China’s $585 billion spending package is equivalent to the U.S. spending nearly $3 trillion in fiscal stimulus. Massive? You bet it is! Inflationary? Absolutely! A boost to the entire global economy? YES! — Larry
China unveils stimulus package as growth slows
Program will spend more than $585 billion to jump-start economy
November 10, 2008 (MarketWatch) — China unveiled on Sunday what it described as a “massive” economic stimulus package in an effort to reverse slowing economic growth in the world’s most populous country.
China’s state-run news agency, Xinhua, said that the program will “will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand.”
The package is valued at about 4 trillion yuan ($586 billion), to be spent over the next two years.
Resource stocks on fire as China unveils stimulus
November 10, 2008, Hong Kong (MarketWatch) — China’s $586 billion economic stimulus package sparked a rally in Asian markets Monday, raising hopes that Beijing’s efforts to boost a slowing domestic economy will support commodity prices amid fears of a prolonged recession in the developed world.
Chinese stocks in Shanghai and Hong Kong posted across-the-board gains, while miners, steelmakers and energy shares fronted the surge in Tokyo, Sydney, Seoul and Mumbai.
Sylvain Brunet, an analyst at Exane BNP Paribas, wrote in a report that the stimulus package is good news for all mining and steel stocks, as China’s “disproportionate weight in metals consumption” has a significant impact on the supply-demand equations of several metals.
China accounts for 55% of iron ore seaborne consumption, 40% of coking coal, 38% of carbon steel and 35% of aluminum, Brunet noted.
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Larry, you and Irv seem to be going in opposite directions - help me out - you have now pegged a new target for the dow @ 12000, and think the G-20 will remonitize the currency markets, while Irv is saying stick to inverse ETF’s.
Under Irv’s scenario, if dow rises as you suggest (related to G-20 fix), won’t you get crushed in inverse ETF’s?
Absolutely!