As Iraq war comes to an end, China raises rates to control inflation, industrial metals and stocks will collapse – the end game has started, copper leads the way
Alan Hershey
May 11, 2007

The Iraq war is coming to an end. Coalition forces most likely will withdraw from Iraq by September. The 2008 Presidential election will be debated over the economy and the future and not Iraq. The Republicans are clear about that. That is a solid damper on the military spending that helps economy grow. In the mean time, China has decided to raise the rates as stock market in China decided to defy warning from Chinese Central Banks. China will raise rates sharply in the next twenty-four months and squeeze liquidity from its Foreign Direct Investment centered economic sectors. This can cause the Asian economies to collapse. China and India have other structural problems. That will manifest themselves in the next twenty years through the Great Depression of Asia.

The net effect on the economy is severe. Industrial metals and stocks will lead the downside in economy and the stock market. The copper, steel, nickel, and aluminum will be the worst hit. The oil, gold, and the stock market will fall together. The Aussie dollar will fall. The Canadian will come out as the total winner in spite of severe drop in energy prices because of Canada’s trade and budget surplus situations. Financially Canada is the strongest nation in the world.

The end game has started last year. The metals topped way before the stock market and the economy. Mostly it happens that way. For the next thirty years, it will be a slow but steady decay. You will never feel that things are going down. It’s like the Titanic sinking at a very early stage.

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