China’s stimulus talk and buying silver on the copper dip

All eyes are now on China as a source for consumer strength in the developed world. Customs data released on December 10 tells a concerning story - China’s overseas shipments are growing, but at their slowest pace since 2009.

In November, China recorded 13.8% growth in overseas shipments from the year-ago period. However, Chinese trade balances are beginning to turn decidedly toward an imbalance. The balance numbers recorded a 35% plunge in China’s trade surplus, enough to worry investors that European consumption is dropping dramatically in light of a debt crisis.

Stimulus

Analysts expect the Chinese central bank to loosen reserve ratios and allow easier lending standards to come back into place in the property market. Alongside monetary stimulus, some expect a massive stimulus project aimed at developing domestic sources of demand. For much of the last decade, China’s economic growth was fueled externally by international buyers. As the populace ages and becomes wealthier, China’s consumer class will have to give it the strength necessary to wade through slowdowns in the general global economy.

There is little debate about whether or not a slowdown will occur, but rather when the slowdown will occur. The least confident estimates point toward a Chinese trade deficit occurring by the first quarter of 2012 – which is just months away.

1 2

Tags: price of silver, Silver, silver analysis, silver futures, silver futures prices, silver news, silver price, silver prices, silver spot, spot silver

Posted by Silver Guru on Dec 21 2011. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry