Tag Archives: Asia

Who Has Control of the World Commodity Markets

efThe ability to control monetary policy and interest rates is among the strongest controls over the commodity markets, financial markets, money supply, and currency underpinnings. The control of currency and the Forex markets directly and indirectly influences and alters the world monetary system. There are several large and powerful groups which lie outside this main power base, and they often have the ability to change the outcome for the better!

There are many theories about true world control and the ability for this to exist in a dynamic manner. As money and assets shift over time from the US and Europe to Asia, South America, and the Middle East, one can observe the drive to control for land, technology, patents, money, water, food, language, equity markets, and interest rates. Interest rates are one of the most transparent ways to spot the difference in policies and opinions.

As commodity prices shift and fortunes rise and fall, there is little chance that money alone dominates the world resources. The power bases of each continent is linked to large quantities of different valuable natural resources. As food and water shortages arise, these areas could demand more importance than energy and mining commodities.

Europe currently has a negative LIBOR. Many countries in Europe have 10 year bond rates which are positive, while Japan and Sweden have negative 10 year bond rates. Several countries including Japan, Switzerland and France have negative rates for short terms. Does the annual Forbes 400 hold the secret to international power, in addition to money and equity.

Forbes Magazine creates a list of the most powerful and important politically people in the world. The list often includes Warren Buffet and Bill Gates. Could they substantially impact the commodity markets in collusion with Goldman Sachs or Koch? It is commonly understood that the power behind the world interest, currency, and commodity markets is wide and scattered. Have recent international oil markets and currency swings moved the base of power behind these markets?

There are reportedly 13 families which run the world including:

Astor
Bundy
Collins
DuPont
Freeman
Kennedy
Li (Chinese)
Onassis
Rockefeller
Rothschild
Russell
Van Duyn
The Merovingian (European Royal Families)

Another source indicates that a different thirteen groups rule the world economy including:

Rothschild (Bauer or Bower) – France
Bruce
Cavendish (Kennedy)
De Medici Royal Family of Italy
Hanover
Hapsburg Royal Family of Austria
Krupp
Plantagenet
Rockefeller
Romanov – Royal Family of Russia
Sinclair (St. Clair)
Warburg (del Banco)
Windsor (Saxe-Coburg-Gothe) -Royal Family of England, UK, and Scotland

These lists contain several of the same large families. It is interesting to note that the power and money of Europe are largely hidden, unreported, or disguised in family trusts, land holdings, and corporate shells. The royal family power and money has existed for over a thousand years. The newly emerging power base in China derived from USA and Canadian acquisitions is bold and unseen in an overall value format per country. Changes in foreign asset ownership challenge long-term balance sheets in this world built on foreign trade.

Can the large fortunes or families dictate interest rates, money supply, commodity prices, and Forex currency? Interest rates have been controlled in NYC through the derivatives markets. The silver market was dominated briefly by the Hunt family. The copper market has been tightly traded several times over the last two decades. It seems possible that the transfer of natural resource control and foreign assets to China may create a new tipping point. The demand for natural resources in product creation gives China a large weapon to use against their trading partners.

What happens as China uses their money to purchase assets rather than financial instruments? The power balance shift is clearly ahead and competes with export tariffs to inflict monetary pain on North America. It has long been thought that Asia could shift its investing into assets rather than financial instruments.

Dr. Rebecca Stone has written over 80 book and product reviews, over 300 articles, 160 LinkedIn posts, and three books found on AMAZON. Her publisher is Speedy Reads. She has a three graduate degrees including a MBA in Finance from the University of St.Thomas in Houston, Texas. Her branded journalism news includes Branding America and Trading Jenga.

Dr Rebecca Stone has three published copyrighted books including The New Drone Juggernaut, Horny Goat Weed, the Magic Chinese Herb, Quantum Orthomolecular Medicine, and Quantum Brain Healing. Her fourth book is a children’s book out later this fall named The Undersea Adventure of Aladin and Alibaba. Her publisher is SpeedyReads.

