Get thee to Latveria, fool!
Posted on 09/25/2005 7:13:24 AM PDT by billorites
Johannesburg - Hong Kong-based analyst Dr Marc Faber - better known as "Dr Doom" - says a tug of war over oil resources between the US and China could spark World War III.
He believes World War III would erupt over conflict between the US and China over the US denial of oil resources to China.
Based on historic price performance, the international price of oil could remain in an upward trend for the next 20 years "easily", he said.
"At some point, rising commodity prices, especially oil, will eventually lead to World War III because the US has the oil China needs, but doesn't want to give it to them."
But Dr Doom is not all about gloom. In his latest, well-known "Gloom, Boom & Doom Report", he says the economic rise of China will be beneficial to Asia and resource-rich emerging economies like those in Africa.
Speaking at the Investing Abroad Summit in Cape Town on Thursday, Faber said that, although the rapid growth of China would continue to undermine the manufacturing sectors of other Asian countries, as well as those around the world, on balance Chinese growth would be beneficial for Asia (in terms of importing large quantities of Asian goods), as well as resource-rich emerging economies such as those in Africa, including South Africa.
Promising sectors
Corporations, financial institutions and individuals should therefore overweight their investments in Asia and in natural resources for the long-term, he believed.
It would be important to invest in countries and sectors of the economy that enjoyed comparative advantages, either in competing with China, or in sectors that would benefit from Chinese growth.
The most promising sectors, he believed were in housing, tourism, commodities, and consumer-related goods and services such as financial services, advertising, distribution, health and personal care products, entertainment and media.
"It is a no-brainer to invest in property," he told conference participants.
"This is one sector where there is no competition from China, except in Hong Kong."
Tourism was Asia's most promising growth industry, he believed, given the anticipated boom of visitors from China to the region and all over the world.
High returns
According to Faber, China's outbound traffic was growing at 25% per year, reaching 24 million in 2004. This represented less than 2% of the Chinese population, and was likely to reach more normal levels of between 5% and 10% in due course.
Commodities would also be a good long-term investment thanks to ongoing strong Chinese demand over the medium- to longer-term, although prices would fluctuate with this demand.
Farm commodities, in particular, would likely be an area to experience high returns (perhaps via investment in the futures market) given their current very low prices.
Meanwhile, he noted, Chinese demand for higher quality foods would also help drive food prices higher as incomes rose and they began to consume larger quantities of meat, fruit, vegetables, alcohol, and other products.
Currently, for example, Hong Kong Chinese consumed eight times more wine per capita than mainland Chinese, but this would change over time.
The African and Chinese economies could benefit from each other substantially, as well, he felt, as Africa had the natural resources China required, but little manufacturing capacity (excluding South Africa), while China had the manufacturing expertise to come in and develop the African continent.
Chinese coal (wild)fires produce more CO2 per yeaar than all of the US light duty trucks and cars combined.
Get thee to Latveria, fool!
Reminds me for all the world of what my parents used to talk about when they saw Japan in its massive naval buildup prior to World War II.
Its my understaning Reed Richards and the rest of the Fantastic Four won't allow this to happen.
Actually the Arabs have the oil China needs.
Most of the world's crude reserves are in the region extending from Arabia to Central Asia.
Thus, to deny China, the US would have to keep them and their allies from dominating Eurasia.
This is an unlikely proposition, given that China and Russia are now in rapprochement, and that the United States is widely hated in the Muslim world stretching from Morrocco to Indonesia.
1. there's great undiscovered/untapped resources in Siberia & various sea beds.
2. U.S. has enough oil but, since '72, has chosen to leave it in the ground & exhaust other's supply
3. This whole "China peril" scare is B.S. - they're just looking out for their own people & future interests (a war/conflict w/ U.S. would benefit neither side)
Yes, and as I recall them saying, it was done with our scrap metal...
2. U.S. has enough oil but, since '72, has chosen to leave it in the ground & exhaust other's supply"
This is interesting, Oracle. I'd be interested in a source if you can dig it up.
Thanks. Doxteve
Now its being done with our dollars.
World War III (the "Cold War" between the U.S. and the U.S.S.R.) ended a decade ago.
We are now in World War IV.
3/4 of the world is covered in water. Sea water could be desalinated easily to meet those needs. Besides, the technology has improved where the water used in extracting this heavy oil is recycled to a large extent. Alberta's oil sands are testament to that. They produce over 880,000 barrels a day and are barely touching 1% of the recoverable oil sands.
So tell me, why would anyone listen to Dr. Doom about anything?
There are alot of known oil deposits along the eastern shores that aren't being developed because of enviromental laws/ restrictions in some states, as well as Alaska.
Basically, prior to energy crisis I, we were importing 20% of our oil.
Energy crisis I taught the oil Co.s that demand was somewhat inelastic (as it is now).
That's when our oil Co.s decided to exhaust other's supply & leave theirs "for a rainy day".
If increased consumption since '72 is not factored - we've roughly gone from 80/20 to 20/80.
The reasons & factors are a lot more complicated - I'm trying to simplify.
AMERICA TO MIDDLE EAST-"KEEP YOUR OIL"
Yes, and there will come a point where the Chinese decide that it will be cheaper to seize it rather than continue to pay for it. The US will not allow this. I think this is what Dr Doom was alluding to.
Personally, I think there are deep connections between China and al Queda, where al Queda has been given a two-part job:
Not just our dollars, our technology (sold or stolen), and our best educational institutions are teaching the cream of their crop math, engineering, etc.
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