Markets Get China Wrong Again!
Posted on Thursday, June 19th, 2008 | In Asia, Current Market News
Contributed by: Larry Edelson (http://blogs.moneyandmarkets.com/blog/real-wealth) -
Oil tumbled this morning after China said they are set to raise gas and diesel prices by 1,000 yuan ($145.39) per tonne tomorrow. Analysts fear that this move will slow demand growth from the world’s second largest oil consumer and drive prices down. But they couldn’t be more wrong!
My opinion: If China cuts subsidies and effectively raises energy prices, that’s NOT going to quell demand. Exactly the opposite. It’s going to increase demand as consumers in China begin to expect rising prices and start buying in anticipation that prices will be even higher down the road! That will increase demand even more.
That’s not to say oil is going to head straight up here. A pullback is overdue.
Last 5 posts by Larry Edelson
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- Cautiously, Steelmakers Raise Prices, Reopen Mills - January 7th, 2009
- Dollar’s fall last week is exactly what I’ve been warning about! - December 15th, 2008
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 About Larry Edelson (http://blogs.moneyandmarkets.com/blog/real-wealth)
With nearly three decades of experience in precious metals and natural resources markets, Larry Edelson has played a pivotal role in training Weiss Research staff and in guiding Weiss Research’s customers to prudent investments in the sector. His Real Wealth Report, Gold Trader Hotline and Energy Options Alert provide a continuing education on natural resource investments, with recommendations aiming for both profit and risk management. His team of technical analysts helps enhance the timing of investment recommendations with the aim of continually improving the performance results for investors. Mr. Edelson is also a regular contributor to the daily e-letter, Money and Markets. Recognized as an expert in precious metals and natural resources, he is often called upon by the media for his investing views. Mr. Edelson has been featured on Bloomberg, Reuters, and CNBC as well as The New York Times, New York Sun, and Marketwatch.com Mr. Edelson holds a B.A. degree from Columbia University. |
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