 

The State of Manufacturing Shifts From China to Vietnam

asAsia became a manufacturing leader during the 1960s, when Japan began exporting electronics and other retail merchandise. Twenty years later, South-East Asia became dominated by Japanese-owned manufacturing plants. During those 2 decades South Korea and Taiwan also entered the industry.

In 1990, following China’s entry, 26 1/2 percent of worldwide manufacturing was being done in Asia. Thirteen years later this figure grew to 46 1/2 percent. Today, China outputs approximately 1/2 of all Asian manufacturing.

The Shift from China to Vietnam

News releases in 2010 reported that Vietnam had become the primary supplier of Nike sneakers, accounting for 37 percent of the fabrication while Chinese numbers had dropped to 34 percent. A few years later, in 2013, Vietnam’s share of Nike product manufacturing had grown to account for 42 percent. China dropped even further to 30 percent. Over the intervening five years, news reports featured an increasing number of stories about manufacturing moving from China to Vietnam.

Chinese Wages and Currency Strength

There have been many factors responsible for the increasing attractiveness of Vietnam to provide the assembly labor including increases in the demands of the Chinese workforce and rises in their economic and currency strength.

Beginning with 2001, the hourly wages for low skilled factory labor in China have risen by nearly 12 percent per year. Additionally, their currency, the yuan, reached new all time highs when compared against other trade-weighted currencies.

In response, manufacturers have sought other resources resulting in the growth of Vietnam’s market share in the assembly and fabrication of handbags, apparel, footwear and furniture items.

Further, the HSBC’s purchasing managers index revealed that factory output in China for November of 2014 had reached its lowest level since May of that year, falling to an index figure of 50. For understanding the index, numbers above 50 indicate growth, while those below show retraction.

Affected Products

Recent announcements from major industry leaders reveal that the shift in preference of Vietnam over China for factory production crosses several product lines:

Ambivalences with Southeast Asian Facilities

  • Esperson CEO announced shifting more of their whitefish processing from China to Vietnam.
  • The TAL Group revealed plans to move their garment operations to Southeast Asia from China.
  • Microsoft disclosed changes in its manufacturing strategy, resulting in shifting phone production from China to Vietnam.
  • Samsung announced opening a $2 billion smart phone factory in Vietnam, followed by a later announcement of developing a $3 billion factory there to support their production requirements.
  • Mitsubishi disclosed plans to develop the doors for the Boeing 777 commercial jets in Vietnam

While the general picture painted about Vietnam becoming a manufacturing leader are generally optimistic, there exist a number of issues that cause concerns for overseas firms.

The location of Vietnamese ports are much better situated than their Chinese counterparts. However, the quality of the roads leading to and from them are significantly worse. This is a situation that also affects the industrial locations of Ho Chi Minh and Hanoi to the north, where the appeal of the modern industrial parks is counterbalanced by the unattractiveness of the poor vehicular access.

Travel by train has its own problems in Vietnam. Locomotive access from Hanoi to Ho Chi Minh takes roughly 34 hours. In China getting from Beijing to Urumqi by train takes close to 32 hours, for a distance that is nearly double the Vietnamese locations.

Vietnam also suffers from severe issues related to outdated manufacturing processes. In fact, the state of their manufacturing has been described as “[equivalent to] China 10 years ago.”

Chinese Advantages in Asian Manufacturing

While several factors have driven manufacturing to Vietnam, many analysts believe that China still represents a better option for several reasons that include:

  • Poor Vietnamese infrastructure and heavy governmental bureaucracy representing significant barriers to smaller organizations
  • Fragmentation in the Vietnamese manufacturing industry because of lack of a basic infrastructure
  • Chinese domination of industry perceptions and supply chain channels, e.g., alibaba.com queries reveal that Chinese penetration is 151 times greater than Vietnamese for equivalent products
  • Chinese advantage over Vietnamese for delivering local substitutes for components required for product completion