residential real estate activity remained strong overall. Labor markets generally continued to improve. Skilled worker shortages were reported in several Districts.
Consumer Spending. - Most Districts reported increases in retail sales, and reports on retailers' expectations were generally positive. Dallas said sales growth had been stronger than expected given high gasoline prices, and Atlanta noted that higher gasoline prices did not appear to have cut into spending on other items; Cleveland and Chicago said warmer weather may have boosted sales in their Districts. Minneapolis and Kansas City reported solid year-over-year retail sales gains, and sales also increased in the Philadelphia, Richmond, and San Francisco Districts. Nearly all Districts that reported on vehicle sales noted improvements, which were generally attributed to a new round of price discounting by some automakers. Cleveland reported dramatic gains, saying all types of dealerships benefited from increased buyer traffic. San Francisco also said vehicle sales rose substantially in response to the price cuts. Sales of most types of vehicles were characterized as strong.
Services and Tourism. - Demand for services continued to increase in June and early July. Boston reported healthy growth in demand for advertising and management consulting, and Philadelphia contacts noted increased activity in information services and business support services. Richmond also reported increased demand for business-to-business services. Tourism continued to show strength throughout much of the country. New York reported that hotel occupancy rates in Manhattan were near record levels and that room rates were up substantially from a year earlier. In addition, Atlanta said hotel occupancy rates in the Miami area were at record levels, and theme park attendance was ahead of last year's pace. Chicago and Kansas City also noted an increase in demand for hotel rooms since the previous survey. Tourism activity over the Fourth of July was characterized as being particularly strong in parts of the Richmond and Minneapolis Districts. San Francisco reported continued strong growth in visits to key
tourist destination states.
Manufacturing. - Many Districts reported solid expansions in manufacturing activity, and expectations for future factory activity were generally upbeat. New York saw a rebound in manufacturing production in July, adding that manufacturers' expectations had also risen. Chicago reported continued solid growth, and Atlanta said that reports from District manufacturers were positive. Boston said sales and orders remain on an upward trend. Philadelphia, Minneapolis, and Dallas noted increases in activity as well. San Francisco said demand for manufactured goods rose slightly after slowing in the previous survey period. Activity in a wide variety of manufacturing industries was characterized as strong. Boston and San Francisco reported strength in aircraft and high-tech manufacturing, and Atlanta and Dallas said refineries were doing quite well. Several Districts noted strong activity for producers of construction materials --especially cement --as well as for producers of industrial equipment and materials.
Construction and Real Estate. - Residential real estate activity remained robust overall. Boston reported that residential real estate markets were still strong. Housing activity was described as robust in the New York District. In the Richmond, Atlanta, and San Francisco Districts, housing activity remained strong. Dallas also described housing demand as strong but noted that the supply of new homes was sufficient to keep housing inflation from exceeding overall inflation. Housing activity was brisk in the Chicago District and solid in the Kansas City and Minneapolis Districts. Commercial real estate activity improved in most Districts. Cleveland said commercial builders were experiencing steady improvement and higher backlogs of orders. In the Atlanta District, new construction projects moved forward, and office vacancy rates trended downward.. Contacts in the Chicago District described commercial activity as busier than normal. Commercial real estate activity was described as strong in the Richmond
District and as improving in the Minneapolis, Kansas City, and San Francisco Districts. Dallas reported that speculative office construction increased, apartment construction remained high, and hotel markets were hot.
Banking and Finance. - In Districts reporting on banking, loan demand increased or remained solid. Lending increased in most Districts, with growth ranging from slight in the Cleveland and Kansas City Districts to solid in the Dallas District. Atlanta and San Francisco both characterized loan demand as strong. In most Districts, loan growth was attributed to increases in home mortgages, home equity loans, or business loans. Credit quality was generally strong.
Agriculture and Natural Resources. - Although conditions remained favorable in most agricultural Districts, dry weather was a problem in some areas. Richmond reported that substantial rainfall brought on by two tropical storms generally improved soil conditions in the District. Activity in the energy industry remained strong. Oil and gas activity increased in the Dallas and San Francisco Districts and remained steady in the Minneapolis and Kansas City Districts. Kansas City reported that drilling was constrained due to a shortage of available rigs and regulatory factors, and some oil service firms in the Dallas District were turning down available work due to limited capacity. Dallas contacts also noted difficulty finding qualified engineers and training crews.
Labor Markets, Wages, and Prices. - The demand for labor continued to increase in most Districts. Skilled workers were said to be in shorter supply in several Districts. Despite generally tighter labor markets, nearly all Districts said overall wage pressures remained moderate. Overall price pressures either eased slightly or remained unchanged in most Districts, despite substantial increases in the costs of energy and some building materials. (End quotes and end Hotline.)
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