Despite the claims of many in the Australian media, China is slowing, is going to keep slowing, and this will slow us down. Just because they are going in the process of developing and industrialising does not mean there cannot be many year slow downs along the way. Think about the US from 1872-1880, and 1929-1939.
Even if they manage to pull of the perfect switch from an economy dependent on big construction and property investment, to internal consumerism with less savings, this would still drastically reduce demand for iron ore. (guesses on whether our iron ore is used primarily for steel for big construction projects, or for making consumer items?)
However, if, as I feel is likely, ten guys in a room in Beijing aren't capable of making perfect decisions for an economy of over one billion people, this housing slow down could lead to a hard landing. In this case prices for our minerals would decrease significantly.
That billions and billions of dollars always quoted for mining investment in the next 12 months, is a PLANNED number. When mineral prices drop, so does planned investment. It takes very little time to pull the plug on a project at BFS stage etc when the relevant mineral price drops. Remember how fast planned projects were shelved in Oct-Dec 2008?
I am short AUD in order to try and gain from what I see as this highly likely outcome. Only risk there is Bernanke's printing press, but you usually have some warning that is coming.
