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Publish Date : 2/15/2007 8:26:00 PM Source : Investments and Finance News Onlypunjab.com
In the latest issue of Money and Markets, Dr. Weiss outlines the three non-economic factors that have caught economists by surprise. "The trade boom between China and Brazil is still in its infancy. But already, the volume is so large -- and a massive bottleneck at the Panama Canal so likely -- China is now considering the construction of a second Inter-Oceanic canal in Nicaragua," says Martin Weiss, Ph.D.
Overall, Latin America's exports to Asia have surged to $47.5 billion, growing by 20% per year since 2000. Brazil's trade with China, which was under $20 million in the mid-1970s, has now grown by over one thousand times, to nearly $20 billion. The value of Brazil's iron ore exports have tripled just in the last six years -- from $2.9 billion in 2001 to at least $10 billion this year. And most of that new growth is driven by China.
First, China is operating virtually unchallenged by competing powers. After the Cold War, China has had space to itself, forging new friendships in in Southeast Asia where it was formerly feared and making major inroads into Latin America and Africa, where it was formerly ignored.
Second, unlike other world powers, China is strictly business. China uncouples commercial goals from military support and rarely attaches conditions to loans. With few exceptions, all that China does is offer money, cut deals, and buy assets -- to build infra-structure, extract resources, and get them shipped to China.
Third, unlike Japan, China is not tip-toeing around the United States. China's Hu Jintao signed 16 agreements with the Cuban government, including a 10-year extension to pay back Cold War era loans. He cut major deals with Peru, Venezuela and Argentina. He looked to Uruguay as a potential hub to penetrate Mercosur, South America's common market, helping to launch new joint ventures with Chinese auto manufacturers. And most important, he locked in massive trade and joint venture deals with Brazil, China's largest trading partner in Latin America.
Dr. Weiss warns, "Some Brazilian companies are being hurt by Brazil's trade boom with China. They can't compete with cheap Chinese imports flooding into their economy. But the trade is continuing to accelerate, and the Brazilian companies that feed it, such as Companhia Vale do Rio Doce, are making out like bandits."
For more information and to read the full article, visit this link: http://www.moneyandmarkets.com/press.asp?rls_id=641&cat_id=6&
About DR. MARTIN WEISS & MONEY AND MARKETS Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.
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