dj,
you are correct in one sense, ie if china builds exports to sell to the US from our raw materials, but quite seperate, is china buying our iron ore and copper etc, and nicol, so every chinese villager whose been washing his dishes in a clay sink for last 1000 years can finally have a stainless steel sink.
My point is, the demand from the emerging industrial nations, is in part for their own development. Every new building requires KM of copper wiring etc, and these buildings dont get exported to the USA.
The amount of raw materials consumed in the modernisation, industrialisation is staggering.
If the US was in recession, and the DOW in a downtrend drift, do you really think that CHINA is going to say to our Iron, copper, and Nicol mines i AUS, "sorry, we've decided to postpone our development, and we're going to just leave things as they are, perhaps even see if we can get the old horse and carriages dusted off?"
I don't think there will be a total divorse from the USA, but our mining sector will maintain fundementals,ie, earnings will remain largely intact. As to how the lemings rationalise the DOW, one day sanity may prevail, but perhaps thats a tad optimistic.
Have you had a look at the DOW, DAX, FTSE, ASX over the last year, bloomberg.com., our overall trend is postive in comparison to the DOW.
So, there is evidence of a divorse occuring.
Having said that, lemings will panic, and August mania can occur, but also the September Rally is very quick to respond.
Cheers
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