July 2011

China...Food, Water & Wine

Some 400 million Chinese have been lifted out of poverty and have joined the “Middle Class”. Few in China use the term middle class. Everybody, talks about it, but they use different words such as white-collar, entrepreneurs, businessmen or middle income.

How do you define the “Middle Class” in China? The definition varies greatly in terms of income. You could be considered part of the middle class if you make between $1000 to $10,000 per year. In rural areas the average income is only about $300 per year.

The Chinese middle class is eating more meat, which requires more grain to feed animals. China buys more than half the world’s soybean exports and is the world’s biggest wheat importer, and the world’s second biggest corn importer. Most corn in China isn’t consumed by humans at all—75 percent of its corn consumption is used for animal feed. China will overtake the U.S. to become the world’s largest consumer of wine by 2015, says Euromonitor.

What is a growing concern in China? Water. In China 90% of the water is polluted. After almost 30 years of double-digit economic growth and the migration of millions to the cities, China has been barely able to meet the surge in demand for water.

Steven LeBlanc

Shocking Marriage Statistics

The Latest Census Bureau reports that less than half of Americans now live in a married-coupled household. This is a truly shocking statistic—never before in America’s history have we seen such a decline in marriage. In the 1950’s 78 percent of all households consisted of married couples, today only 48 percent of households consist of married couples.

Who is hurt the most by this change in culture? Children suffer terribly in an anti-marriage culture. Poverty is much greater for children living with a divorce, single or living together parent. The poverty rate is 37% for single parents with children, but only 6 % for married couples with children.

The marriage attacks began in the 1960’s and picked up steam in the 70’s. The anti-marriage rush started with states embracing no-fault divorce (government in essence supporting easy divorce). Then came the Supreme Court legalizing abortion (men dodging responsibility for pregnancy). And then Hollywood began exalting the living together, sex outside of marriage lifestyle.

Steven LeBlanc

Rumors of a September Strike Against Iran

Former CIA official Robert Baer believes a possible Israeli attack against Iran could happen in September. Baer who served over 20 years in the Middle East stated that a strike against Natanz and other nuclear facilities is once again being seriously considered.

Sources were not named in the Radio interview that took place on a Los Angeles Radio station. However, Baer has contacts within the Israeli security world who believe Prime Minister Benjamin Netanyahu is determined to attack Iran in hopes of impairing Iran’s nuclear threat.

Baer said that “There is almost near certainty that Netanyahu is planning an attack (on Iran)… and it will probably be in September before the vote on a Palestinian state. And he’s also hoping to draw the United States into the conflict,” he stated.

No doubt a strike is being planned by Israel, but when it will take place is unknown. The Prime Minister’s office has not commented on the story. We continue to watch this story closely.

Steven LeBlanc

China's Massive Commodities Appetite

China has passed the U.S. to become the world’s biggest energy consumer.  This is no trite statistic.  China is the world’s top consumer of energy, metals and grains.

China’s appetite has been fueled not by consumer demand, as seen in America, but from energy-intense heavy industry and infrastructure building.  There seems to be no slowing down in the building sector for the foreseeable future.

China’s share of total world copper consumption has risen dramatically as well, reaching 40 percent, from about 22 percent in 2005, making China the world’s largest copper-consuming country.

Copper is not the only commodity where China is now the dominant consumer. Chinese consumption of aluminum has now outpaced the United States.  And… China now accounts for 60 percent of global iron ore consumption and 52 percent of coking coal demand.  As for oil, China is the world’s second-largest oil consumer, America being number one in that category.

Saudi Arabia, the world’s second biggest crude exporter, now ships more crude oil to China than to the United States.

If China should suddenly stumble economically…the world economy will falter creating panic in the world’s financial markets.   If China’s economy should overheat… commodity prices will move even higher and that means higher gas prices and higher consumer costs across the board, stalling an already anemic U.S. recovery.

China is a clear and present danger that threatens America’s economic supremacy.  Another sign that America is truly a “sunset” power.

Steven LeBlanc

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