Chinese New Year was on Monday and the Year of the Dragon has commenced. How do I know this? My 4 year old daughter came home from pre-k with a dragon mask that she made in school and told me. That and her education of Ni Hao Kai-lan eclipses my knowledge base for the week.
So now that the New Year is upon us how will this impact us Westerners on the other side of the pond….here are my thoughts….
1. As mentioned in an earlier article that typically the economy has to be good for the President of the USA to be re-elected. The economy isn’t good. So, the President will try to make the economy good. If they pump a lot of money into it more jobs will be created, less unemployment, more money created, etc. The economy will be good and the stock market will do well. OK, I dummied up the English in this paragraph but it’s to make a point that the White House will do everything in it’s power to boost the economy in a positive light.
2. If the economy is going well then industry will buy more materials. If memory serves me correctly the shelves are bare but companies have a lot of money. If the above holds true manufacturing will start to build up and inventory levels will also build…good stuff for everyone down the line. Prices should stabilize and hopefully everyone prospers.
3. That means that in the true market economy that stabilization should take effect unless there are acute shortages. So I look for stabilization of the rare earth materials and elements until supply reaches demand which could take a year or longer. This also will impact solar cells and polysilicon in a positive light. That industry has been in a death spiral for the last 6 months.
We’ve been in a recession/depression for quite some time. Unemployment has been high, homes have been foreclosed and the general “friendly” business atmosphere has been uterly despicable. Perhaps the Year of the Dragon will be the difference that everyone has been looking for…only time will tell.
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