Friday, March 11, 2011

China posts 7.3 Billion deficit

China posts its largest trade deficit in seven years and the first monthly deficit since march last year.The trade deficit was around 7.3 billion dollars. The main reason given for the deficit are increases in iron ore prices and the price in oil with a significant decrease in exports.

There is some discussion in validity of the figures from China to show the affect of un-pegging of the Huan. But for me its seems accurate, as if you go on the assumption that USA is world currencies are trying to debase their currencies. If that premise is true and I had the most to lose in terms of having a large amount of dollars that are being significantly devalued, I would start buying as much commodities as I could as a real hedge.

There are also the issue of  China going in a big way in terms of buying Gold, Silver and other commodities. There is also a real issue in China in which the purchase of food is taking up more of the income of working families and would be interested in how much the food is being imported


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