chinese stimulus on its way

Hey Guys

Remember, mineral prices, especially precious metals like gold, increase from monetary and fiscal stimulus measures.

We have had the European Central Bank, Bank of England and Bank of Japan flood global financial markets with $US1.5Trillion worth of NEW PRINTED money in the last couple of months!

The US Federal Reserve is expected to announce QE3 in the next 2-3 months, which effectively means an additional $US400-600Billion worth of newly printed cash into the global financial system, bringing the total near $US2Trillion.

On top of this, the Chinese economy has "slowed" from 10.9% GDP Growth in Q1 2011 to 8.4% GDP Growth last month.

This article from China Daily clearly shows China is also making serious plans to expand their economy to ensure adequate economic growth for employment growth to remain healthy. The Chinese economy cannot slow below 6.5%, otherwise unemployment begins to rise.

The charts and discussion about the current state of the Chinese economy below, clearly show RRR (Chinese Bank Reserve Requirements) and Interest Rates in China are expected to fall steadily in coming months. Further adding to global M2 money supply in 12 months time.

We are in the early stages of global stimulus packages, mainly monetary, in Western Nations, and monetary and fiscal in emerging markets.

Precious Metals are set for a sustained increase in value as all this cash begins to flow into the global economy. Accelerated returns will be chased by hedge, super, investment houses as economic indicators begin to validate the current upswing in economic growth in the US, and China's economy bouncing up from a very strong slow down of 8.4+%.

We need to remember that when the powerhouse US economy begins to grow at 3-4%, this $14Trillion economy will swallow up significant amounts of minerals in the process, accelerating demand and lifting prices in the medium term, lifting inflation, the ONLY hedge against inflation is GOLD!!!

Let alone China's monster $US6Trillion economy, that grows by 8-9% per year or an additional $480Billion-$540 Billion worth of goods and services EVERY YEAR!!!

The value of the additional goods and services every year in China must be backed up with 1-8% of this value in Gold Bullion. Every financial system requires this. If you look at a post I made last week, comparing the percentage of Western Nations US Germany France etc Central Bank Reserves being held in Gold Bullion 70%+ to China's 1.6%, you can see that if China is to even begin to try catchup to Western Nations Gold Reserve holdings, their demand for gold will be insatiable. Most of their gold reserve is made up of domestic production, but this isnt enough if they are to accelerate their purchases in coming years. They will have to accelerate their Gold Imports! When China moved from satisfying all their iron ore needs domestically to requiring imports from 2005 onwards, we saw the price of iron ore rise from $40/tonne to $200/tonne and now averages $140-150/Tonne. An increase of between 300-450%!

You can easily see why I'm so excited about IndoChine as they move from a Gold Explorer to Developer in the next few weeks, and in 24 months a Gold Miner!

Keep your eyes peeled for announcements from the Chinese Govt and PBOC about expanding their money supply in the next few weeks and months after seeing the economic statistics below. :) The most important stat below is that inflation has fallen below their targeted 4% for the first time in 2 years, giving the PBOC the freedom to accelerate money supply by reducing the RRR and interest rates.

A Great time for IndoCHine mining, as they begin announcing news about the PFS, high grade drilling, basically moving from a Gold Explorer to Gold Developer.....:)

China's CPI growth falls to 3.2% in Feb
Updated: 2012-03-09 09:48

BEIJING - China's consumer price index (CPI), a main gauge of inflation, rose 3.2 percent year on year in February, the lowest growth since June 2010, the National Bureau of Statistics (NBS) said Friday.

The increase eased from a 4.5-percent rise registered in January, when a shopping spree during the traditional Chinese Lunar New Year boosted retail prices.

The country's CPI climbed 3.9 percent in the first two months compared with the previous year. On a monthly basis, CPI dipped 0.1 percent in February, the NBS said. [Full Story]

China PPI stays flat in Feb

BEIJING - China's Producer Price Index (PPI), a main gauge of inflation at the wholesale level, remained unchanged in February from a year earlier, the National Bureau of Statistics (NBS) said Friday.

The zero-growth reading, the lowest since December 2009, further eased from 0.7 percent in January, after hitting a 31-month high of 7.5 percent in July last year, NBS data showed.

On a month-on-month basis, the country's February PPI grew 0.1 percent from January, the NBS said in a statement on its website. [Full Story]

China's industrial value-added output up 11.4%

BEIJING - China's industrial value-added output grew 11.4 percent year on year in the first two months of this year, easing from 12.8 percent in December last year, the National Bureau of Statistics said Friday.

The NBS ascribed the ease in growth to shrinking market demand.

In year-on-year terms, the industrial value-added output of State-owned and state-held companies rose 7.3 percent in the January-February period, while that of collectively-owned and joint-stock enterprises expanded by 9.9 percent and 13.9 percent, respectively. [Full Story]

China's retail sales up 14.7%

BEIJING - China's retail sales rose 14.7 percent year-on-year to 3.37 trillion yuan ($533.8 billion) in the first two months of this year, the National Bureau of Statistics (NBS) said Friday.

After adjusting for inflation, the real growth rate came in at 10.8 percent, the NBS said.

Urban retail sales of consumer goods topped 2.91 trillion yuan in the January-February period, up 14.7 percent year-on-year, while retail sales in rural areas rose 14.6 percent to 454.4 billion yuan from a year earlier, the NBS said. [Full Story]

China's fixed-asset investment up 21.5%

BEIJING - China's urban fixed asset investment climbed 21.5 percent to 2.1189 trillion yuan ($336 billion) in the first two months of 2012 from a year earlier, the National Bureau of Statistics (NBS) said Friday.

The growth rate, down 2.3 percentage points year-on-year, dropped to the lowest level since 17.4 percent in 2002, official data showed.

During the January-February period, investment in the primary industry jumped 43.9 percent year-on-year to reach 30.4 billion yuan. [Full Story]

China issues over 710b yuan in loans

BEIJING -- China's new yuan-denominated loans hit 710.7 billion yuan ($112.81 billion) in February, up 173 billion yuan year-on-year, the central bank said Friday.

By the end of February, the outstanding broad money supply (M2), which covers cash in circulation and all deposits, rose 13 percent year-on-year to 86.72 trillion yuan, the People's Bank of China said in a statement on its website.

M2 growth in February was 0.6 percentage points faster than that at the end of January, according to the statement. [Full Story]

http://www.chinadaily.com.cn/bizchina/2012-03/09/content_14795594.htm